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entitled 'Federal Emergency Management Agency: Opportunities Exist to 
Strengthen Oversight of Administrative Costs for Major Disasters' 
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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

December 2014: 

Federal Emergency Management Agency: 

Opportunities Exist to Strengthen Oversight of Administrative Costs 
for Major Disasters: 

GAO-15-65: 

GAO Highlights: 

Highlights of GAO-15-65, a report to congressional requesters. 

Why GAO Did This Study: 

FEMA leads federal efforts to respond to and recover from disasters, 
and provides grants to states and localities through the DRF. 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 was asked to review these administrative 
costs along with FEMA policy changes. 

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 analyzed FEMA's 
administrative costs data and policies and PA guidance for 
administrative cost reimbursements; and interviewed FEMA, state, and 
local officials. 

What GAO Found: 

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. This $12.7 billion represents 13 percent 
of the $95.2 billion obligated from the DRF for the 650 major 
disasters declared during this time frame. 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. 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. 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. 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. Such a plan could help FEMA to better 
oversee and control these costs. 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. Doing so could provide FEMA 
with better information to manage these costs. 

Figure: Total Disaster Relief Fund (DRF) Obligations for 650 Major 
Disasters Declared during Fiscal Years 2004-2013 by Federal Emergency 
Management Agency (FEMA) Cost Category: 

[Refer to PDF for image: pie-chart] 

Public assistance: $45.3 billion; 48%: 
* Grantee and subgrantee administrative costs: $1.7 billion; (2% of 
total DRF obligations and 4% of public assistance obligations); 
Individual assistance: $25.9 billion, 27%; 
FEMA administrative costs: $12.7 billion; 13%; 
Mission assignment: $6.1 billion; 6%; 
Hazard mitigation: $5.2 billion; 5%. 

Source: GAO analysis of FEMA data. GAO-15-65. 

Note: Percentages in the figure do not total 100 percent due to 
rounding. 

[End of figure] 

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'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. However, according 
to FEMA, the 2007 rule led to an unexpectedly high rate of claims for 
direct administrative costs. 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. Clarifying the agency's guidance and minimum 
documentation requirements would help grantees and subgrantees submit, 
and FEMA review requests for administrative costs reimbursement. 

What GAO Recommends: 

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. 
FEMA agreed with the report and its recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-15-65]. For more 
information, contact Chris Currie at (404) 679-1875 or curriec@gao.gov. 

[End of figure] 

Contents: 

Letter: 

Background: 

FEMA's Administrative Costs Have Doubled, and an Integrated Plan Could 
Help Meet Its Goals of Reducing and Better Controlling These Costs: 

FEMA Obligated $1.7 Billion in Administrative Costs to Grantees and 
Subgrantees during Fiscal Years 2004 through 2013; 2007 Rule Led to 
Increased Complexity and Workload: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: GAO Analyses of the Number of Disaster Declarations and 
Amount of Obligations: 

Appendix III: Federal Emergency Management Agency (FEMA) 
Administrative Cost Categories: 

Appendix IV: The Federal Emergency Management Agency's (FEMA) Public 
Assistance (PA) Process, Project Categorization, and Direct 
Administrative Costs: 

Appendix V: Federal Emergency Management Agency (FEMA) Reimbursement 
Process for Public Assistance (PA) Management Costs: 

Appendix VI: Small Disaster Example - Major Disaster Declaration (DR-
1885) Kansas Severe Winter Storms and Snowstorm (Declared March 9, 
2010): 

Appendix VII: Large Disaster Example - Major Disaster Declaration (DR-
4085) New York Hurricane Sandy (Declared October 30, 2012): 

Appendix VIII: Sliding-Scale Administrative Allowance for Disasters 
Declared before November 13, 2007: 

Appendix IX: Comments from the Department of Homeland Security: 

Appendix X: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Disaster Relief Fund Obligations for 650 Major Disasters 
Declared during Fiscal Years 2004 through 2013: 

Table 2: Average Administrative Cost Percentage for Small, Medium, and 
Large Disasters Declared during Fiscal Years 1989 to 1998 and 2004 to 
2013: 

Table 3: Potential Reduction in FEMA Administrative Costs Had Its 
Targets Been Met for 650 Major Disasters Declared during Fiscal Years 
2004 to 2013: 

Table 4: Reduction in FEMA Administrative Costs Had Its Targets Been 
Met for 209 Major Disasters Declared during Fiscal Years 2011 to 2013: 

Table 5: Obligations for All Types of Administrative Costs Reimbursed 
to Grantees and Subgrantees of Public Assistance Grants during Fiscal 
Years 2004 through 2013: 

Table 6: Obligations for Management Costs and Direct Administrative 
Costs Reimbursed to Grantees and Subgrantees of Public Assistance 
Grants during Fiscal Years 2008 through 2013: 

Table 7: Number of Disaster Declarations during Fiscal Years 2004 
through 2013 by Jurisdiction: 

Table 8: Total Obligations for Major Disasters Declared during Fiscal 
Years 2004 through 2013, by Jurisdiction, as of April 30, 2014: 

Table 9: Obligations by Federal Emergency Management Agency's (FEMA) 
Administrative Cost Categories for DR-1885: 

Table 10: Obligations for Administrative Costs Reimbursed to Grantees 
and Subgrantees of Public Assistance Grants for DR-1885: 

Table 11: Obligations by Federal Emergency Management Agency (FEMA) 
Administrative Cost Categories for DR-4085: 

Table 12: Obligations for Administrative Costs Reimbursed to Grantees 
and Subgrantees of Public Assistance Grants for DR-4085: 

Table 13: Sliding-Scale Administrative Allowance for Grantees: 

Table 14: Sliding-Scale Administrative Allowance for Subgrantees: 

Figures: 

Figure 1: Major Disaster Declarations during Fiscal Years 2004 through 
2013: 

Figure 2: FEMA's Public Assistance Program Funding Structure: 

Figure 3: Total Disaster Relief Fund Obligations for 650 Major 
Disasters Declared during Fiscal Years 2004 through 2013 by Federal 
Emergency Management Agency (FEMA) Cost Category: 

Figure 4: Average Annual Administrative Cost Percentages for 1,332 
Major Disasters Declared during Fiscal Years 1989 through 2013: 

Figure 5: Total Disaster Relief Fund Obligations for 650 Major 
Disasters Declared during Fiscal Years 2004 through 2013 by Federal 
Emergency Management Agency (FEMA) Cost Category with Public 
Assistance Reimbursements: 

Figure 6: Example of a Subgrantee Project: City of Cedar Rapids, Iowa, 
Paramount Theatre: 

Figure 7: Perspectives on FEMA's Policies and Guidance for Direct 
Administrative Costs (DAC) - Federal Emergency Management Agency 
(FEMA) Public Assistance (PA) Branch Chiefs or their Designees: 

Figure 8: Perspectives on FEMA's Policies and Guidance for Direct 
Administrative Costs (DAC) - Grantees: 

Figure 9: Federal Emergency Management Agency (FEMA) Public Assistance 
Project Worksheet Development Process: 

Figure 10: Federal Emergency Management Agency (FEMA) Reimbursement 
Process for Public Assistance Management Costs: 

Figure 11: Designated Kansas Counties, and Obligations by Disaster 
Relief Fund Category, for DR-1885: 

Figure 12: Designated New York Counties, and Obligations by Disaster 
Relief Fund Category, for DR-4085: 

Abbreviations: 

DHS: Department of Homeland Security: 

DRF: Disaster Relief Fund: 

FCO: federal coordinating officer: 

FEMA: Federal Emergency Management Agency: 

FIT: Financial Information Tool: 

IFMIS: Integrated Financial Management Information System: 

JFO: joint field office: 

OMB: Office of Management and Budget: 

PA: Public Assistance: 

PMBOK® Guide: A Guide to the Project Management Body of Knowledge 
(PMBOK is a trademark of the Project Management Institute, Inc.): 

SRIA: Sandy Recovery Improvement Act of 2013: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

December 17, 2014: 

Congressional Requesters: 

The growth in major disaster declarations has led to increased federal 
expenditures, including increased administrative costs from the 
Federal Emergency Management Agency's (FEMA) Disaster Relief Fund 
(DRF).[Footnote 1] During the 10 fiscal years from 2004 through 2013, 
Presidents declared 32 percent more major disasters than in the 
preceding 10 fiscal years. For each major disaster, funds can be 
obligated from the DRF to cover the administrative costs of FEMA, 
other federal agencies, states, tribes, territories, local 
governments, and certain nonprofits, among others. FEMA's ability to 
fund administrative costs plays a key role in the wake of a disaster, 
allowing FEMA to deliver disaster assistance, and state, tribal, 
territorial, and local governments to manage federal disaster 
assistance grants. 

FEMA, a component of the Department of Homeland Security (DHS), leads 
the federal effort to mitigate, respond to, and recover from 
disasters, both natural and man-made. Major disaster declarations can 
trigger a variety of federal response and recovery programs for 
government and nongovernmental entities, households, and individuals. 
FEMA's disaster assistance programs include Individual Assistance, 
which provides financial assistance directly to individuals, and 
Public Assistance (PA), which provides financial assistance to state, 
tribal, territorial, and local governments.[Footnote 2] FEMA's DRF is 
the major source of federal disaster recovery assistance when a 
disaster is declared. The DRF is appropriated no-year funding, which 
allows FEMA to fund, direct, coordinate, and manage response and 
recovery efforts--including certain efforts by other federal agencies 
and state and local governments, among others--associated with 
domestic disasters and emergencies.[Footnote 3] 

FEMA obligates funds from the DRF to cover its administrative costs--
that is, costs that support the delivery of disaster assistance. 
FEMA's administrative costs include salary and travel costs for the 
disaster workforce, rent and security expenses for field operations, 
and supplies and information technology for field staff, among other 
things. 

In September 2012, we reported that from fiscal years 2004 through 
2011, FEMA obligated $80.3 billion, or an average of about $10 billion 
a year, from the DRF.[Footnote 4] We also conducted an analysis of 
FEMA's administrative costs for 539 major disasters declared during 
the same period that showed administrative cost percentages frequently 
exceeded FEMA's targets, although FEMA did not require that the 
targets be met. To help FEMA control its administrative costs, we 
recommended that FEMA implement goals for administrative cost 
percentages and monitor performance to achieve these goals. In August 
2014, FEMA reiterated that it partially concurred with our 
recommendation and that it continues to develop and implement more 
systematic approaches that will either directly or indirectly improve 
its ability to monitor administrative costs and performance. FEMA has 
not yet implemented our recommendation and plans to provide us a 
response by the end of second quarter of fiscal year 2015. 

FEMA also obligates funds from the DRF to reimburse certain 
administrative costs that state, tribal, territorial, and local 
governments incur when administering PA grants. For example, local 
governments that receive PA funding can be reimbursed for visiting, 
surveying, and assessing disaster sites, or paying private contractors 
that help manage these grants. In a November 2007 rule, FEMA 
implemented a new rate and process for reimbursing grantees and 
subgrantees of the PA program for administrative costs.[Footnote 5] 

Given the increasing cost, complexity, and size of disasters, you 
asked us to review these various administrative costs. Specifically, 
this report addresses: 

1. the extent to which DRF funds were obligated to cover FEMA's 
administrative costs for major disasters during fiscal years 2004 
through 2013, and what steps, if any, has FEMA taken to control these 
costs, and: 

2. the extent to which DRF funds were obligated to cover grantee and 
subgrantee administrative costs for PA grants and the impact, if any, 
of FEMA's November 2007 regulatory changes related to administrative 
costs. 

To address our first objective, we obtained and analyzed 
administrative cost obligations data from FEMA's Integrated Financial 
Management Information System (IFMIS) for each major disaster declared 
by the President during fiscal years 2004 through 2013. We focused on 
this time frame because it contains the most current data for major 
disasters. It also comprises the time period after FEMA was merged 
into the newly created DHS, on March 1, 2003, and predates Hurricane 
Katrina in 2005. We focused primarily on fiscal years 2004 through 
2013; however, to provide historical context and to compare results 
across similar periods, we also reviewed obligations data during 
fiscal years 1989 through 2013. We calculated the percentage of total 
federal assistance that was obligated for administrative costs for all 
major disasters declared during fiscal years 1989 through 2013. In 
addition, we determined whether these percentages were above or below 
FEMA's administrative cost targets--one of FEMA's efforts to better 
control costs--and whether FEMA's administrative costs increased or 
decreased during the period. To determine whether the IFMIS 
obligations data were reliable, we reviewed the data that FEMA 
officials provided, discussed data quality control procedures with 
relevant FEMA officials, and reviewed documentation such as DHS audits 
that included IFMIS to ensure the integrity of the data. We determined 
that the obligations data were sufficiently reliable for the purposes 
of this report. In addition, we interviewed officials from FEMA's 
Office of Chief Financial Officer and the Office of Response and 
Recovery, and obtained and analyzed documentation to determine what, 
if any, steps FEMA has taken to control costs and whether FEMA 
implemented administrative cost goals and tracks performance against 
the goals. We also obtained and analyzed FEMA policies, procedures, 
and guidance specific to administrative costs, such as FEMA's guidance 
to federal coordination officers (FCO), strategic plans, and its 
financial management codes guide and evaluated them using Standards 
for Internal Control in the Federal Government and project management 
guidance.[Footnote 6] 

To address our second objective, we obtained and analyzed data on DRF 
obligations to state, tribal, territorial, and local governments for 
PA-related administrative costs for major disasters declared during 
fiscal years 2004 through 2013.[Footnote 7] Specifically, we 
determined the amount FEMA obligated to state and local governments 
for each fiscal year during our scope. To determine whether the data 
were reliable, we reviewed the data that FEMA officials provided and 
discussed data quality control procedures to ensure the integrity of 
the data. We determined that the PA data were sufficiently reliable 
for the purposes of this report. We reviewed and analyzed FEMA 
policies, procedures, and guidance specific to state and local 
administrative costs, such as its Disaster Assistance Policy, and 
evaluated them using practices for good guidance.[Footnote 8] To 
assess the impact of FEMA's 2007 interim final rule on administrative 
costs,[Footnote 9] we visited three FEMA regional offices, including 
Region II, located in New York, New York; Region IV, located in 
Atlanta, Georgia; and Region VII, located in Kansas City, Missouri. 
[Footnote 10] In addition, we conducted semi-structured interviews 
with PA officials (Branch Chiefs or their designee) from all 10 of 
FEMA's regions, 10 state emergency management officials (i.e., 
grantees), and 11 local officials (i.e., subgrantees). The information 
obtained from the states and localities cannot be generalized 
nationwide. However, the information obtained from these states and 
localities provides insight into the issues grantees and subgrantees 
encounter during the disaster recovery process. 

We conducted this performance audit from November 2013 to December 
2014 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. See 
appendix I for more information on our scope and methodology. 

Background: 

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, 
as amended, established the process by which a state may request a 
presidential disaster declaration.[Footnote 11] According to the act, 
the President can declare a major disaster after a governor or chief 
executive of an affected tribal government finds that a disaster is of 
such severity and magnitude that effective response is beyond the 
capabilities of the state and local governments and that federal 
assistance is necessary.[Footnote 12] The act also generally defines 
the federal government's role during disaster response and recovery 
and establishes the programs and processes through which the federal 
government provides disaster assistance to state, tribal, territorial, 
and local governments as well as certain nonprofit organizations, and 
individuals.[Footnote 13] Figure 1 shows the number of major disasters 
declared during fiscal years 2004 through 2013. See appendix II for 
the number of disaster declarations during fiscal years 2004 through 
2013 by jurisdiction.[Footnote 14] 

Figure 1: Major Disaster Declarations during Fiscal Years 2004 through 
2013: 

[Refer to PDF for image: horizontal bar graph] 

Major disaster declarations: 

2004: 65; 
2005: 45; 
2006: 53; 
2007: 68; 
2008: 68; 
2009: 63; 
2010: 79; 
2011: 98; 
2012: 46; 
2013: 65. 

Source: GAO analysis of FEMA data. GAO-15-65. 

[End of figure] 

Major disaster declarations can trigger a variety of federal 
assistance programs and activities for governmental and 
nongovernmental entities, households, and individuals. FEMA's programs 
and activities include: PA, Individual Assistance, Hazard Mitigation, 
and Mission Assignment.[Footnote 15] FEMA tracks DRF obligations for 
major disasters in five categories, which consist of four of the 
agency's programs and activities, and its administrative costs. Table 
1 highlights that, as of April 2014, FEMA obligated $95.2 billion for 
the 650 major disasters declared during the period of our review. See 
appendix II for obligations for disaster declarations during fiscal 
years 2004 through 2013, by jurisdiction. 

Table 1: Disaster Relief Fund Obligations for 650 Major Disasters 
Declared during Fiscal Years 2004 through 2013: 

Dollars in millions: 

Major disasters: Hurricane Katrina; 
Public Assistance: $16,688; 
Individual Assistance: $13,985; 
Hazard Mitigation: $1,584; 
Mission Assignment: $3,671; 
Federal Emergency Management Agency administrative costs: $5,405; 
Total: $41,333. 

Major disasters: Hurricane Sandy; 
Public Assistance: $4,071; 
Individual Assistance: $1,805; 
Hazard Mitigation: $121; 
Mission Assignment: $365; 
Federal Emergency Management Agency administrative costs: $840; 
Total: $7,203. 

Major disasters: Disasters other than Katrina and Sandy; 
Public Assistance: $24,568; 
Individual Assistance: $10,096; 
Hazard Mitigation: $3,495; 
Mission Assignment: $2,056; 
Federal Emergency Management Agency administrative costs: $6,461; 
Total: $46,677. 

Major disasters: All disasters; 
Public Assistance: $45,327; 
Individual Assistance: $25,887; 
Hazard Mitigation: $5,200; 
Mission Assignment: $6,093; 
Federal Emergency Management Agency administrative costs: $12,706; 
Total: $95,213. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: Obligations may not add up to the total obligations reported 
because of rounding. This table provides actual obligations from the 
Disaster Relief Fund (DRF) as of April 30, 2014. Thus, amounts in the 
table are understated, as FEMA will obligate additional funds for 
disasters for which recovery efforts have not been completed (e.g., 
Hurricane Sandy). 

[End of table] 

FEMA's Administrative Costs: 

FEMA defines administrative costs for major disasters as costs that 
support the delivery of disaster assistance.[Footnote 16] Examples of 
FEMA administrative costs include the salary and travel costs for the 
disaster workforce, rent and security expenses associated with field 
operation locations, and supplies and information technology for field 
operation staff. According to FEMA officials, the agency's 
administrative costs for major disasters primarily support field 
operation activities; however, administrative costs can also be 
incurred at FEMA regional offices, headquarters, and other locations, 
such as FEMA's National Processing Service Center--that is, a service 
center where FEMA officials register individuals and families for 
Individual Assistance.[Footnote 17] See appendix III for a detailed 
description of FEMA's administrative costs categories. 

Public Assistance Process: 

PA is the largest of FEMA's major disaster programs, comprising nearly 
half the funds obligated from the DRF for major disasters. PA funds 
debris removal and the repair, replacement, or restoration of disaster-
damaged facilities. PA also funds certain types of emergency work 
designed to, among other things, eliminate immediate threats to lives, 
public health and safety, and property. After a disaster, FEMA works 
with the affected state, tribal, or territorial government to set up a 
joint field office (JFO) at or near the disaster site to administer PA 
grants.[Footnote 18] FEMA staffing usually consists of (1) permanent 
full-or part-time employees, (2) nonpermanent reserve staff, and (3) 
technical assistance contractors. In addition, the JFO may be staffed 
by personnel from the affected government's emergency management 
office. The majority of FEMA staff assigned to the JFO consists of 
nonpermanent reserve staff who are typically deployed for short-term 
assignments (i.e., 90 to 120 days). Technical assistance contractors 
may provide specialized assistance in areas such as structural, 
mechanical, and civil engineering. 

Federal, state, tribal, territorial, and local officials each play a 
significant role in carrying out the steps in the PA funding process. 
In this process, the state, tribal, or territorial government is the 
"grantee" that manages and disburses PA funds, and the affected local 
governments or equivalent entities are typically the "subgrantees" 
that receive the funds. A subgrantee can be any eligible state or 
local government entity--for example, school district, county, or 
township--or certain nonprofits. After a disaster is declared, FEMA, 
state, tribal, or territorial representatives brief applicants on the 
program, and FEMA, among other things, assigns a PA coordinator, 
project officers, and technical specialists to assist the applicant 
through the PA funding process. After determining the subgrantees and 
projects eligible for funding, FEMA works with the grantee and 
subgrantees to develop project worksheets that describe the scope of 
work and estimated cost. FEMA also conducts historic preservation and 
environmental reviews as part of its approval process. See appendix IV 
for further details on the PA process. 

Grantee and Subgrantee Administrative Costs: 

FEMA reimburses grantees and subgrantees for some expenses associated 
with administering PA grants. FEMA divides these reimbursements into 
two categories: section 324 management costs (management costs) and 
direct administrative costs. Management costs are any indirect costs, 
any administrative expense, and any other expense not directly 
chargeable to a specific project.[Footnote 19] FEMA defines direct 
administrative costs as costs incurred by the grantee or subgrantee 
that can be identified separately and assigned to a specific 
project.[Footnote 20] 

Examples of management costs: 

* activities related to attending and participating in the applicant's 
briefing for the overall PA grant, 

* travel expenses related to general support and not tied directly to 
one specific project, and: 

* activities related to attending, coordinating, and responding to 
correspondence and meeting requests from FEMA and grantee officials 
for the overall program and not specific to one project. 

Examples of direct administrative costs: 

* activities related to developing a detailed site-specific damage 
description component of one specific project worksheet, 

* activities related to visiting, surveying, and assessing sites for 
one specific project, and: 

* travel expenses related to one specific project. 

Side bar: 

Examples of Management Costs and Direct Administrative Costs: 

Management costs; 
* Disaster: DR-4068; 
* State: Florida; 
* Declared: July 3, 2012; 
* Description: Tropical Storm Debby; 
* Amount: $3,910,571; 
* Activity examples: (1) maintaining a website to house documentation 
and closeout information for Public Assistance (PA) activities, and 
(2) pay office rent costs for space occupied by PA staff. 

Direct administrative costs; 
* Disaster: DR-1971; 
* State: Alabama; 
* Declared: April 28, 2011; 
* Description: severe storms, tornadoes, straight-line winds, and 
flooding; 
* Amount: $1,987,670; 
* Activity examples: (1) develop, write, and review project 
documentation; (2) assess project eligibility; (3) gather and review 
payroll data, and invoices; (4) and perform data entry. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

[End of side bar] 

In fiscal year 2008, FEMA changed the way it reimburses grantees and 
subgrantees for management costs. In November 2007, pursuant to the 
Disaster Mitigation Act of 2000,[Footnote 21] FEMA implemented an 
interim final rule that established rates for reimbursing grantee and 
subgrantee management costs associated with PA grants.[Footnote 22] 
For major disaster declarations, FEMA set management costs at a 
percentage rate of no more than 3.34 percent of the federal share of 
projected eligible program costs for assistance.[Footnote 23] In 
addition, FEMA officials stated that the 2007 rule changed the process 
by which grantees and subgrantees received management costs 
reimbursement. Figure 2 outlines the funding process for grantees and 
subgrantees for PA administrative costs. According to agency 
officials, FEMA set the management costs rate at 3.34 percent after 
determining that it was approximately the historical average of all 
management and administrative costs. See appendix V for further 
details on the reimbursement process for management costs. 

Figure 2: FEMA's Public Assistance Program Funding Structure: 

[Refer to PDF for image: illustration] 

Disaster Relief Fund: Pass-through of funds to: 
Federal Emergency Management Agency (FEMA): Pass-through of funds to: 
Grantee: 
* Funds reimbursed to entity: Grantee direct administrative costs; 
* Funds reimbursed to entity: Section 324 management costs (Grantee 
may pass through
section 324 management costs to Subgrantee); 
Pass-through of funds to: 
Subgrantee: 
* Funds reimbursed to entity: Subgrantee direct administrative costs; 
* Funds reimbursed to entity: Disaster assistance. 

Source: GAO analysis of FEMA Information. GAO-15-65. 

[End of figure] 

FEMA's Administrative Costs Have Doubled, and an Integrated Plan Could 
Help Meet Its Goals of Reducing and Better Controlling These Costs: 

FEMA Administrative Costs: 

FEMA obligated $12.7 billion from the DRF to cover its administrative 
costs for the 650 major disasters declared during fiscal years 2004 
through 2013. As shown in figure 3, the $12.7 billion represents 13 
percent of the $95.2 billion obligated from the DRF for the 650 major 
disasters during this time period. Figure 3 provides a breakout of 
FEMA's cost categories for major disasters and how much was obligated 
for each category from the DRF. 

Figure 3: Total Disaster Relief Fund Obligations for 650 Major 
Disasters Declared during Fiscal Years 2004 through 2013 by Federal 
Emergency Management Agency (FEMA) Cost Category: 

[Refer to PDF for image: pie-chart] 

Public assistance: $45.3 billion; 48%: 
Individual assistance: $25.9 billion, 27%; 
FEMA administrative costs: $12.7 billion; 13%; 
Mission assignment: $6.1 billion; 6%; 
Hazard mitigation: $5.2 billion; 5%. 

Source: GAO analysis of FEMA data. GAO-15-65. 

Note: Percentages in the figure do not total 100 percent due to 
rounding. This figure provides actual obligations from the Disaster 
Relief Fund (DRF) as of April 30, 2014. 

[End of figure] 

While figure 3 shows the total amount FEMA obligated for its 
administrative costs from the DRF, it is significantly impacted by 
large disasters such as Hurricane Katrina. For example, of the $12.7 
billion FEMA obligated for its administrative costs during fiscal 
years 2004 through 2013, $5.4 billion, or 43 percent, related to 
Hurricane Katrina. Therefore, the 13 percent shown in figure 3 is 
significantly affected by one disaster. Figure 3 also does not provide 
information about FEMA's administrative costs for individual 
disasters. One measure FEMA uses to understand administrative costs 
for a single major disaster is a disaster's administrative cost 
percentage--that is, administrative cost obligations divided by total 
obligations.[Footnote 24] A benefit to analyzing administrative cost 
percentages is that FEMA can assess whether a reasonable amount of 
administrative costs were obligated for a single disaster. 

Our analysis shows that FEMA's average annual administrative cost 
percentages for major disasters have doubled since fiscal year 1989. 
[Footnote 25] Specifically, we calculated the average administrative 
cost for each fiscal year from 1989 to 2013 to identify long-term 
trends in FEMA's administrative costs. For example, to determine the 
average for fiscal year 2013, we calculated the administrative cost 
percentage for each of the 65 major disasters declared in fiscal year 
2013. Next, we calculated the average of the 65 administrative costs 
percentages. As shown in figure 4, FEMA's average administrative cost 
percentage was 18 percent in fiscal year 2013, which more than doubled 
the average of 7 percent in fiscal year 1989. 

Figure 4: Average Annual Administrative Cost Percentages for 1,332 
Major Disasters Declared during Fiscal Years 1989 through 2013: 

[Refer to PDF for image: vertical bar graph] 

1989: 6.7%; 
1990: 5.8%; 
1991: 8.8%; 
1992: 8.3%; 
1993: 11.2%; 
1994: 8.6%; 
1995: 11.1%; 
1996: 8.3%; 
1997: 13.1%; 
1998: 10.4%; 
1999: 15.6%; 
2000: 21.2%; 
2001: 15.0%; 
2002: 20.2%; 
2003: 16.6%; 
2004: 16.9%; 
2005: 17.4%; 
2006: 17.3%; 
2007: 18.6%; 
2008: 21.6%; 
2009: 19.8%; 
2010: 18.8%; 
2011: 15.9%; 
2012: 18.3%; 
2013: 18.4%. 

Source: GAO analysis of FEMA data. GAO-15-65. 

[End of figure] 

FEMA categorizes major disasters using three event levels--small, 
medium, or large--based on the projected amount of federal funding to 
be obligated for disaster assistance. Small disasters have projected 
disaster assistance of less than $50 million, medium disasters have 
projected disaster assistance from $50 million to $500 million, and 
large disasters have projected disaster assistance of $500 million to 
$5 billion.[Footnote 26] FEMA's administrative cost percentages are 
typically higher for small disasters than for large disasters. For 
example, FEMA may be able to achieve economies of scale for relatively 
large disasters, thereby reducing the related administrative cost 
percentage. Examples of administrative costs and other DRF obligations 
for a small and large disaster are provided in appendixes VI and VII. 

Our analysis shows that FEMA's average administrative cost percentage 
at least doubled for all sizes of disasters--small, medium, and large. 
For example, for small disasters, FEMA's average administrative cost 
percentage was 20 percent during the fiscal year 2004-to-2013 period, 
doubling the average of 10 percent during the fiscal year 1989-to-1998 
period.[Footnote 27] Table 2 shows FEMA's average administrative costs 
percentage for small, medium, large, and all disasters combined. 

Table 2: Average Administrative Cost Percentage for Small, Medium, and 
Large Disasters Declared during Fiscal Years 1989 to 1998 and 2004 to 
2013: 

Size of major disasters: Small; 
Average FEMA administrative cost percentage during 1989-to-1998 
period: 10%; 
Average FEMA administrative cost percentage during 2004-to-2013 
period: 20%. 

Size of major disasters: Medium; 
Average FEMA administrative cost percentage during 1989-to-1998 
period: 6%; 
Average FEMA administrative cost percentage during 2004-to-2013 
period: 12%. 

Size of major disasters: Large; 
Average FEMA administrative cost percentage during 1989-to-1998 
period: 5%; 
Average FEMA administrative cost percentage during 2004-to-2013 
period: 13%. 

Size of major disasters: All disasters; 
Average FEMA administrative cost percentage during 1989-to-1998 
period: 9%; 
Average FEMA administrative cost percentage during 2004-to-2013 
period: 18%. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

[End of table] 

We also found a wide variance in administrative costs percentages for 
disasters of similar sizes in fiscal years 2004 to 2013, and for small 
disasters, instances where FEMA charged the DRF more for 
administrative costs than assistance.[Footnote 28] Specifically: 

* For the 518 small disasters (total disaster assistance of less than 
$50 million), administrative cost percentages averaged 20 percent, and 
ranged from less than 1 percent to 74 percent. Sixteen or 3 percent of 
the 518 small disasters had administrative costs that were equal to, 
or exceeded, the disaster assistance. 

* For the 112 medium disasters (total disaster assistance from $50 
million to $500 million), administrative cost percentages averaged 12 
percent, and ranged from 1 percent to 29 percent. None of the medium 
disasters had administrative costs that were equal to, or exceeded, 
disaster assistance. 

* For the 20 large disasters (total disaster assistance from $500 
million to $5 billion), administrative cost percentages averaged 13 
percent, and ranged from 3 percent to 25 percent. None of the large 
disasters had administrative costs that were equal to, or exceeded, 
disaster assistance. 

As we reported in September 2012, FEMA created a management guide in 
November 2010 that included targets for administrative cost 
percentages; however, the agency does not consider the targets formal 
guidance and does not hold its officials accountable for meeting the 
targets. FEMA did not require that the targets be met because 
according to FEMA officials, the agency's intent was to provide 
general guidance rather than to stipulate a prescriptive policy or 
formula. Further, according to FEMA's management guide, one limitation 
of the targets is that "there will be situations where the [target] 
levels are inappropriate due to extraordinary circumstances." As 
mentioned earlier, FEMA categorizes major disasters using three event 
levels, essentially small, medium, or large, based on the amount of 
federal funding for the disaster, and the 2010 guidance established 
target ranges for administrative cost percentages for each category: 

* Small disasters have an administrative cost percentage target range 
of 12 percent to 20 percent. 

* Medium disasters have an administrative cost percentage target range 
of 9 percent to 15 percent. 

* Large disasters have an administrative cost percentage target range 
of 8 percent to 12 percent. 

To help FEMA control its administrative costs, we recommended in 2012 
that FEMA implement goals for administrative cost percentages and 
monitor performance to achieve these goals. FEMA has not yet 
implemented our recommendation and plans to provide us a response by 
the end of the second quarter of fiscal year 2015. Table 3 shows the 
potential reduction in administrative costs had FEMA met the high and 
low ends of its target range for the 650 major disasters declared 
during fiscal years 2004 through 2013. For example, 259, or 40 
percent, of the 650 major disasters exceeded the high end of FEMA's 
target range for administrative cost percentages. Had FEMA's 
administrative cost percentages for the 259 major disasters equaled 
the high end of the target range, obligations for administrative costs 
would have been $2.3 billion lower. FEMA did not develop the target 
ranges until November 2010, and FEMA does not require its officials to 
stay within or below the target ranges. As a result, this analysis 
does not indicate the amount that FEMA should have saved during this 
period. Rather, the analysis can be used as an indication of potential 
cost savings in the future, if the target ranges are met.[Footnote 29] 

Table 3: Potential Reduction in FEMA Administrative Costs Had Its 
Targets Been Met for 650 Major Disasters Declared during Fiscal Years 
2004 to 2013: 

Target: High end of target range; 
Number of major disasters above target: 259; 
Percentage of major disasters above target: 40%; 
Reduction in administrative costs had FEMA met target: $2.3 billion. 

Target: Low end of target range; 
Number of major disasters above target: 453; 
Percentage of major disasters above target: 70%; 
Reduction in administrative costs had FEMA met target: $5.1 billion. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: The high end of FEMA's administrative cost percentage target 
range was 20 percent for small disasters, 15 percent for medium 
disasters, and 12 percent for large disasters. The low end of FEMA's 
administrative cost percentage target range was 12 percent for small 
disasters, 9 percent for medium disasters, and 8 percent for large 
disasters. 

[End of table] 

Table 4 shows the potential reduction in administrative costs had FEMA 
met the high and low ends of its target range for the 209 disasters 
declared during fiscal years 2011 through 2013--that is, the time 
period since FEMA created its administrative cost targets.[Footnote 30] 

Table 4: Reduction in FEMA Administrative Costs Had Its Targets Been 
Met for 209 Major Disasters Declared during Fiscal Years 2011 to 2013: 

Target: High end of target range; 
Number of major disasters above target: 76; 
Percentage of major disasters above target: 36%; 
Reduction in administrative costs had FEMA met target: $312 millions. 

Target: Low end of target range; 
Number of major disasters above target: 144; 
Percentage of major disasters above target: 69%; 
Reduction in administrative costs had FEMA met target: $841 millions. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: The high end of FEMA's administrative cost percentage target 
range was 20 percent for small disasters, 15 percent for medium 
disasters, and 12 percent for large disasters. The low end of FEMA's 
administrative cost percentage target range was 12 percent for small 
disasters, 9 percent for medium disasters, and 8 percent for large 
disasters. 

[End of table] 

FEMA Has Taken Steps to Better Control and Reduce Administrative 
Costs, But Lacks An Integrated Plan to Achieve These Goals: 

As we reported in 2012, FEMA officials said that it was difficult to 
identify the principal factors causing increases in administrative 
costs since fiscal year 1989 because of the complexities associated 
with the underlying factors, particularly in light of the span of time 
involved. We further reported that FEMA officials stated that the 
agency has evolved from one originally focused on grants management to 
an organization implementing increasingly more complex programs with 
an increasingly sophisticated and specialized workforce. In addition, 
FEMA officials told us that there is a tension between efficiency and 
effectiveness of delivering disaster assistance--for example, reducing 
administrative costs could negatively affect FEMA's ability to help 
individuals and families recover from a disaster. FEMA officials 
provided information on several ongoing efforts to better manage and 
control its administrative costs, as discussed below. 

FEMA's 2010 guidance. In November 2010, FEMA issued guidelines 
intended to better control its administrative costs.[Footnote 31] The 
guidance states that FEMA had "witnessed spiraling administrative 
costs and staffing levels" since fiscal year 1989, and that all agency 
managers would be accountable for controlling administrative costs. It 
also noted that staffing levels had risen significantly faster than 
disaster activity, with a tripling in the average number of FEMA staff 
deployed per year. For example, the average number of FEMA staff 
deployed to a disaster increased significantly, from fewer than 500 in 
fiscal year 1989 to over 1,500 in fiscal year 2009. The memorandum 
noted that FEMA had provided limited guidance for controlling costs 
and staffing levels (i.e., the main driver of administrative costs), 
and that FEMA managers did not have uniform guidance to control 
administrative costs. The guidance also included best practices for 
staffing levels and staff deployment times, and considerations for 
whether to use less costly Virtual JFOs instead of physical 
offices.[Footnote 32] Moreover, the guidance set targets for 
administrative cost percentages. According to FEMA officials, the 
guide is used to train field leadership and reflect the importance of 
administrative cost management. However, FEMA did not require that 
this guidance be followed or targets be met because the agency's 
intent was to ensure flexibility and provide general guidance rather 
than to stipulate a prescriptive policy or formula. 

FEMAStat. In 2012 and 2013, the agency's FEMAStat team collected and 
analyzed data on administrative costs associated with managing 
disasters.[Footnote 33] The FEMAStat team found that FEMA (1) did not 
leverage benchmarks and information about past deployments to inform 
staffing decisions; (2) cost drivers, such as workload forecasts and 
local capacity, were not accessible for its analytical purposes; and 
(3) had not defined when the less costly Virtual JFOs should be used. 
It also found that there is little predictability in the number of 
FEMA PA staff deployed to disasters--for instance, one disaster had 
roughly three times as many PA staff as another similar-sized 
disaster. The FEMAStat team concluded that while it had demonstrated 
that data from past disasters could be used to control costs, FEMA had 
to determine who has the authority and responsibility to monitor and 
question these staffing levels, as well as put into place a process to 
formalize this practice. As of September 2014, FEMA officials said 
that the agency was working to implement the FEMAStat recommendations. 
As a result, it is too early to assess whether this effort will reduce 
administrative costs. 

Strategic plan goal. In July 2014, FEMA issued its Strategic Plan for 
2014-2018, which includes a goal to reduce its average annual 
percentage of administrative costs, as compared with total program 
costs, by 5 percentage points, by the end of 2018.[Footnote 34] 
According to FEMA officials, the goal to reduce FEMA's administrative 
costs reflects its importance to FEMA. FEMA officials stated that the 
agency determined that a 5 percentage point reduction was aggressive, 
but reasonable based on its review of administrative costs for 
previous disasters. In conjunction with this goal, FEMA officials also 
told us that they revised their definition of administrative costs as 
of October 1, 2014. For example, according to FEMA officials, the 
previous definition of administrative costs included the cost 
associated with urban search and rescue operations; however, they said 
these costs would be better defined as operational. As of October 
2014, FEMA had yet to determine the starting percentage from which it 
will reduce 5 percentage points. According to FEMA officials, the 
agency will identify this starting point during fiscal year 2015 using 
the new definition of administrative costs. 

Other ongoing steps to reduce administrative costs. FEMA has several 
other ongoing actions that have helped, or could eventually help, to 
reduce administrative costs, as follows: 

* Placing greater scrutiny on the amount of overtime worked by 
disaster assistance personnel. For example, according to FEMA, since 
2011, FEMA has decreased the average overtime per person from almost 
16 hours per pay period to 7.5 hours per pay period. 

* Eliminating unnecessary or duplicative telecommunication services. 
For example, according to FEMA, since April 2013, FEMA has reduced 
monthly telecommunication costs by more than $1 million per month. 

* Implementing new flexibilities and pilot programs authorized by the 
Sandy Recovery Improvement Act of 2013 that could help reduce its 
administrative costs.[Footnote 35] For example, the act authorizes 
FEMA to implement alternate procedures for administering the PA 
program that allow FEMA to provide grants based on up-front estimated 
costs for PA projects. According to FEMA, this could alleviate some of 
the administrative burden for FEMA and grantees during the PA process. 
[Footnote 36] However, according to FEMA officials, these efforts are 
in the very early stages, and FEMA will not know for several years 
whether these pilot programs actually lead to reduced administrative 
costs. 

FEMA officials do not have an integrated plan for how they will better 
control and reduce administrative costs for major disasters, and have 
not identified the office or officials accountable for overseeing 
administrative costs. FEMA's November 2010 management guide stated 
that "little emphasis has been placed on managing overall 
[administrative] costs." Since the guide was created, FEMA officials 
have taken a number of steps intended to better control and reduce the 
agency's administrative costs for major disasters. However, despite 
FEMA's efforts since November 2010, FEMA's average administrative cost 
percentages have not significantly decreased. According to FEMA 
officials, they have not developed a plan that integrates the steps 
they are taking to better control and reduce costs, and that 
highlights clear roles and responsibilities, performance metrics, 
milestones, and a monitoring system to assess their progress. In 
addition, according to FEMA officials, the agency has not designated 
an office or senior officials accountable for controlling 
administrative costs. For example, as part of the FEMAStat initiative, 
FEMA officials highlighted that it was unclear who had authority and 
responsibility to monitor and question staffing levels, even though 
staffing is the largest driver of administrative costs. 

According to A Guide to the Project Management Body of Knowledge, 
which provides standards for project managers, specific goals and 
objectives should be conceptualized, defined, and documented in the 
planning process, along with the appropriate steps, time frames, and 
milestones needed to achieve those results.[Footnote 37] According to 
the Standards for Internal Control in the Federal Government, managers 
should compare actual performance to planned or expected results 
throughout the organization and analyze significant differences; it 
also states that an agency's organizational structure should clearly 
define key areas of authority and responsibility and establish 
appropriate lines of reporting.[Footnote 38] Designating an office or 
senior official with sufficient time, responsibility, authority, and 
resources can help improve FEMA's accountability and progress. Until a 
plan that integrates FEMA's initiatives is created, FEMA will continue 
to lack assurance that it has an effective and efficient plan for 
reaching its goals to better control and reduce costs. During our 
interviews with FEMA officials, they agreed that identifying agency 
officials who will be accountable, and creating a plan, would be 
beneficial to reach the agency's goals to better control and reduce 
administrative costs. 

FEMA Could Better Track and Analyze Administrative Costs by DRF 
Program: 

In analyzing FEMA administrative costs, we found that the agency does 
not track or analyze its administrative costs for major disasters by 
individual DRF program--including PA, Individual Assistance, and 
Hazard Mitigation.[Footnote 39] For example, FEMA could tell us how 
much it obligated for its own administrative costs, in total, for the 
Hurricane Sandy disaster response, but not how much it has obligated 
for its administrative costs related to each DRF program. Without 
administrative cost data by program, neither we, nor FEMA, can 
determine whether increases in administrative cost percentages since 
fiscal year 1989 were greater for one program than for another, or 
greater for certain components, such as staffing for a particular DRF 
program. For example, in responding to disasters, costs may be higher 
for providing individual assistance than other programs, which can 
drive up the administrative costs for the entire disaster. Better 
understanding the drivers of administrative costs and collecting these 
data could allow FEMA to more effectively identify cost drivers and 
help control its administrative expenses. 

According to FEMA officials, gathering administrative costs data by 
DRF program would require additional resources and technical changes; 
however, the agency has not assessed the costs versus the benefits of 
tracking the data. FEMA officials stated that assessing the costs and 
benefits would be helpful, and they agreed that administrative costs 
should be tracked by program. According to Standards for Internal 
Control in the Federal Government, program managers need financial 
data to determine whether they are meeting their goals for 
accountability for effective and efficient use of resources. Further, 
FEMA's 2014-2018 Strategic Plan emphasizes the need for data-driven 
decision making.[Footnote 40] By assessing the costs and benefits of 
tracking administrative cost data by DRF programs, FEMA could 
determine whether such data could be useful for identifying long-term 
trends, more effectively controlling its administrative costs, and 
better tailoring its administrative costs to program delivery. 

FEMA Obligated $1.7 Billion in Administrative Costs to Grantees and 
Subgrantees during Fiscal Years 2004 through 2013; 2007 Rule Led to 
Increased Complexity and Workload: 

Grantee and Subgrantee Administrative Costs: 

For the 650 major disasters declared during fiscal years 2004 through 
2013, FEMA obligated $1.7 billion to reimburse grantees and 
subgrantees for all types of administrative costs associated with PA 
grants. The $1.7 billion is 2 percent of the $95.2 billion obligated 
from the DRF during this period. Figure 5 provides total DRF 
obligations, including grantee and subgrantee administrative costs, 
for the 650 major disasters declared during fiscal years 2004 through 
2013 by FEMA cost category. 

Figure 5: Total Disaster Relief Fund Obligations for 650 Major 
Disasters Declared during Fiscal Years 2004 through 2013 by Federal 
Emergency Management Agency (FEMA) Cost Category with Public 
Assistance Reimbursements: 

[Refer to PDF for image: pie-chart] 

Public assistance: $45.3 billion; 48%: 
* Grantee and subgrantee administrative costs: $1.7 billion; (2% of 
total DRF obligations and 4% of public assistance obligations); 
Individual assistance: $25.9 billion, 27%; 
FEMA administrative costs: $12.7 billion; 13%; 
Mission assignment: $6.1 billion; 6%; 
Hazard mitigation: $5.2 billion; 5%. 

Source: GAO analysis of FEMA data. GAO-15-65. 

Note: Percentages in the figure do not total 100 percent due to 
rounding. 

[End of figure] 

Administrative costs reimbursed to grantees and subgrantees, as a 
percentage of total PA funding, ranged from 0.9 percent to 4.7 percent 
per year, as shown in table 5. 

Table 5: Obligations for All Types of Administrative Costs Reimbursed 
to Grantees and Subgrantees of Public Assistance Grants during Fiscal 
Years 2004 through 2013: 

Dollars in millions: 

Fiscal year: 2004; 
Public Assistance: $3,691; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $118; 
All types of administrative costs as a percentage of Public 
Assistance: 3.2%. 

Fiscal year: 2005; 
Public Assistance: $18,729; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $822; 
All types of administrative costs as a percentage of Public 
Assistance: 4.4%. 

Fiscal year: 2006; 
Public Assistance: $2,537; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $119; 
All types of administrative costs as a percentage of Public 
Assistance: 4.7%. 

Fiscal year: 2007; 
Public Assistance: $1,607; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $72; 
All types of administrative costs as a percentage of Public 
Assistance: 4.5%. 

Fiscal year: 2008; 
Public Assistance: $6,213; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $243; 
All types of administrative costs as a percentage of Public 
Assistance: 3.9%. 

Fiscal year: 2009; 
Public Assistance: $1,737; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $72; 
All types of administrative costs as a percentage of Public 
Assistance: 4.1%. 

Fiscal year: 2010; 
Public Assistance: $1,593; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $54; 
All types of administrative costs as a percentage of Public 
Assistance: 3.4%. 

Fiscal year: 2011; 
Public Assistance: $3,645; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $91; 
All types of administrative costs as a percentage of Public 
Assistance: 2.5%. 

Fiscal year: 2012; 
Public Assistance: $898; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $21; 
All types of administrative costs as a percentage of Public 
Assistance: 2.3%. 

Fiscal year: 2013; 
Public Assistance: $4,677; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $40; 
All types of administrative costs as a percentage of Public 
Assistance: 0.9%. 

Fiscal year: Total; 
Public Assistance: $45,327; 
All types of administrative costs reimbursed to grantees and 
subgrantees for Public Assistance Grants: $1,652; 
All types of administrative costs as a percentage of Public 
Assistance: 3.6%. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: Obligations may not add up to the total obligations reported 
because of rounding. This table provides actual obligations from the 
Disaster Relief Fund (DRF) as of April 30, 2014. Thus, amounts in the 
table are understated as FEMA will obligate additional funds for major 
disasters that have not been completed (e.g., Hurricane Sandy). 

[End of table] 

In fiscal year 2008, FEMA implemented a rule that changed the 
administrative reimbursements available for grantees and subgrantees 
of PA grants.[Footnote 41] Under the rule, grantees and subgrantees 
are eligible for two forms of administrative reimbursements: 
management costs and direct administrative costs. As shown in table 6, 
FEMA obligated $383 million in management costs and $132 million in 
direct administrative costs for major disasters declared during fiscal 
years 2008 through 2013. Many PA projects for major disasters declared 
during fiscal years 2008 through 2013 have not been completed; thus 
obligations for management costs and direct administrative costs in 
tables 5 and 6 will likely increase as these projects are completed. 

Table 6: Obligations for Management Costs and Direct Administrative 
Costs Reimbursed to Grantees and Subgrantees of Public Assistance 
Grants during Fiscal Years 2008 through 2013: 

Dollars in millions: 

Fiscal year: 2008; 
Public Assistance: $6,069; 
Management costs: $194; 
Management costs as a percentage of Public Assistance: 3.2%; 
Direct administrative costs: $43; 
Direct administrative costs as a percentage of Public Assistance: 0.7%. 

Fiscal year: 2009; 
Public Assistance: $1,737; 
Management costs: $57; 
Management costs as a percentage of Public Assistance: 3.3%; 
Direct administrative costs: $15; 
Direct administrative costs as a percentage of Public Assistance: 0.8%. 

Fiscal year: 2010; 
Public Assistance: $1,593; 
Management costs: $37; 
Management costs as a percentage of Public Assistance: 2.4%; 
Direct administrative costs: $16; 
Direct administrative costs as a percentage of Public Assistance: 1.0%. 

Fiscal year: 2011; 
Public Assistance: $3,645; 
Management costs: $65; 
Management costs as a percentage of Public Assistance: 1.8%; 
Direct administrative costs: $27; 
Direct administrative costs as a percentage of Public Assistance: 0.7%. 

Fiscal year: 2012; 
Public Assistance: $898; 
Management costs: $15; 
Management costs as a percentage of Public Assistance: 1.6%; 
Direct administrative costs: $6; 
Direct administrative costs as a percentage of Public Assistance: 0.7%. 

Fiscal year: 2013; 
Public Assistance: $4,677; 
Management costs: $15; 
Management costs as a percentage of Public Assistance: 0.3%; 
Direct administrative costs: $25; 
Direct administrative costs as a percentage of Public Assistance: 0.5%. 

Fiscal year: Total; 
Public Assistance: $18,619; 
Management costs: $383; 
Management costs as a percentage of Public Assistance: 2.0%; 
Direct administrative costs: $132; 
Direct administrative costs as a percentage of Public Assistance: 0.7%. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: This table provides actual obligations from the Disaster Relief 
Fund (DRF) as of April 30, 2014. Thus, amounts in the table are 
understated, as FEMA will obligate additional funds for disasters that 
have not been completed (e.g., Hurricane Sandy). One major disaster in 
fiscal year 2008 was declared prior to FEMA's November 2007 rule 
change. As such, obligations for this major disaster are not included 
in the table. 

[End of table] 

2007 Rule Change Led to Increased Workload for FEMA, Grantees, and 
Subgrantees; FEMA's Guidance for Direct Administrative Costs Lack 
Clarity and Specificity: 

In November 2007, FEMA implemented a rule change that was intended to 
simplify and clarify the method it uses to reimburse grantees and 
subgrantees for certain costs incurred while administering PA grants. 
FEMA officials and grantees we interviewed were generally satisfied 
with the revised process for claiming and reimbursing management 
costs. However, according to FEMA officials, the 2007 rule change led 
to an unexpectedly high rate of claims for direct administrative 
costs. In addition, the lack of clarity and specificity in FEMA's 
policies and guidance for direct administrative costs has led to 
increased complexity and workload for FEMA, grantees, and subgrantees. 

Management Costs: 

FEMA's 2007 rule was intended to simplify and clarify the method FEMA 
uses to reimburse grantees and subgrantees for certain costs incurred 
while administering PA grants.[Footnote 42] Specifically, the rule 
replaced three funding categories with a management cost funding 
category based on a single percentage of the federal share of 
projected eligible program costs.[Footnote 43] FEMA officials and 
grantees we interviewed reported that they are generally satisfied 
with the process for claiming and reimbursing management costs. 
Specifically, FEMA PA officials we interviewed in 6 of 10 regional 
offices reported that the review process for management costs is very 
efficient or somewhat efficient. Six of 10 grantees we interviewed 
said it was easy or very easy for them to meet FEMA's requirements for 
documenting and claiming management costs. 

According to FEMA officials involved in creating the 2007 rule, the 
management costs rate was intended to cover some of the expenses 
incurred by both grantees and subgrantees of the PA program, but the 
rule was designed to allow grantees flexibility to determine the 
appropriate amount or percentage of management costs to provide, or 
"pass through," to subgrantees. According to FEMA headquarters 
officials and grantees we interviewed, grantees generally do not pass 
through any management costs to subgrantees. For example, none of the 
10 grantees we interviewed said that they had passed through 
management costs to subgrantees for any disaster. Seven of 10 grantees 
we interviewed said that the management costs rate is not enough to 
cover their costs, and 5 of 10 grantees we interviewed cited the lack 
of funds provided by management costs as a reason they do not pass 
through funds to subgrantees. In addition, four grantees said that 
passing through management costs to subgrantees would create 
additional administrative burdens. As the primary recipient of FEMA PA 
grants, grantees are responsible for ensuring that subgrantees 
properly expend and account for the management cost funds. Although 
grantees generally do not pass through management costs, they can 
provide other forms of assistance to subgrantees, such as funding a 
portion of the subgrantee's nonfederal cost share for project costs or 
assisting subgrantees with preparing damage assessments. 

FEMA PA officials stated that the agency is developing proposals for 
modifying the 2007 rule but could not provide information on these 
proposals because they are under internal review. FEMA officials 
stated that the management costs rate for PA is based on an analysis 
of historical obligations of administrative cost reimbursements for 
both grantees and subgrantees. However, a 2011 report by the Homeland 
Security Institute on behalf of FEMA stated that the rate "does not 
adequately address the administrative cost burden incurred by the 
grantee." FEMA officials reported that the agency's review of the 2007 
rule is ongoing and is being used to, among other things, inform 
potential changes to the management costs rate. 

Direct Administrative Costs: 

According to FEMA officials, the 2007 rule led to an unexpectedly high 
rate of claims for direct administrative costs. In contrast to the 
management costs process, FEMA officials, grantees, and subgrantees we 
interviewed said that the use of direct administrative costs 
reimbursement has increased administrative complexity and workload. 
FEMA officials stated that, in developing the 2007 rule, they did not 
anticipate direct administrative costs claims beyond limited, unique 
circumstances, such as paying an environmental specialist to conduct 
an extensive review of a single project. As a result, the 2007 rule 
did not define or include rules on reimbursements for direct 
administrative costs. According to FEMA officials, after the new rule 
was issued, grantees and subgrantees began requesting reimbursements 
for direct administrative costs much more frequently than FEMA 
officials expected. Based on our analysis of FEMA data, for major 
disasters declared during fiscal years 2008 through 2013, FEMA 
processed approximately 170,000 transactions for direct administrative 
costs. 

One potential reason for the increase, according to FEMA officials, is 
that without a pass through of management costs from the grantee, the 
only reimbursement for administrative costs that subgrantees may 
receive is through direct administrative costs. In contrast, prior to 
the 2007 rule, FEMA provided both grantees and subgrantees an 
administrative allowance calculated as a sliding scale percentage of 
net eligible costs of assistance.[Footnote 44] See appendix VIII for 
details on the administrative allowance used prior to the 2007 rule. 

In March 2008, FEMA released Disaster Assistance Policy 9529.9 to 
provide grantees and subgrantees additional guidance on management 
costs and direct administrative costs. The policy defines direct 
administrative costs as costs incurred by a grantee or subgrantee that 
can be identified separately and assigned to a specific project and 
states that, among other things, direct administrative costs would be 
limited to actual reasonable costs incurred for a specific project. 
The policy references Office of Management and Budget (OMB) Circular A-
87, which states that a cost is reasonable if, in its nature and 
amount, it does not exceed that which would be incurred by a prudent 
person under the circumstances prevailing at the time the decision was 
made to incur the cost. The policy further states that FEMA will 
reimburse direct administrative costs that are properly documented. 

FEMA was alerted to concerns with the policies and guidance for direct 
administrative costs within a year of the release of Disaster 
Assistance Policy 9525.9. In March 2009, during the response to record 
flooding in Cedar Rapids, Iowa, the JFO for the disaster and the FEMA 
regional office produced a report that noted potential problems with 
the implementation of direct administrative costs and attempted to 
develop a set of tools and standard operating procedures to assist 
FEMA PA staff with evaluating direct administrative costs submitted 
for projects.[Footnote 45] The report stated that the policy "has 
created an environment where ambiguous project expenses related to 
administrative activities are being submitted for reimbursement to 
FEMA by subgrantees as direct administrative costs." The report 
described the two main contributing factors to this situation as "the 
ambiguity regarding what constitutes a direct administrative cost and 
the lack of concrete, quantifiable guidelines for a 'reasonable' 
direct administrative cost." Figure 6 provides an example of a PA 
project following the Iowa flooding. 

Figure 6: Example of a Subgrantee Project: City of Cedar Rapids, Iowa, 
Paramount Theatre: 

[Refer to PDF for image: 2 photographs] 

Source: City of Cedar Rapids, Iowa. GAO-15-65. 

[End of figure] 

In September 2009, FEMA's Assistant Administrator issued a memorandum 
to the FEMA regional offices with additional guidance on implementing 
the management costs and direct administrative costs 
policies.[Footnote 46] The memorandum states that FEMA staff must 
consider several factors when evaluating the reasonableness of 
contract costs: the method of contracting for the services, the skill 
level of persons performing the activities, the amount of time 
required to perform an activity, and the amount of time required to 
perform a particular task. The memorandum also clarifies that grantees 
and subgrantees may use contractors to perform grant management 
functions. To further assist FEMA staff, the memorandum includes a 
table of PA administrative activities classified as either management 
costs or direct administrative costs. However, the memorandum notes 
that the table is not an exhaustive list and there may be exceptions 
to the categorizations. 

FEMA officials, grantees, and subgrantees we interviewed said that 
FEMA's guidance for direct administrative costs lacks clarity and 
specificity. For example, grantees and subgrantees told us that FEMA's 
policies and guidance for direct administrative costs lack the 
information needed to determine whether a claim is eligible, 
reasonable, and properly documented. Furthermore, FEMA PA officials we 
interviewed said that without clear and specific guidance, they do not 
have sufficient information to evaluate direct administrative costs 
claims, leading to inconsistency in the approval process as well as 
disputes between FEMA and the grantees and subgrantees. 

Perspectives of FEMA PA Officials, Grantees, and Subgrantees: 

Seven of the 10 FEMA PA officials we interviewed at regional offices, 
and 6 of the 10 grantees we interviewed, said that FEMA policies and 
guidance do not provide sufficient instruction for their staff to 
determine whether a claim is eligible. In addition, 9 of 10 FEMA PA 
officials, and 8 of 10 grantees, said that FEMA policies and guidance 
do not provide sufficient instruction for their staff to determine 
whether a claim is reasonable. See figure 7 for FEMA PA officials 
(Branch Chief) responses regarding FEMA polices and guidance related 
to direct administrative costs. 

Figure 7: Perspectives on FEMA's Policies and Guidance for Direct 
Administrative Costs (DAC) - Federal Emergency Management Agency 
(FEMA) Public Assistance (PA) Branch Chiefs or their Designees: 

[Refer to PDF for image: 2 pie-charts] 

In your opinion, do FEMA policies and guidance provide sufficient 
instruction for your staff to determine whether a DAC claim is 
reasonable? 
Yes: 0; 
No: 9; 
Don't know: 1. 

In your opinion, do FEMA policies and guidance provide sufficient 
instruction for your staff to determine whether a DAC claim is 
eligible? 
Yes: 1; 
No: 7; 
Don't know: 2. 

Source: GAO analysis of nongeneralizable interview responses from all 
of FEMA's 10 regional public assistance branch chiefs or designees. 
GAO-15-65. 

[End of figure] 

Figure 8 shows grantee responses regarding FEMA polices and guidance 
related to direct administrative costs. 

Figure 8: Perspectives on FEMA's Policies and Guidance for Direct 
Administrative Costs (DAC) - Grantees: 

[Refer to PDF for image: 2 pie-charts] 

In your opinion, do FEMA policies and guidance provide sufficient 
instruction for a grantee to determine whether its own DAC claim is 
reasonable? 
Yes: 2; 
No: 8. 

In your opinion, do FEMA policies and guidance provide sufficient 
instruction for a grantee to determine which costs are eligible for 
their own DAC claim? 
Yes: 4; 
No: 6. 

Source: GAO analysis of nongeneralizable interview responses from 
grantees of the Public Assistance program. GAO-15-65. 

[End of figure] 

FEMA PA officials from 3 regional offices stated that FEMA currently 
does not have sufficient guidance on what constitutes proper 
supporting documentation for approving or denying a claim for direct 
administrative costs. In addition, two grantees and two subgrantees we 
interviewed reported that it is difficult to know whether they have 
collected sufficient documentation to support their claim. For 
example, one subgrantee we interviewed reported having a direct 
administrative cost claim or estimate approved by FEMA field staff, 
only to have it reduced during a higher-level review. The subgrantee 
told us that this lack of consistency makes it difficult for them to 
budget for their administrative expenses. FEMA PA officials in 
headquarters and in regional offices said that disputes over direct 
administrative cost claims or estimates have led to a more contentious 
environment among FEMA, grantees, and subgrantees. 

According to FEMA PA officials, reviewing and processing direct 
administrative costs reimbursements is labor-intensive and has 
increased the agency's workload. FEMA PA officials from 4 regional 
offices said they spend considerable resources reviewing and 
determining whether direct administrative cost claims meet the 
criteria in FEMA's policies and guidance. For example, for each 
project wherein direct administrative cost are claimed, FEMA officials 
may have to review time keeping, payroll, and travel records as well 
as salary information for all grantee and subgrantee personnel 
assigned to work on a particular project. FEMA PA officials from all 
10 regional offices reported that reviewing a direct administrative 
cost claim can vary from 10 minutes to several weeks or months. 
According to FEMA headquarters officials, the increased workload 
associated with reviewing these claims reduces the amount of FEMA 
staff available for other essential tasks. 

Two-thirds, or 14 of 21, of grantees and subgrantees we interviewed 
stated that the time and resources necessary to document and claim 
direct administrative costs increases their administrative burden. In 
addition, three grantees and two subgrantees we interviewed reported 
that they do not always have the personnel or resources needed to 
track, document, and submit all potential claims. To receive 
reimbursement, grantees and subgrantees must track their time by 
project.[Footnote 47] Although doing so is not required by FEMA, three 
grantees we interviewed said that they track their administrative 
expenses in 15 minute intervals. 

Eight out of 21 grantees and subgrantees reported to us that they have 
employed private contractors to perform grant management functions 
because of the administrative burden and complexity of FEMA's 
reimbursement process. According to FEMA officials, the greater use of 
contractors among grantees and subgrantees has raised the cost to FEMA 
because contractors tend to charge higher hourly rates than state, 
tribal, territorial, and local government officials. However, FEMA 
officials also said that, in some cases, contractors perform grants 
management functions that assist grantees and subgrantees. In 
addition, one grantee we interviewed said that it hired a contractor 
for grants management related to Hurricane Sandy because the 
relatively small number of state personnel available for disaster 
recovery was insufficient given the severity of the damage, which FEMA 
officials estimate may result in as many as 5,100 PA projects. The 
grantee said that the contractor was more effective at seeking 
reimbursement from FEMA than their state or local officials would have 
been, given the contractor's expertise and experience working with 
FEMA. According to the grantee, the contractor has increased the 
amount of funds FEMA obligated to the state. For example, the grantee 
said that the contractor discovered $8 million in eligible funding 
that FEMA PA staff had not included on the approved project worksheet. 
The contractor stated that, in less than 1 year, it had increased the 
amount of FEMA PA funding to the grantee by more than $60 million 
while charging about $10 million for its services. In response to 
these claims, FEMA officials told us that these under-obligated 
projects could have been noticed and corrected during project closeout. 

FEMA headquarters officials we interviewed said that the number of 
appeals related to administrative costs have increased. Under the PA 
program, grantees and subgrantees may appeal any FEMA decision 
regarding eligibility for, or the amount of assistance. From November 
2007 to May 2014, FEMA reported receiving 182 first appeals and 
closing 21 second appeals related to direct administrative costs. 
[Footnote 48] FEMA officials stated that prior to the 2007 rule, there 
were no appeals related to administrative costs and that these new 
claims have increased the agency's administrative burden by pulling 
resources from more pressing areas. Furthermore, the number of both 
first and second appeals is likely understated because many large, 
complex projects have not been completed. One subgrantee told us that 
they chose not to appeal FEMA's decision to reduce their direct 
administrative costs claim, as the appeal process may take months or 
years to resolve and the amount in question was small relative to the 
total project funding. 

As discussed above, FEMA officials and grantees reported that FEMA 
policies and guidance do not provide sufficient instruction to 
determine whether a claim is eligible or reasonable and that 
clarifying such guidance would help to address these issues. In 
addition, without clear and specific guidance on how to evaluate and 
approve or deny direct administrative costs claims, FEMA regional 
officials and field staff must make difficult, subjective 
determinations when evaluating claims. This leads to inconsistent 
application of the direct administrative costs policy and guidance, 
creating confusion and frustration among grantees and subgrantees, and 
leading to additional appeals. OMB's Final Bulletin for Agency Good 
Guidance Practices states that "well designed guidance documents serve 
many critical functions in a regulatory program. Guidance documents, 
used properly, can channel the discretion of agency employees [and] 
increase efficiency," among other things.[Footnote 49] In addition, 
according to FEMA's 2014-2018 Strategic Plan, the agency intends to 
"focus on improving and streamlining community recovery services, 
including grant processing and related interactions" with the goal of 
ensuring that "disaster services are transparent, efficient, and 
effective in meeting the needs of survivors." 

According to FEMA officials, the agency recognizes the unintended 
complexity and additional workload that the 2007 rule created and is 
working to address this issue. For example, FEMA officials told us 
that the agency is considering a pilot program for direct 
administrative costs for the state of New York and select subgrantees 
in the state on certain PA projects. According to FEMA officials, this 
pilot program will be designed specifically for Hurricane Sandy 
recovery operations and may use a sliding-scale or fixed percentage 
administrative allowance, which could reduce the administrative burden 
and complexity associated with the current direct administrative costs 
process because administrative costs will be agreed upon before the 
project begins. In addition, as described earlier in the report, FEMA 
PA officials stated that the agency is developing proposals for 
modifying the November 2007 rule. According to the PA officials, these 
modifications could also change the rules for direct administrative 
costs; however, changes would only affect major disasters declared 
after the release of the new rule. As of April 30, 2014, 516, or 79 
percent, of the 650 disasters declared during fiscal years 2004 
through 2013, have not been completed. Therefore, despite FEMA's 
potential new rule, recovery operations for hundreds of disasters 
could benefit from FEMA officials clarifying the agencies' guidance 
and minimum documentation requirements for direct administrative costs 
claims, which would help FEMA and its grantees better determine 
whether administrative costs are reasonable and potentially help 
reduce complexity in the process. 

Conclusions: 

Major disaster declarations have increased significantly in recent 
decades, and FEMA has obligated $95.2 billion from the DRF for the 650 
major disasters declared during fiscal years 2004 through 2013. FEMA's 
administrative cost percentages have risen for major disasters of all 
sizes, and FEMA has not implemented our 2012 recommendation to 
implement goals for administrative cost percentages and monitor 
performance to achieve these goals. Although FEMA has taken steps to 
better control and reduce its administrative costs since November 
2010, administrative costs have not decreased. Establishing an 
integrated plan that designates an office or senior officials 
responsible for controlling and monitoring administrative costs, 
interim time frames, and milestones would help FEMA to better track 
progress in addressing this longstanding issue and achieving its goals 
to better manage and reduce administrative costs. Without an 
integrated plan, FEMA officials' actions may not be implemented or 
coordinated to ensure they most effectively achieve the agency's 
goals. FEMA would also be better positioned to identify long-terms 
trends in its administrative costs by assessing the costs and benefits 
of tracking and analyzing these costs by individual programs for major 
disasters. Doing so could provide FEMA with information to better 
manage these costs. 

FEMA's 2007 rule was intended to simplify the reimbursement process 
for grantee and subgrantee administrative costs. However, the lack of 
clarity and specificity in FEMA's policies and guidance for direct 
administrative costs has led to increased complexity and workload for 
FEMA, grantees, and subgrantees. Although FEMA was alerted to the 
increased complexity and workload in March 2009, the agency has not 
taken steps to resolve these problems. FEMA officials stated that they 
are considering modifications to the 2007 rule that may include 
changes to direct administrative costs rules and guidance; however, 
these steps will only affect major disasters declared after the 
issuance of the new rule. Seventy-nine percent of the 650 disasters 
declared during fiscal years 2004 through 2013, have not been 
completed. As a result, despite FEMA's potential new rule, recovery 
operations for hundreds of disasters could benefit from FEMA officials 
clarifying the agencies' guidance and minimum documentation 
requirements. These changes would help FEMA and its grantees better 
determine whether administrative costs are reasonable and potentially 
help reduce complexity in the process. 

Recommendations for Executive Action: 

To increase the efficiency and effectiveness of processes related to 
administrative costs for major disasters, we recommend that the FEMA 
Administrator take the following three actions: 

1. Develop an integrated plan to better control and reduce FEMA's 
administrative costs for major disasters. The plan should include 
steps the agency will take to reduce administrative costs, milestones 
for accomplishing the reduction, and clear roles and responsibilities, 
including the assignment of senior officials/offices responsible for 
monitoring and measuring performance. 

2. 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. 

3. Clarify the agency's guidance and minimum documentation 
requirements for direct administrative costs claims by grantees and 
subgrantees of the Public Assistance program. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to DHS for their review and 
comment. DHS provided written comments on November 25, 2014, which are 
summarized below and reproduced in full in appendix IX. DHS concurred 
with all three of our recommendations and described planned actions to 
address them. In addition, DHS provided written technical comments, 
which we incorporated into the report as appropriate. 

DHS concurred with our first recommendation that FEMA develop an 
integrated plan to better control and reduce FEMA's administrative 
costs for major disasters. DHS stated that FEMA has prioritized 
improving administrative cost management and made reducing disaster 
administrative costs a performance goal in its Strategic Plan. 
Additionally, FEMA has developed a standardized definition of 
administrative costs and established a Disaster Administrative Cost 
Integrated Project Team (IPT). The IPT is charged with taking actions 
to institutionalize the new administrative cost definition, scope, and 
posture the agency for improved administrative cost management. FEMA 
plans to complete this effort by September 30, 2015. These actions, if 
implemented effectively, could address our recommendation and help 
control and reduce FEMA's administrative costs. However, the extent to 
which the planned actions will fully address the intent of this 
recommendation will not be known until the agency completes its review 
and implements an integrated plan. 

DHS also concurred with our second recommendation that FEMA assess the 
costs versus the benefits of tracking FEMA's administrative costs data 
for major disasters by Public Assistance, Individual Assistance, 
Hazard Mitigation, and Mission Assignment, and if feasible track this 
information. DHS stated that FEMA is assessing the cost versus the 
benefit of tracking the information by September 30, 2015 to determine 
if this information can be captured and used to inform future decision 
making. 

DHS also concurred with our third recommendation that FEMA clarify its 
guidance and minimum documentation requirements for direct 
administrative costs claims by grantees and subgrantees of the Public 
Assistance program. For future disasters, FEMA is assessing its direct 
administrative cost pilot program for Hurricane Sandy recovery 
operations. If the pilot is successful, results from this pilot could 
inform the development of additional guidance. For current and other 
past disasters, FEMA will provide clarifying guidance on direct 
administrative claims and documentation requirements by October 31, 
2015. We will continue to monitor DHS's efforts. 

We will send copies of this report to the Secretary of Homeland 
Security, the FEMA Administrator, and appropriate congressional 
committees. If you or your staff have any questions about this report, 
please contact me at (404) 679-1875 or curriec@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. Other key contributors to this 
report are listed in appendix X. 

Signed by: 

Chris Currie: 
Director: 
Homeland Security and Justice: 

Congressional Requesters: 

The Honorable Mark Begich: 
Chairman: 
Subcommittee on Emergency Management, Intergovernmental Relations, and 
the District of Columbia: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Tom Coburn, M.D.
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Michael T. McCaul: 
Chairman: 
Committee on Homeland Security: 
House of Representatives: 

The Honorable Susan W. Brooks: 
Chairman: 
House Subcommittee on Emergency Preparedness, Response, and 
Communications: 
Committee on Homeland Security: 
House of Representatives: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This report addresses the following questions: (1) To what extent were 
disaster relief funds (DRF) obligated to cover the Federal Emergency 
Management Agency's (FEMA) administrative costs for major disasters 
during fiscal years 2004 through 2013, and what steps, if any, has 
FEMA taken to control its administrative costs, and (2) To what extent 
were DRF funds obligated to cover grantee and subgrantee 
administrative costs for Public Assistance (PA) grants, and what has 
been the impact of FEMA's November 2007 regulatory changes on 
administrative costs reimbursed to grantees and subgrantees for the PA 
program. 

To address our first objective, we obtained and analyzed data from 
FEMA's Integrated Financial Management Information System (IFMIS) on 
the amount of DRF obligations for administrative costs to FEMA for 
each major disaster declared by the President during fiscal years 1989 
through 2013. We focused on this time frame because it contains 
current data for major disasters. It also comprises the time period 
after FEMA was merged into the newly created DHS, on March 1, 2003, 
and predates Hurricane Katrina in 2005. Fiscal year 1989 is the 
earliest year for which FEMA maintains obligations data. We focused 
primarily on fiscal years 2004 through 2013; however, to provide 
historical context and to compare results across similar periods, we 
also reviewed obligations data during fiscal years 1989 through 2013. 
To determine FEMA's administrative cost percentages for disaster 
declarations, we obtained actual and projected DRF obligations for all 
1,332 major disasters declared during fiscal years 1989 through 2013. 
To assess FEMA's current practices, we compared FEMA's administrative 
cost percentages for disasters declared during fiscal years 2004 
through 2013 with FEMA's target ranges for administrative cost 
percentages. Specifically, we calculated the percentage of total 
federal assistance that was obligated for administrative costs for 
each disaster in our scope. Next we determined whether these 
percentages were above or below FEMA's administrative cost targets and 
whether FEMA's administrative costs would have changed during the 
period had FEMA met the targets. To identify potential trends over 
time, we compared FEMA's administrative cost percentages during fiscal 
years 1989 through 1998 with FEMA's administrative cost percentages 
during fiscal years 2004 through 2013. According to FEMA officials, 
administrative costs are typically higher in the early months of a 
declaration, typically decreasing as the declaration matures (that is, 
as labor-intensive response activities decline). In order to ensure 
the results of our analyses were not skewed by major disasters that 
had not yet matured and whose administrative costs were high, we 
analyzed actual administrative costs for disaster declarations that 
were closed as of April 30, 2014. For declarations that were still 
open as of April 30, 2014, we analyzed actual obligations as of April 
30, 2014, plus the amount that FEMA projected to obligate in the 
future until the declarations are eventually closed. To determine 
whether the IFMIS data were reliable, we reviewed the data that FEMA 
officials provided, discussed data quality control procedures with 
relevant FEMA officials, and reviewed documentation such as DHS audits 
that included IFMIS to ensure the integrity of the data. We determined 
that the IFMIS DRF data were sufficiently reliable for the purposes of 
this report. 

In addition, we obtained and analyzed FEMA policies, procedures, and 
guidance specific to FEMA's administrative costs. We obtained FEMA's 
Financial Information Tool for a small and large disaster to better 
understand FEMA's categories of administrative costs. 

To determine what actions, if any, FEMA is taking to reduce the costs 
of delivering disaster assistance, we interviewed officials from 
FEMA's Office of Chief Financial Officer and obtained and analyzed 
documentation to determine what, if any, internal standards FEMA 
utilizes to determine the reasonableness of its administrative costs 
and whether FEMA implemented administrative cost goals and tracks 
performance against the goals. We also interviewed three Federal 
Coordinating Officers to determine their ability to control costs and 
the respective outcomes. We also obtained and analyzed FEMA policies, 
procedures, and guidance specific to administrative costs, such as its 
guidance on costs to federal coordinating officers, FEMA's Strategic 
Plans, and its Financial Management Code guide. We evaluated them 
using Standards for Internal Control in the Federal Government and 
project management guidance.[Footnote 50] We compared the intent of 
the criteria against FEMA's policies/practices to control 
administrative costs, and determine the extent FEMA is meeting the 
intent of the criteria. 

To address our second objective, we obtained and analyzed data on DRF 
obligations to state and local governments for PA-related 
administrative costs for all major disasters declared by the President 
during fiscal years 2004 through 2013. Further, we calculated the 
dollar amount and percentage for each fiscal year in our scope to 
determine whether administrative costs increased or decreased during 
the period. We reviewed and analyzed FEMA policies, procedures, and 
guidance specific to state and local administrative costs, such as its 
Disaster Assistance Policy and associated memorandum and evaluated 
them using practices for good guidance.[Footnote 51] We analyzed 
administrative cost data from three of FEMA's information technology 
systems that track financial data for disasters. We selected example 
transactions and obtained supporting documentation to better 
understand the types of administrative costs associated with major 
disaster declarations. 

To assess the impact of FEMA's 2007 Management Costs interim final 
rule on administrative costs, we interviewed with the following FEMA 
regional officials and officials from selected states and localities 
either in-person or by teleconference within each region: 

* Public Assistance Branch Chief or their designee in each of FEMA's 
10 regional offices. We visited three FEMA regions: 

- Region II, located in New York, New York, which represents a large 
recent catastrophic disaster; 

- Region IV located in Atlanta, Georgia, which represents all sizes of 
disasters (including catastrophic), has frequent disasters, and has a 
range of disaster types; and: 

- Region VII, located in Kansas City, Missouri, which represents many 
sizes of disasters, a frequent disaster area--a total of 84 out of 650 
disasters in the past 10 fiscal years (2004 through 2013) --and a 
range of disaster types. 

* State emergency management officials from 10 select states 
(grantees) who work in their states' recovery offices and with FEMA on 
public assistance projects. Located in the three regions selected 
above.[Footnote 52] 

* Local officials (subgrantees) from 11 select localities that 
received or will receive FEMA PA assistance from the 10 select states. 
[Footnote 53] 

* Senior FEMA officials from the Louisiana Recovery Office and the 
Sandy New Jersey and New York Recovery Offices. These offices are 
responsible a large number of public assistance projects. 

From these interviews, we obtained information on administrative costs 
reimbursed to grantees and subgrantees through the PA program, 
including section 324 management costs (management costs) and direct 
administrative costs. The information obtained from these states and 
localities cannot be generalized across all states and tribal nations. 
However, the information obtained from these states and localities 
provides a broad understanding of the issues grantees and subgrantees 
encounter during the disaster recovery process. 

In addition, to assess the effects of FEMA's interim rule: 

* We interviewed officials from three private sector companies from 
three of the select states that provide services to the states and 
localities in documenting and claiming administrative costs.[Footnote 
54] 

* We also reviewed first and second appeals related to direct 
administrative costs filed by grantees and subgrantees since FEMA 
implemented its 2007 Management Costs interim final rule. The second 
appeals information was centrally maintained by FEMA headquarters and 
posted on its webpage. We also inquired about appeals related to 
management costs and direct administrative costs during our regional 
interviews. 

We conducted this performance audit from November 2013 to December 
2014 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. 

[End of section] 

Appendix II: GAO Analyses of the Number of Disaster Declarations and 
Amount of Obligations: 

Fifty-seven jurisdictions received major disaster declarations during 
fiscal years 2004 through 2013. Oklahoma had the most, with 29 
declarations, while Guam had 1. Table 7 identifies the number of 
disaster declarations for all jurisdictions during fiscal years 2004 
through 2013. 

Table 7: Number of Disaster Declarations during Fiscal Years 2004 
through 2013 by Jurisdiction: 

Rank: 1; 
Jurisdiction: Oklahoma; 
Region: 6; 
Number of major disaster declarations: 29. 

Rank: 2; 
Jurisdiction: Kansas; 
Region: 7; 
Number of major disaster declarations: 23. 

Rank: 3; 
Jurisdiction: Missouri; 
Region: 7; 
Number of major disaster declarations: 23. 

Rank: 4; 
Jurisdiction: New York; 
Region: 2; 
Number of major disaster declarations: 22. 

Rank: 5; 
Jurisdiction: South Dakota; 
Region: 8; 
Number of major disaster declarations: 20. 

Rank: 6; 
Jurisdiction: Iowa; 
Region: 7; 
Number of major disaster declarations: 19. 

Rank: 7; 
Jurisdiction: Nebraska; 
Region: 7; 
Number of major disaster declarations: 19. 

Rank: 8; 
Jurisdiction: Arkansas; 
Region: 6; 
Number of major disaster declarations: 18. 

Rank: 9; 
Jurisdiction: North Dakota; 
Region: 8; 
Number of major disaster declarations: 17. 

Rank: 10; 
Jurisdiction: West Virginia; 
Region: 3; 
Number of major disaster declarations: 17. 

Rank: 11; 
Jurisdiction: Florida; 
Region: 4; 
Number of major disaster declarations: 16. 

Rank: 12; 
Jurisdiction: Kentucky; 
Region: 4; 
Number of major disaster declarations: 16. 

Rank: 13; 
Jurisdiction: New Hampshire; 
Region: 1; 
Number of major disaster declarations: 16. 

Rank: 14; 
Jurisdiction: New Jersey; 
Region: 2; 
Number of major disaster declarations: 16. 

Rank: 15; 
Jurisdiction: Alaska; 
Region: 10; 
Number of major disaster declarations: 15. 

Rank: 16; 
Jurisdiction: Alabama; 
Region: 4; 
Number of major disaster declarations: 15. 

Rank: 17; 
Jurisdiction: California; 
Region: 9; 
Number of major disaster declarations: 15. 

Rank: 18; 
Jurisdiction: Maine; 
Region: 1; 
Number of major disaster declarations: 15. 

Rank: 19; 
Jurisdiction: Minnesota; 
Region: 5; 
Number of major disaster declarations: 15. 

Rank: 20; 
Jurisdiction: Tennessee; 
Region: 4; 
Number of major disaster declarations: 15. 

Rank: 21; 
Jurisdiction: Vermont; 
Region: 1; 
Number of major disaster declarations: 15. 

Rank: 22; 
Jurisdiction: Illinois; 
Region: 5; 
Number of major disaster declarations: 14. 

Rank: 23; 
Jurisdiction: Louisiana; 
Region: 6; 
Number of major disaster declarations: 14. 

Rank: 24; 
Jurisdiction: Virginia; 
Region: 3; 
Number of major disaster declarations: 14. 

Rank: 25; 
Jurisdiction: Indiana; 
Region: 5; 
Number of major disaster declarations: 13. 

Rank: 26; 
Jurisdiction: Mississippi; 
Region: 4; 
Number of major disaster declarations: 13. 

Rank: 27; 
Jurisdiction: Massachusetts; 
Region: 1; 
Number of major disaster declarations: 12. 

Rank: 28; 
Jurisdiction: Texas; 
Region: 6; 
Number of major disaster declarations: 12. 

Rank: 29; 
Jurisdiction: Ohio; 
Region: 5; 
Number of major disaster declarations: 11. 

Rank: 30; 
Jurisdiction: Pennsylvania; 
Region: 3; 
Number of major disaster declarations: 11. 

Rank: 31; 
Jurisdiction: North Carolina; 
Region: 4; 
Number of major disaster declarations: 10. 

Rank: 32; 
Jurisdiction: New Mexico; 
Region: 6; 
Number of major disaster declarations: 10. 

Rank: 33; 
Jurisdiction: Washington; 
Region: 10; 
Number of major disaster declarations: 10. 

Rank: 34; 
Jurisdiction: Oregon; 
Region: 10; 
Number of major disaster declarations: 9. 

Rank: 35; 
Jurisdiction: Puerto Rico; 
Region: 2; 
Number of major disaster declarations: 9. 

Rank: 36; 
Jurisdiction: Connecticut; 
Region: 1; 
Number of major disaster declarations: 8. 

Rank: 37; 
Jurisdiction: Georgia; 
Region: 4; 
Number of major disaster declarations: 8. 

Rank: 38; 
Jurisdiction: Wisconsin; 
Region: 5; 
Number of major disaster declarations: 8. 

Rank: 39; 
Jurisdiction: Arizona; 
Region: 9; 
Number of major disaster declarations: 7. 

Rank: 40; 
Jurisdiction: Hawaii; 
Region: 9; 
Number of major disaster declarations: 7. 

Rank: 41; 
Jurisdiction: Maryland; 
Region: 3; 
Number of major disaster declarations: 7. 

Rank: 42; 
Jurisdiction: District of Columbia; 
Region: 3; 
Number of major disaster declarations: 6. 

Rank: 43; 
Jurisdiction: Utah; 
Region: 8; 
Number of major disaster declarations: 6. 

Rank: 44; 
Jurisdiction: Virgin Islands; 
Region: 2; 
Number of major disaster declarations: 6. 

Rank: 45; 
Jurisdiction: Colorado; 
Region: 8; 
Number of major disaster declarations: 5. 

Rank: 46; 
Jurisdiction: Delaware; 
Region: 3; 
Number of major disaster declarations: 5. 

Rank: 47; 
Jurisdiction: Idaho; 
Region: 10; 
Number of major disaster declarations: 5. 

Rank: 48; 
Jurisdiction: Montana; 
Region: 8; 
Number of major disaster declarations: 5. 

Rank: 49; 
Jurisdiction: Rhode Island; 
Region: 1; 
Number of major disaster declarations: 5. 

Rank: 50; 
Jurisdiction: South Carolina; 
Region: 4; 
Number of major disaster declarations: 5. 

Rank: 51; 
Jurisdiction: Nevada; 
Region: 9; 
Number of major disaster declarations: 4. 

Rank: 52; 
Jurisdiction: American Samoa; 
Region: 9; 
Number of major disaster declarations: 3. 

Rank: 53; 
Jurisdiction: Michigan; 
Region: 5; 
Number of major disaster declarations: 3. 

Rank: 54; 
Jurisdiction: Northern Mariana Islands; 
Region: 9; 
Number of major disaster declarations: 3. 

Rank: 55; 
Jurisdiction: Wyoming; 
Region: 8; 
Number of major disaster declarations: 3. 

Rank: 56; 
Jurisdiction: Federated States of Micronesia; 
Region: 9; 
Number of major disaster declarations: 2. 

Rank: 57; 
Jurisdiction: Guam; 
Region: 9; 
Number of major disaster declarations: 1. 

Rank: 58; 
Jurisdiction: Marshall Islands; 
Region: 9; 
Number of major disaster declarations: 0. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

[End of table] 

The Federal Emergency Management Agency (FEMA) obligates funds from 
the Disaster Relief Fund to help jurisdictions respond to and recover 
from declared disasters. FEMA classifies these funds into five 
categories: Public Assistance, Individual Assistance, Hazard 
Mitigation, Mission Assignments, and Administrative Costs. Table 8 
shows the obligations for each category by jurisdiction. 

Table 8: Total Obligations for Major Disasters Declared during Fiscal 
Years 2004 through 2013, by Jurisdiction, as of April 30, 2014: 

Dollars in millions: 

Rank: 1; 
Jurisdiction: Louisiana; 
Public Assistance: $14,966; 
Individual Assistance: $11,493; 
Mission Assignment: $2,748; 
Hazard Mitigation: $1,420; 
Federal Emergency Management Agency Administrative Costs: $3,847; 
Total obligations: $34,474. 

Rank: 2; 
Jurisdiction: Mississippi; 
Public Assistance: $3,593; 
Individual Assistance: $3,129; 
Mission Assignment: $1,203; 
Hazard Mitigation: $335; 
Federal Emergency Management Agency Administrative Costs: $2,157; 
Total obligations: $10,417. 

Rank: 3; 
Jurisdiction: Florida; 
Public Assistance: $4,913; 
Individual Assistance: $2,229; 
Mission Assignment: $844; 
Hazard Mitigation: $559; 
Federal Emergency Management Agency Administrative Costs: $1,176; 
Total obligations: $9,720. 

Rank: 4; 
Jurisdiction: New York; 
Public Assistance: $4,320; 
Individual Assistance: $1,526; 
Mission Assignment: $327; 
Hazard Mitigation: $168; 
Federal Emergency Management Agency Administrative Costs: $708; 
Total obligations: $7,050. 

Rank: 5; 
Jurisdiction: Texas; 
Public Assistance: $3,056; 
Individual Assistance: $1,838; 
Mission Assignment: $279; 
Hazard Mitigation: $503; 
Federal Emergency Management Agency Administrative Costs: $1,099; 
Total obligations: $6,776. 

Rank: 6; 
Jurisdiction: New Jersey; 
Public Assistance: $1,554; 
Individual Assistance: $768; 
Mission Assignment: $49; 
Hazard Mitigation: $176; 
Federal Emergency Management Agency Administrative Costs: $369; 
Total obligations: $2,915. 

Rank: 7; 
Jurisdiction: Alabama; 
Public Assistance: $691; 
Individual Assistance: $912; 
Mission Assignment: $356; 
Hazard Mitigation: $180; 
Federal Emergency Management Agency Administrative Costs: $423; 
Total obligations: $2,562. 

Rank: 8; 
Jurisdiction: Iowa; 
Public Assistance: $1,696; 
Individual Assistance: $226; 
Mission Assignment: $9; 
Hazard Mitigation: $383; 
Federal Emergency Management Agency Administrative Costs: $192; 
Total obligations: $2,506. 

Rank: 9; 
Jurisdiction: California; 
Public Assistance: $1,071; 
Individual Assistance: $112; 
Mission Assignment: $4; 
Hazard Mitigation: $104; 
Federal Emergency Management Agency Administrative Costs: $126; 
Total obligations: $1,418. 

Rank: 10; 
Jurisdiction: Missouri; 
Public Assistance: $703; 
Individual Assistance: $115; 
Mission Assignment: $122; 
Hazard Mitigation: $156; 
Federal Emergency Management Agency Administrative Costs: $163; 
Total obligations: $1,259. 

Rank: 11; 
Jurisdiction: Kansas; 
Public Assistance: $908; 
Individual Assistance: $88; 
Mission Assignment: $4; 
Hazard Mitigation: $96; 
Federal Emergency Management Agency Administrative Costs: $74; 
Total obligations: $1,170. 

Rank: 12; 
Jurisdiction: Illinois; 
Public Assistance: $279; 
Individual Assistance: $652; 
Mission Assignment: $3; 
Hazard Mitigation: $76; 
Federal Emergency Management Agency Administrative Costs: $157; 
Total obligations: $1,167. 

Rank: 13; 
Jurisdiction: North Dakota; 
Public Assistance: $518; 
Individual Assistance: $208; 
Mission Assignment: $76; 
Hazard Mitigation: $63; 
Federal Emergency Management Agency Administrative Costs: $145; 
Total obligations: $1,010. 

Rank: 14; 
Jurisdiction: Pennsylvania; 
Public Assistance: $461; 
Individual Assistance: $299; 
Mission Assignment: $9; 
Hazard Mitigation: $72; 
Federal Emergency Management Agency Administrative Costs: $119; 
Total obligations: $960. 

Rank: 15; 
Jurisdiction: Puerto Rico; 
Public Assistance: $174; 
Individual Assistance: $479; 
Mission Assignment: $9; 
Hazard Mitigation: $33; 
Federal Emergency Management Agency Administrative Costs: $108; 
Total obligations: $804. 

Rank: 16; 
Jurisdiction: Tennessee; 
Public Assistance: $344; 
Individual Assistance: $204; 
Mission Assignment: $2; 
Hazard Mitigation: $104; 
Federal Emergency Management Agency Administrative Costs: $127; 
Total obligations: $780. 

Rank: 17; 
Jurisdiction: Oklahoma; 
Public Assistance: $516; 
Individual Assistance: $63; 
Mission Assignment: $1; 
Hazard Mitigation: $57; 
Federal Emergency Management Agency Administrative Costs: $121; 
Total obligations: $759. 

Rank: 18; 
Jurisdiction: Kentucky; 
Public Assistance: $420; 
Individual Assistance: $115; 
Mission Assignment: $2; 
Hazard Mitigation: $72; 
Federal Emergency Management Agency Administrative Costs: $123; 
Total obligations: $731. 

Rank: 19; 
Jurisdiction: Arkansas; 
Public Assistance: $416; 
Individual Assistance: $52; 
Mission Assignment: $3; 
Hazard Mitigation: $62; 
Federal Emergency Management Agency Administrative Costs: $86; 
Total obligations: $620. 

Rank: 20; 
Jurisdiction: Massachusetts; 
Public Assistance: $325; 
Individual Assistance: $99; 
Mission Assignment: $1; 
Hazard Mitigation: $31; 
Federal Emergency Management Agency Administrative Costs: $76; 
Total obligations: $532. 

Rank: 21; 
Jurisdiction: Indiana; 
Public Assistance: $219; 
Individual Assistance: $143; 
Mission Assignment: $3; 
Hazard Mitigation: $43; 
Federal Emergency Management Agency Administrative Costs: $72; 
Total obligations: $480. 

Rank: 22; 
Jurisdiction: Nebraska; 
Public Assistance: $374; 
Individual Assistance: $8; 
Mission Assignment: $a; 
Hazard Mitigation: $37; 
Federal Emergency Management Agency Administrative Costs: $45; 
Total obligations: $463. 

Rank: 23; 
Jurisdiction: Ohio; 
Public Assistance: $281; 
Individual Assistance: $92; 
Mission Assignment: $1; 
Hazard Mitigation: $32; 
Federal Emergency Management Agency Administrative Costs: $53; 
Total obligations: $459. 

Rank: 24; 
Jurisdiction: Georgia; 
Public Assistance: $208; 
Individual Assistance: $80; 
Mission Assignment: $1; 
Hazard Mitigation: $61; 
Federal Emergency Management Agency Administrative Costs: $95; 
Total obligations: $444. 

Rank: 25; 
Jurisdiction: North Carolina; 
Public Assistance: $209; 
Individual Assistance: $97; 
Mission Assignment: $1; 
Hazard Mitigation: $32; 
Federal Emergency Management Agency Administrative Costs: $80; 
Total obligations: $418. 

Rank: 26; 
Jurisdiction: Washington; 
Public Assistance: $260; 
Individual Assistance: $43; 
Mission Assignment: $a ; 
Hazard Mitigation: $44; 
Federal Emergency Management Agency Administrative Costs: $67; 
Total obligations: $415. 

Rank: 27; 
Jurisdiction: West Virginia; 
Public Assistance: $149; 
Individual Assistance: $124; 
Mission Assignment: $14; 
Hazard Mitigation: $22; 
Federal Emergency Management Agency Administrative Costs: $77; 
Total obligations: $387. 

Rank: 28; 
Jurisdiction: Colorado; 
Public Assistance: $130; 
Individual Assistance: $143; 
Mission Assignment: $8; 
Hazard Mitigation: $4; 
Federal Emergency Management Agency Administrative Costs: $99; 
Total obligations: $385. 

Rank: 29; 
Jurisdiction: Vermont; 
Public Assistance: $274; 
Individual Assistance: $31; 
Mission Assignment: $a; 
Hazard Mitigation: $22; 
Federal Emergency Management Agency Administrative Costs: $57; 
Total obligations: $385. 

Rank: 30; 
Jurisdiction: Minnesota; 
Public Assistance: $251; 
Individual Assistance: $38; 
Mission Assignment: $3; 
Hazard Mitigation: $22; 
Federal Emergency Management Agency Administrative Costs: $57; 
Total obligations: $371. 

Rank: 31; 
Jurisdiction: Connecticut; 
Public Assistance: $243; 
Individual Assistance: $35; 
Mission Assignment: $1; 
Hazard Mitigation: $17; 
Federal Emergency Management Agency Administrative Costs: $70; 
Total obligations: $366. 

Rank: 32; 
Jurisdiction: Virginia; 
Public Assistance: $266; 
Individual Assistance: $31; 
Mission Assignment: $a; 
Hazard Mitigation: $23; 
Federal Emergency Management Agency Administrative Costs: $37; 
Total obligations: $357. 

Rank: 33; 
Jurisdiction: Wisconsin; 
Public Assistance: $115; 
Individual Assistance: $138; 
Mission Assignment: $a; 
Hazard Mitigation: $40; 
Federal Emergency Management Agency Administrative Costs: $55; 
Total obligations: $349. 

Rank: 34; 
Jurisdiction: South Dakota; 
Public Assistance: $207; 
Individual Assistance: $13; 
Mission Assignment: $1; 
Hazard Mitigation: $28; 
Federal Emergency Management Agency Administrative Costs: $55; 
Total obligations: $303. 

Rank: 35; 
Jurisdiction: American Samoa; 
Public Assistance: $102; 
Individual Assistance: $66; 
Mission Assignment: $9; 
Hazard Mitigation: $7; 
Federal Emergency Management Agency Administrative Costs: $64; 
Total obligations: $248. 

Rank: 36; 
Jurisdiction: Maryland; 
Public Assistance: $166; 
Individual Assistance: $3; 
Mission Assignment: $0; 
Hazard Mitigation: $16; 
Federal Emergency Management Agency Administrative Costs: $17; 
Total obligations: $201. 

Rank: 37; 
Jurisdiction: Oregon; 
Public Assistance: $122; 
Individual Assistance: $9; 
Mission Assignment: $0; 
Hazard Mitigation: $26; 
Federal Emergency Management Agency Administrative Costs: $30; 
Total obligations: $188. 

Rank: 38; 
Jurisdiction: New Hampshire; 
Public Assistance: $121; 
Individual Assistance: $15; 
Mission Assignment: $ a; 
Hazard Mitigation: $14; 
Federal Emergency Management Agency Administrative Costs: $33; 
Total obligations: $183. 

Rank: 39; 
Jurisdiction: Alaska; 
Public Assistance: $103; 
Individual Assistance: $10; 
Mission Assignment: $3; 
Hazard Mitigation: $10; 
Federal Emergency Management Agency Administrative Costs: $54; 
Total obligations: $180. 

Rank: 40; 
Jurisdiction: New Mexico; 
Public Assistance: $95; 
Individual Assistance: $7; 
Mission Assignment: $0; 
Hazard Mitigation: $2; 
Federal Emergency Management Agency Administrative Costs: $27; 
Total obligations: $131. 

Rank: 41; 
Jurisdiction: Rhode Island; 
Public Assistance: $46; 
Individual Assistance: $42; 
Mission Assignment: $a; 
Hazard Mitigation: $8; 
Federal Emergency Management Agency Administrative Costs: $25; 
Total obligations: $122. 

Rank: 42; 
Jurisdiction: Maine; 
Public Assistance: $77; 
Individual Assistance: $4; 
Mission Assignment: $a; 
Hazard Mitigation: $6; 
Federal Emergency Management Agency Administrative Costs: $23; 
Total obligations: $111. 

Rank: 43; 
Jurisdiction: Hawaii; 
Public Assistance: $62; 
Individual Assistance: $16; 
Mission Assignment: $a; 
Hazard Mitigation: $5; 
Federal Emergency Management Agency Administrative Costs: $18; 
Total obligations: $101. 

Rank: 44; 
Jurisdiction: Montana; 
Public Assistance: $58; 
Individual Assistance: $7; 
Mission Assignment: $0; 
Hazard Mitigation: $5; 
Federal Emergency Management Agency Administrative Costs: $20; 
Total obligations: $91. 

Rank: 45; 
Jurisdiction: Michigan; 
Public Assistance: $20; 
Individual Assistance: $45; 
Mission Assignment: $0; 
Hazard Mitigation: $3; 
Federal Emergency Management Agency Administrative Costs: $12; 
Total obligations: $81. 

Rank: 46; 
Jurisdiction: South Carolina; 
Public Assistance: $43; 
Individual Assistance: $8; 
Mission Assignment: $0; 
Hazard Mitigation: $3; 
Federal Emergency Management Agency Administrative Costs: $7; 
Total obligations: $61. 

Rank: 47; 
Jurisdiction: Arizona; 
Public Assistance: $44; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $4; 
Federal Emergency Management Agency Administrative Costs: $10; 
Total obligations: $57. 

Rank: 48; 
Jurisdiction: Utah; 
Public Assistance: $32; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $4; 
Federal Emergency Management Agency Administrative Costs: $8; 
Total obligations: $45. 

Rank: 49; 
Jurisdiction: Federated States of Micronesia; 
Public Assistance: $15; 
Individual Assistance: $8; 
Mission Assignment: $ [A]; 
Hazard Mitigation: $1; 
Federal Emergency Management Agency Administrative Costs: $8; 
Total obligations: $32. 

Rank: 50; 
Jurisdiction: Northern Mariana Islands; 
Public Assistance: $9; 
Individual Assistance: $14; 
Mission Assignment: $0; 
Hazard Mitigation: $2; 
Federal Emergency Management Agency Administrative Costs: $6; 
Total obligations: $31. 

Rank: 51; 
Jurisdiction: Nevada; 
Public Assistance: $20; 
Individual Assistance: $2; 
Mission Assignment: $a; 
Hazard Mitigation: $2; 
Federal Emergency Management Agency Administrative Costs: $5; 
Total obligations: $29. 

Rank: 52; 
Jurisdiction: Virgin Islands; 
Public Assistance: $18; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $2; 
Federal Emergency Management Agency Administrative Costs: $8; 
Total obligations: $29. 

Rank: 53; 
Jurisdiction: District of Columbia; 
Public Assistance: $24; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $0; 
Federal Emergency Management Agency Administrative Costs: $2; 
Total obligations: $26. 

Rank: 54; 
Jurisdiction: Delaware; 
Public Assistance: $19; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $1; 
Federal Emergency Management Agency Administrative Costs: $2; 
Total obligations: $22. 

Rank: 55; 
Jurisdiction: Idaho; 
Public Assistance: $10; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $1; 
Federal Emergency Management Agency Administrative Costs: $5; 
Total obligations: $16. 

Rank: 56; 
Jurisdiction: Wyoming; 
Public Assistance: $8; 
Individual Assistance: $3; 
Mission Assignment: $0; 
Hazard Mitigation: $ a; 
Federal Emergency Management Agency Administrative Costs: $3; 
Total obligations: $15. 

Rank: 57; 
Jurisdiction: Guam; 
Public Assistance: $1; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $0; 
Federal Emergency Management Agency Administrative Costs: $1; 
Total obligations: $2. 

Rank: 58; 
Jurisdiction: Marshall Islands; 
Public Assistance: $0; 
Individual Assistance: $0; 
Mission Assignment: $0; 
Hazard Mitigation: $0; 
Federal Emergency Management Agency Administrative Costs: $0; 
Total obligations: $0. 

Total: 
Public Assistance: $45,327; 
Individual Assistance: $25,887; 
Mission Assignment: $6,093; 
Hazard Mitigation: $5,200; 
Federal Emergency Management Agency Administrative Costs: $12,706; 
Total obligations: $95,213. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65: 

Note: This table provides actual obligations from the Disaster Relief 
Fund as of April 30, 2014. Obligation amounts may not add up to total 
obligations due to rounding. 

[A] Obligations less than $0.5 million. 

[End of table] 

Appendix III: Federal Emergency Management Agency (FEMA) 
Administrative Cost Categories: 

This appendix provides a definition of each of FEMA's cost categories 
for its administrative costs. The cost categories within the table 
below comprised FEMA's administrative costs during the period of our 
review--fiscal years 2004 through 2013. However, according to FEMA 
officials, in October 2014 the agency changed the cost categories that 
comprise administrative costs--for example, the urban search and 
rescue cost category is no longer included in administrative costs. 

Administrative cost category: Salaries and Benefits; 
Definition: Includes gross compensation (before tax and other 
deductions) directly related to duties performed for the government by 
federal civilian employees, military personnel, and nonfederal 
personnel. This covers: additional compensation such as hazardous 
duty, night differential, holiday, standby, and overtime pay, cost-of-
living allowance (COLA), and post differential; 
salaries for casual workers; 
payments to other agencies on reimbursable details; 
re-employed annuitants and rewards for information. 

Administrative cost category: Travel; 
Definition: Includes travel and transportation costs of government 
employees and other persons while in an authorized travel status, that 
are to be paid by the government either directly or by reimbursing the 
traveler. Costs of both travel away from official stations, subject to 
regulations governing civilian travel, and local travel and 
transportation of persons in and around the official station of an 
employee, rental or lease of vehicles for transportation of government 
employees or others necessary to carry out a disaster operation or 
related activities, rental or lease of vehicles from interagency 
motorpools (disaster-related or not), subsistence for travelers and 
reimbursement of actual expenses, and incidental expenses related to 
official travel, such as baggage transfer, telephone and telegraph 
expenses, fees for purchasing passports, travel checks, and use of 
Automatic Teller Machines (ATMs). 

Administrative cost category: Transportation; 
Definition: Includes contractual obligations incurred for the 
transportation of things (animals included), for the care of such 
things while in process of being transported, and for other services 
incident to the transportation of things (e.g., lifts) by freight and 
express carriers. Includes rental of transportation equipment, such as 
U-Haul or Ryder trucks. Excludes transportation paid by a vendor for 
commodities purchased by government. 

Administrative cost category: Rent, Communications, and Utilities; 
Definition: Includes payments for the use of property owned by others 
and charges for communication and utility services. Excludes payments 
for rental of transportation equipment. 

Administrative cost category: Printing and Reproduction; 
Definition: Includes printing and duplicating, quick copy services, 
photostats, blueprints, photography, microfilming, and advertising 
performed by contractors, the Government Printing Office, other 
government agencies or units, or commercial printers and 
photographers. Includes all common processes of duplicating obtained 
on a contractual or reimbursable basis. Includes publication of 
notices, advertising, radio and television time, when done by 
contract. Also includes standard forms when specially printed or 
assembled to order and printed envelopes and letterheads. 

Administrative cost category: Mission Assignment--Federal Operations 
Support; 
Definition: Includes personnel, equipment, and supplies for a mission 
assignment to another federal agency to provide administrative and 
logistical support to begin and maintain disaster operations. Excludes 
rental or lease of vehicles and activities performed by contractors. 

Administrative cost category: Other Services; 
Definition: Includes advisory and assistance services contractors, 
purchases of goods and services from government accounts, operation 
and maintenance of facilities and equipment, medical care, research 
and development contracts, subsistence and support of persons, and 
services not otherwise classified. 

Administrative cost category: Supplies and Materials; 
Definition: Includes commodities that are (1) ordinarily consumed or 
expended within 1 year after use, (2) converted in the process of 
construction or manufacture, or (3) used to form a minor part of 
equipment or fixed property, up to a cost of $25,000. 

Administrative cost category: Equipment; 
Definition: Includes the purchase of personal property that may 
normally be expected to have a period of service for a year or more 
after being put in use without material impairment of its physical 
condition or functional capacity. 

Administrative cost category: Land and Structures; 
Definition: Includes purchase and improvement of land, buildings and 
other structures, non-structural improvements, and fixed equipment 
acquired under contract. 

Administrative cost category: Urban Search and Rescue; 
Definition: Includes deployment of Urban Search and Rescue teams to 
stage for or respond to disasters. 

Administrative cost category: Interest and Dividends; 
Definition: Includes payments to creditors for the use of moneys 
loaned, deposited, overpaid, or otherwise made available; 
the distribution of earnings to owners of trust or other funds, and 
interest payments under lease-purchase contracts for construction of 
buildings. Excludes the interest portion of the payment of claims when 
a contract has been delayed by the government. 

Administrative cost category: Refunds; 
Definition: Includes payments of amounts previously collected by the 
government. Includes payments (1) to correct errors in computations, 
erroneous billing, and other factors and (2) to former employees or 
their beneficiaries for employee contributions to retirement and 
disability funds. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
information. GAO-15-65. 

[End of table] 

[End of section] 

Appendix IV: The Federal Emergency Management Agency's (FEMA) Public 
Assistance (PA) Process, Project Categorization, and Direct 
Administrative Costs: 

FEMA generally defines a project as a logical grouping of work that 
will be funded as a unit. Under this definition, a project may cover 
work for one damage site (e.g., all of the damage to a single school) 
or for similar types of damage at various locations (e.g., all sewer 
pump stations in a city). To facilitate project review, approval, and 
funding, FEMA classifies PA projects as either small or large based on 
annually adjusted cost thresholds. 

FEMA funds small projects through a process known as Simplified 
Procedures that is intended to expedite the processing of grant 
funding by obligating funds for small projects based on FEMA's 
approval of the project's cost estimate.[Footnote 55] At the beginning 
of fiscal year 2014, the small project minimum and maximum thresholds 
were $1,000 and $68,500, respectively. If the estimated total project 
amount is between the minimum and maximum thresholds, the project is 
processed as a small project using Simplified Procedures. The Sandy 
Recovery Improvement Act of 2013 (SRIA) required FEMA to complete an 
analysis to determine whether or not an increase in the small project 
thresholds was appropriate.[Footnote 56] Subsequently, FEMA raised the 
minimum threshold to $3,000 and the maximum threshold to 
$120,000.[Footnote 57] These new thresholds, which will both be 
adjusted annually to reflect changes in the Consumer Price Index for 
all Urban Consumers published by the Department of Labor, apply to all 
projects for disasters declared on or after February 26, 2014. Prior 
to SRIA, only the maximum threshold was adjusted annually. Under 
Simplified Procedures, FEMA does not perform a final inspection of 
completed small projects, but will review, or validate, a sample of an 
applicant's small projects to ensure that the project scope of work 
and damage assessment are complete and that all special considerations 
have been identified, among other things. 

After FEMA approves a project, funds are obligated--that is, they are 
made available--to the grantee, which, in turn, passes the funds along 
to subgrantees. Funding for small projects is generally fixed; 
however, FEMA may approve a cost estimate or scope of work for a 
project after project approval when new information comes to light. 
For example, if an applicant discovers that the actual costs for a 
project are higher than FEMA's estimate, the applicant may apply to 
FEMA for additional funds. Before the disaster is closed, the grantee 
must certify that all such projects were completed in accordance with 
FEMA approvals and that the state contribution to the nonfederal share 
has been paid to each subgrantee. 

FEMA funds large projects, those with an estimated cost greater than 
the small project maximum threshold, based on actual documented costs. 
As with small projects, FEMA initially approves a cost estimate for a 
large project and obligates the federal share of the funds to the 
grantee. Funds are generally made available to the subgrantee on a 
progress payment basis as work is completed and actual costs are 
documented. When all work associated with the project is complete, a 
subgrantee must submit documentation to the grantee to account for all 
incurred costs. The grantee then determines the final cost of the 
eligible work and submits a report to FEMA certifying that the 
subgrantee's costs were incurred in the completion of the eligible 
work. After reviewing the grantee's report, FEMA reviews and may 
adjust, through obligation or deobligation, the final amount of the 
grant to reflect the actual cost of the eligible work. 

Figure 9: Federal Emergency Management Agency (FEMA) Public Assistance 
Project Worksheet Development Process: 

[Refer to PDF for image: process map] 

1. President declares disaster. 

2. Grantee briefs subgrantee (FEMA may join briefing). 

3. Subgrantee submits request for Public Assistance to grantee. 

4. Grantee reviews and submits application for Public Assistance to 
FEMA. 

5. FEMA, grantee, and subgrantee have kickoff meeting to discuss 
project. 

6. FEMA, grantee, and subgrantee conduct site inspection and begin 
project worksheet formulation. 

7. FEMA, grantee, and subgrantee draft version of the project 
worksheet, including direct administrative costs (DAC). 

8. Subgrantee submits supporting documentation for project worksheet 
estimate, including DAC, to grantee. 

9. Grantee reviews and submits supporting documentation for project 
worksheet estimate to FEMA. 

10. FEMA reviews project worksheet and may reduce estimates, including 
DAC. 

Steps 8-9-10: Process may be repeated. 

11. FEMA approves project worksheet. Subgrantee may file appeal[A]. 

12. FEMA obligates funds to the grantee. 

13. Grantee monitors and inspects projects. 

14. Grantee disperses obligated funds to subgrantee[B]. 

15. Subgrantee receives funds. 

Steps 13-14-15: Process may be repeated. 

16. Small projects reviewed and validated. 

Steps 17-18-19 are for large projects only. 

17. Subgrantee submits eligible large project cost documentation. 

18. Grantee reviews eligible large project cost documentation. 

19. FEMA reviews eligible large project cost documentation and adjusts 
obligations as necessary. Subgrantee may file appeal. 

Steps 17-18-19: Process may be repeated. 

20. If necessary, FEMA reviews and makes a final decision on any 
appeals filed by subgrantees. 

21. Process closed out. 

Source: GAO analysis of FEMA Information. GAO-15-65. 

[End of figure] 

[End of section] 

Appendix V: Federal Emergency Management Agency (FEMA) Reimbursement 
Process for Public Assistance (PA) Management Costs: 

FEMA reimburses grantees and subgrantees for some expenses associated 
with administering PA grants. FEMA divides these reimbursements into 
two categories: section 324 management costs (management costs) and 
direct administrative costs. Management costs are any indirect costs, 
any administrative expense, and any other expense not directly 
chargeable to a specific project.[Footnote 58] Figure 10 describes the 
reimbursement process for management costs. 

Figure 10: Federal Emergency Management Agency (FEMA) Reimbursement 
Process for Public Assistance Management Costs: 

[Refer to PDF for image: process map] 

1. After the President declares a major disaster and awards PA, FEMA 
sets a preliminary lock-in amount of funds-—equal to 3.34% of the 
total federal share of projected eligible program costs-—to cover 
grantee and subgrantee management costs. 

2. The grantee submits initial management costs funding request to its 
FEMA regional office. 

3. Thirty to thirty-five days after the disaster declaration, FEMA 
provides the grantee 25% of the lock-in funds. 

4. No later than 120 days after the disaster declaration, the grantee 
submits documentation to support costs and activities to be paid for 
by the lock-in funds, including an estimate of the amount or 
percentage of funds the grantee will pass through to the subgrantee. 

5. Within 30 days of receiving the grantee's documentation, the FEMA 
regional office will approve or reject the documentation for eligible 
costs and activities. The regional office will not obligate the 
balance of the lock-in funds until the grantee's documentation is 
approved. 

6. Six months after the disaster declaration, the grantee, if it is 
able to justify a need, may request that FEMA obligate an interim 
amount of management costs funds. 

7. Twelve months after the disaster declaration, FEMA determines the 
final lock-in amount, which may not exceed $20 million without a 
waiver from FEMA, and obligates remaining funds to the grantee. 

8. The grantee submits a final management cost funding request, 
including any revisions and supporting documentation. Final payment of 
section 324 management costs is based on actual costs incurred. 

9. The grantee provides quarterly progress reports and expends all 
management costs funds within 8 years from the date of the major 
declaration or 180 days after the latest performance period date of a 
nonmanagement cost PA project worksheet, whichever is sooner. 

The grantee must have an approved State Administrative Plan on file 
with FEMA before PA grants will be approved. The grantee's State 
Administrative Plan must include procedures for determining the 
reasonable amount or percentage, if any, of section 324 management 
costs that it will pass through to the subgrantee, as well as closeout 
and audit procedures. 

Source: GAO analysis of FEMA Information. GAO-15-65. 

[End of figure] 

[End of section] 

Appendix VI: Small Disaster Example - Major Disaster Declaration (DR- 
1885) Kansas Severe Winter Storms and Snowstorm (Declared March 9, 
2010): 

This appendix shows Federal Emergency Management Agency's (FEMA) 
obligations for Public Assistance, Individual Assistance, Hazard 
Mitigation, Mission Assignment, and administrative costs for DR-
1885.[Footnote 59] With total obligations of about $21.7 million, DR-
1885 is classified as a small disaster. This includes approximately 
$4.1 million in FEMA's administrative costs, $0.8 million in 
management costs reimbursed to the grantee, and $0.2 million in direct 
administrative costs reimbursed to both the grantee and subgrantees. 

Figure 11: Designated Kansas Counties, and Obligations by Disaster 
Relief Fund Category, for DR-1885: 

[Refer to PDF for image: illustrated map and data] 

Map depicts the following: 
No designation; 
Public assistance; 
Public assistance and snow assistance; 
County borders. 

Public Assistance: $15,069,225; 
Individual Assistance: 0; 
Hazard mitigation: $2,485,150; 
Mission Assignment: 0; 
Total assistance: $17,554,375; 
FEMA administrative costs: $4,109,565; 
Grand total: $21,663,940. 

Source: GAO analysis of FEMA information (data); MapInfo (map). 
GAO-15-65. 

Note: This table provides actual obligations from the Disaster Relief 
Fund for Public Assistance, Individual Assistance, Hazard Mitigation, 
Mission Assignment, and FEMA administrative costs as of August 5, 2014. 

[End of figure] 

Table 9: Obligations by Federal Emergency Management Agency's (FEMA) 
Administrative Cost Categories for DR-1885: 

FEMA administrative cost category: Salaries and Benefits; 
Obligations: $2,048,642. 

FEMA administrative cost category: Travel; 
Obligations: 1,524,665. 

FEMA administrative cost category: Transportation; 
Obligations: 1,710. 

FEMA administrative cost category: Rent, Communications, and Utilities; 
Obligations: 229,862. 

FEMA administrative cost category: Printing and Reproduction; 
Obligations: 1,899. 

FEMA administrative cost category: Mission Assignment - Federal 
Operations Support; 
Obligations: 249,083. 

FEMA administrative cost category: Other Services; 
Obligations: 248. 

FEMA administrative cost category: Supplies and Materials; 
Obligations: 51,898. 

FEMA administrative cost category: Equipment; 
Obligations: 1,557. 

FEMA administrative cost category: Total; 
Obligations: $4,109,565. 

Source: Federal Emergency Management Agency (FEMA) data. GAO-15-65. 

Note: This table provides actual obligations from the Disaster Relief 
Fund as of August 5, 2014. Obligation amounts do not add up to total 
obligations due to rounding. 

[End of table] 

Table 10: Obligations for Administrative Costs Reimbursed to Grantees 
and Subgrantees of Public Assistance Grants for DR-1885: 

Reimbursement type: Management costs; 
Obligations: $797,142. 

Reimbursement type: Direct administrative costs; 
Obligations: 208,554. 

Reimbursement type: Total; 
Obligations: $1,005,696. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65: 

Note: This table provides actual obligations from the Disaster Relief 
Fund as of April 30, 2014. 

[End of table] 

[End of section] 

Appendix VII: Large Disaster Example - Major Disaster Declaration (DR-
4085): New York Hurricane Sandy (Declared October 30, 2012): 

This appendix shows Federal Emergency Management Agency's (FEMA) 
obligations for Public Assistance, Individual Assistance, Hazard 
Mitigation, Mission Assignment, and administrative costs for DR-
4085.[Footnote 60] With total obligations of $4.8 billion, DR-4085 is 
classified as a large disaster. This includes $482 million in FEMA 
administrative costs, $0 in management costs reimbursed to the 
grantee, and $10.9 million in direct administrative costs reimbursed 
to the grantee and subgrantees of Public Assistance grants.[Footnote 
61] 

Figure 12: Designated New York Counties, and Obligations by Disaster 
Relief Fund Category, for DR-4085: 

[Refer to PDF for image: illustrated map and data] 

Map depicts the following: 
No designation; 
Public assistance; 
Individual assistance and public assistance; 
County borders. 

Public Assistance: $2,668,111,437; 
Individual Assistance: $1,267,060,125; 
Hazard mitigation: $22,780,066; 
Mission Assignment: $315,154,715; 
Total assistance: $4,273,106,343; 
FEMA administrative costs: $482,355,188; 
Grand total: $4,755,461,531. 

Source: GAO analysis of FEMA information (data); MapInfo (map). 
GAO-15-65. 

Note: This figure provides actual obligations from the Disaster Relief 
Fund as of April 30, 2014. 

[End of figure] 

Table 11: Obligations by Federal Emergency Management Agency (FEMA) 
Administrative Cost Categories for DR-4085: 

FEMA administrative cost category: Salaries and Benefits; 
Obligations: $191,481,589. 

FEMA administrative cost category: Travel; 
Obligations: 119,184,235. 

FEMA administrative cost category: Transportation; 
Obligations: 2,266,459. 

FEMA administrative cost category: Rent, Communication, and Utilities; 
Obligations: 21,124,427. 

FEMA administrative cost category: Printing and Reproduction; 
Obligations: 410,170. 

FEMA administrative cost category: Mission Assignment-Federal 
Operations Support; 
Obligations: 96,833,637. 

FEMA administrative cost category: Federal Disaster Response 
Coordinator; 
Obligations: 1,350,704. 

FEMA administrative cost category: Other Services; 
Obligations: 27,097,311. 

FEMA administrative cost category: Supplies and Materials; 
Obligations: 3,736,276. 

FEMA administrative cost category: Equipments; 
Obligations: 1,054,741. 

FEMA administrative cost category: Land and Structures; 
Obligations: 201,632. 

FEMA administrative cost category: Urban Search and Rescue; 
Obligations: 17,614,000. 

FEMA administrative cost category: Interest and Dividends; 
Obligations: 6. 

FEMA administrative cost category: Total; 
Obligations: $482,355,188. 

Source: Federal Emergency Management Agency (FEMA) data. GAO-15-65. 

Note: This table provides actual obligations from the Disaster Relief 
Fund as of April 30, 2014. Obligation amounts do not add up to total 
obligations due to rounding. 

[End of table] 

Table 12: Obligations for Administrative Costs Reimbursed to Grantees 
and Subgrantees of Public Assistance Grants for DR-4085: 

Reimbursement type: Management costs; 
Obligations: $0. 

Reimbursement type: Direct administrative costs; 
Obligations: 10,945,092. 

Reimbursement type: Total; 
Obligations: $10,945,092. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
data. GAO-15-65. 

Note: This table provides actual obligations from the Disaster Relief 
Fund as of April 30, 2014. 

[End of table] 

[End of section] 

Appendix VIII: Sliding-Scale Administrative Allowance for Disasters 
Declared before November 13, 2007: 

Prior to the 2007 rule, the Federal Emergency Management Agency (FEMA) 
used several mechanisms to reimburse grantees for costs associated 
with administering Public Assistance (PA) grants.[Footnote 62] 
Additionally, both grantees and subgrantees were eligible to receive a 
sliding-scale administrative allowance to cover costs incurred in 
preparing project worksheets, validating small projects, preparing 
final inspection reports, quarterly reports, and final audits, and 
making related field inspections by state employees, including 
overtime pay and per diem and travel expenses, but not including 
regular time for such employees. For grantees, the amount of 
reimbursement was based on a percentage of the total amount of 
assistance provided (federal share) for all eligible subgrantees in 
the state. 

Table 13: Sliding-Scale Administrative Allowance for Grantees: 

Assistance amount: For the first $100,000; 
Allowance amount: 3%. 

Assistance amount: For the next $900,000; 
Allowance amount: 2%. 

Assistance amount: For the next $4,000,000; 
Allowance amount: 1%. 

Assistance amount: For assistance over $5,000,000; 
Allowance amount: 0.5%. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
information. GAO-15-65. 

[End of table] 

In addition, a subgrantee could be reimbursed to cover necessary costs 
of requesting, obtaining, and administering federal disaster 
assistance subgrants. For subgrantees, the amount of reimbursement was 
based on a percentage of net eligible costs. 

Table 14: Sliding-Scale Administrative Allowance for Subgrantees: 

Assistance amount: For the first $100,000 of net eligible costs; 
Allowance amount: 3%. 

Assistance amount: For the next $900,000; 
Allowance amount: 2%. 

Assistance amount: For the next $4,000,000; 
Allowance amount: 1%. 

Assistance amount: For assistance over $5,000,000; 
Allowance amount: 0.5%. 

Source: GAO analysis of Federal Emergency Management Agency (FEMA) 
information. GAO-15-65. 

[End of table] 

[End of section] 

Appendix IX: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

November 25, 2014: 

Chris P. Currie: 
Acting Director, Homeland Security and Justice: 
u.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Re: Draft Report GAO-15-65, "Federal Emergency Management Agency: 
Opportunities Exist to Strengthen Oversight of Administrative Costs
For Major Disasters" 

Dear Mr. Currie: 

Thank you for the opportunity to comment on this draft report. The 
U.S. Department of Homeland Security (DHS) appreciates the u.S. 
Government Accountability Office's (GAO's) work in planning and 
conducting its review and issuing this report. 

Over the past several years, the Federal Emergency Management Agency 
(FEMA) has been reviewing its disaster operating processes with a 
focus on improving its disaster resource management. These efforts 
include both improving the projection of resource needs and managing 
disaster administrative costs in a more efficient and effective 
manner. One of FEMA's goals is to reduce the average annual percentage 
of administrative costs by 5 percentage points by the end of2018. 
While FEMA is aggressively pursuing administrative cost reductions, 
the Agency is mindful not to sacrifice its mission and assistance to 
disaster survivors. 

The draft report contained three recommendations with which the 
Department concurs. Specifically, GAO recommended that the FEMA 
Administrator: 

Recommendation 1: Develop an integrated plan to better control and 
reduce FEMA's administrative costs for major disasters. The plan 
should include steps the agency will take to reduce administrative 
costs, milestones for accomplishing the reduction, and clear roles and 
responsibilities, including the assignment of senior officials/offices 
responsible for monitoring and measuring performance. 

Response: Concur. FEMA agrees that additional steps can be taken to 
strengthen administrative cost management. FEMA has prioritized 
improving administrative cost management and made reducing disaster 
administrative costs a performance goal in its Strategic Plan, which 
FEMA's Deputy Administrator is accountable for implementing. 
The performance goal challenges FEMA to "reduce the average annual 
percentage of administrative costs for field operations, as compared 
to total program costs, by 5 percentage points" by the end of 2018. 

As part of implementing this effort, FEMA adopted a standardized 
definition for administrative costs, specifying which disaster costs 
are administrative for the purposes of reporting and analysis. FEMA 
has also established a Disaster Administrative Cost Integrated Project 
Team (IPT) comprising representatives of key FEMA business units
and regional offices. The IPT is charged with taking actions to 
institutionalize the new administrative cost definition and scope, and 
posture the agency for improved administrative cost management. 
Estimated Completion Date (ECD): September 30, 2015. 

Recommendation 2: 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. 

Response: Concur. FEMA currently tracks administrative costs by 
disaster, and is continually working to improve its program design and 
delivery, related outcomes, and to gain efficiencies in disaster 
administrative costs and staffing. Recently, FEMA conducted an 
analysis to ensure that costs are appropriately categorized as 
administration or assistance. As a result, FEMA adopted a standardized 
definition for administrative costs, which represented a key step for 
future reporting and analysis. It is important to note that 
redesigning FEMA financial systems to track administrative data for 
major disasters by Public Assistance, Individual Assistance, Hazard 
Mitigation, and Mission Assignment rather than by overall disasters 
would be a significant undertaking. The investment required for this 
may be cost prohibitive; however, assessing the cost versus benefit 
will help inform the decision-making process on how best to move 
forward on this issue. ECD: September 30, 2015. 

Recommendation 3: Clarify the agency's guidance and minimum 
documentation requirements for direct administrative costs claims by 
grantees and subgrantees of the Public Assistance program. 

Response: Concur. As noted in the draft report, FEMA is considering a 
direct administrative costs (DAC) pilot program potentially for 
Hurricane Sandy recovery operations. The pilot could apply a sliding 
scale or fixed percentage administrative allowance to reduce the 
administrative burden of the current DAC process. If implemented and 
successful, results from this program could inform the development of
additional guidance or regulatory modification and similar approaches 
could be applied in future disasters. 

For current and other past disasters, FEMA will provide clarifying 
guidance on DAC claims and documentation requirements. This 
infol1nation will be incorporated into the Public Assistance unified 
guidance document that is scheduled to be issued next year. ECD: 
October 31, 2015. 

Again, thank you for the opportunity to review and comment on this 
draft report. Technical comments were previously provided under a 
separate cover. Please feel free to contact me if you have any 
questions. We look forward to working with you in the future. 

Sincerely, 

Signed by: 

Jim H. Crumpacker, CIA, CFE:
Director: 
Departmental GAO-OIG Liaison Office: 

[End of section] 

Appendix X: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Chris P. Currie, (404) 679-1875 or curriec@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Edward George, Assistant 
Director; David Alexander; Aditi Archer; Andrew Berglund; Jeffrey 
Fiore; Eric Hauswirth; Tracey King; Anne Kruse; Jessica Orr; Jim 
Ungvarsky; and Samuel Woo made key contributions to this report. 

[End of section] 

Footnotes: 

[1] In addition to issuing major disaster declarations, the President 
may issue emergency declarations. 42 U.S.C. § 5191. If the President 
declares an emergency, the federal government may provide immediate 
and short-term assistance that is necessary to save lives, protect 
property and public health and safety, or lessen or avert the threat 
of a catastrophe, among other things. 42 U.S.C. § 5192. Federal 
assistance may not exceed $5 million under an emergency declaration 
unless continued emergency assistance is immediately required; there 
is a continuing and immediate risk to lives, property, or public 
health or safety; and necessary assistance will not otherwise be 
provided on a timely basis. 42 U.S.C. § 5193. 

[2] FEMA administers three programs funded by the DRF: Individual 
Assistance, PA, and Hazard Mitigation. The DRF is also used to fund 
Mission Assignment. FEMA uses Mission Assignment to task and reimburse 
other federal entities that provide direct assistance during emergency 
and major disaster declarations. 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. Hazard Mitigation provides additional funds to 
states to assist communities in implementing long-term measures to 
help reduce the potential risk of future damages to facilities. 

[3] No-year funding refers to appropriations that remain available for 
obligation for an indefinite period of time. 

[4] GAO, Federal Disaster Assistance: Improved Criteria Needed to 
Assess a Jurisdiction's Capability to Respond and Recover on Its Own, 
[hyperlink, http://www.gao.gov/products/GAO-12-838] (Washington, D.C.: 
Sept. 12, 2012). 

[5] FEMA obligates funds to states and tribes that are considered 
"grantees," responsible for managing and disbursing PA funds, while 
local governments or equivalent entities are considered the 
"subgrantees," the entities ultimately receiving the funds. 

[6] The FCO is a position created by the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act as amended, and is appointed by 
the President immediately upon his declaration of a major disaster or 
emergency to coordinate the administration of relief, among other 
things. 42 U.S.C. § 5143. Project Management Institute, Inc. A Guide 
to the Project Management Body of Knowledge (PMBOK® Guide), Fifth 
Edition, (Newtown Square, Pennsylvania: 2013). We have used A Guide to 
the Project Management Body of Knowledge to provide criteria in 
previous reports, including GAO, Nonproliferation and Disarmament 
Fund: State Should Better Assure the Effective Use of Program 
Authorities, [hyperlink, http://www.gao.gov/products/GAO-13-83] 
(Washington, D.C.: Nov. 30, 2012). GAO, Standards for Internal Control 
in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999). 

[7] We obtained data from FEMA's (1) National Emergency Management 
Information System, (2) Emergency Management Mission Integrated 
Environment, and (3) Enterprise Data Warehouse. 

[8] FEMA, Disaster Assistance Policy 9529.9: Section 324 Management 
Costs and Direct Administrative Costs (Washington D.C.: March 12, 
2008). [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 
Office of Management and Budget (OMB), Final Bulletin for Agency Good 
Guidance Practices. (Washington D.C.: January 2007). 

[9] See 72 Fed. Reg. 57,869 (Oct. 11, 2007). 

[10] We selected Region II because it had a large recent catastrophic 
disaster--Hurricane Sandy. We selected Region IV because it represents 
all sizes of disasters, including catastrophic, frequently had 
disasters, and has a range of disaster types. We selected Region VII 
because it represents many sizes of disasters, is a frequent disaster 
area--with a total of 84 out of 650 disasters during fiscal years 2004 
through 2013-and had a range of disaster types. 

[11] 42 U.S.C. § 5170. 

[12] 42 U.S.C. § 5170. 

[13] See 42 U.S.C. § 5170-5189g. 

[14] Hereafter in this report, jurisdictions refer to states, the 
District of Columbia, U.S. territories, and Freely Associated States 
(nations in free association with the United States under the Compacts 
of Free Association). 

[15] FEMA administers three programs funded by the DRF, including PA, 
Individual Assistance, and Hazard Mitigation. Hazard Mitigation 
provides additional funds to states to assist communities in 
implementing long-term measures to help reduce the potential risk of 
future damages to facilities. In addition, FEMA is responsible for 
Mission Assignment--costs paid by FEMA for work assigned to other 
agencies and departments. 

[16] According to FEMA officials, the agency relied on the Statement 
of Federal Financial Accounting Standards 4 to define its 
administrative costs. 

[17] Certain administrative costs associated with disaster 
declarations are obligated from FEMA's annual appropriations. For 
example, according to FEMA officials, the salary of a full-time FEMA 
employee who works at headquarters is obligated from the agency's 
annual appropriations, even if the employee works on a specific 
disaster declaration. The scope of our review included only 
obligations from the DRF, and as a result, obligations from FEMA's 
annual appropriations were excluded from our administrative cost 
analyses. 

[18] JFOs are temporary FEMA offices established to respond to 
declared disasters and are headed by federal coordinating officers 
who, among other things, coordinate the activities of the disaster 
workforce deployed for a particular disaster. 

[19] 42 U.S.C. § 5165b. 

[20] FEMA, Disaster Assistance Policy 9529.9: Section 324 Management 
Costs and Direct Administrative Costs, (Washington D.C.: Mar. 12, 
2008). 

[21] The Disaster Mitigation Act of 2000 amended the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act to add section 
324, which required the President to issue regulations establishing 
management costs rates for grantees and subgrantees of disaster 
assistance programs. 42 U.S.C. § 5165b. 

[22] 72 Fed, Reg, 57,869 (Oct. 11, 2007). The rule also established 
management cost rates for the Hazard Mitigation Grant Program. 

[23] 44 C.F.R. § 207.5(b)(4)(i). 

[24] FEMA officials calculate a major disaster's administrative cost 
percentage by dividing FEMA's administrative cost obligations by total 
obligations for the disaster. Total obligations include funds for PA, 
Individual Assistance, Hazard Mitigation, Mission Assignment, and 
FEMA's administrative costs. We calculated administrative cost 
percentages using the formula provided by FEMA. 

[25] According to FEMA officials, administrative costs are typically 
higher in the early months of a declaration, typically decreasing as 
the declaration matures (that is, as labor-intensive response 
activities decline). In order to ensure the results of analyses were 
not skewed by major disasters for which recovery efforts had not been 
completed, we analyzed actual administrative costs for disaster 
declarations that were closed as of April 30, 2014. For declarations 
that were still open as of April 30, 2014, we analyzed actual 
obligations as of April 30, 2014, plus the amount that FEMA projected 
to obligate in the future until the declarations are eventually closed. 

[26] FEMA, Achieving Efficient JFO Operations: A Guide for Managing 
Staffing Levels and Administrative Costs (Washington, D.C.: November 
2010). For the purposes of this report, we categorized disasters with 
projected assistance greater than $5 billion as large disasters. 

[27] We used the fiscal year 1989-to-1998 period because it is the 
earliest 10-year period of obligations data maintained by FEMA. 

[28] For example, if FEMA obligated $10 million for a major disaster, 
and $6 million related to administrative costs and $4 million related 
to disaster assistance, then FEMA would have charged the DRF more for 
administrative cost than assistance. 

[29] Our analysis at table 3 and table 4 were based on data provided 
by FEMA. According to FEMA officials, the data included actual 
obligations for major disasters that were closed as of April 30, 2014. 
For declarations that were still open as of April 30, 2014, the data 
included actual obligations as of April 30, 2014, plus the amount that 
FEMA anticipates obligating in the future until the declarations are 
eventually closed. As a result, the estimated reductions in FEMA's 
administrative costs presented in tables 3 and 4 will likely change 
when all major disasters during fiscal years 2004 through 2013 are 
ultimately closed. 

[30] As fiscal year 2011 started on October 1, 2010, our analysis 
included major disasters declared one month prior to FEMA's creation 
of the target ranges in November 2010. 

[31] FEMA, Achieving Efficient JFO Operations: A Guide for Managing 
Staffing Levels and Administrative Costs (Washington, D.C.: November 
2010). 

[32] A virtual JFO is an off-site location wherein disaster workforce 
personnel utilize communication tools to deliver disaster assistance 
programs. 

[33] In fiscal year 2011, FEMA leaders implemented FEMAStat--a series 
of meetings wherein FEMA leadership uses current data to analyze 
performance and identify solutions for ongoing problems. The FEMAStat 
team is charged with coordinating the FEMAStat process. 

[34] FEMA, FEMA Strategic Plan 2014-2018, (July 2014) 

[35] Pub. L. No. 113-2, 127 Stat. 39. 

[36] See 42 U.S.C. § 5189f(e)(1)(A), (e)(2)(A). 

[37] Project Management Institute, Inc. A Guide to the Project 
Management Body of Knowledge (PMBOK® Guide), Fifth Edition. We have 
used A Guide to the Project Management Body of Knowledge to provide 
criteria in previous reports, including GAO, Nonproliferation and 
Disarmament Fund: State Should Better Assure the Effective Use of 
Program Authorities, [hyperlink, 
http://www.gao.gov/products/GAO-13-83] (Washington, D.C.: Nov. 30, 
2012). 

[38] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[39] In addition, FEMA does not track or analyze its administrative 
costs for Mission Assignment. According to FEMA officials, certain 
FEMA administrative costs for major disasters may not directly relate 
to FEMA's delivery of PA, Individual Assistance, Hazard Mitigation, or 
Mission Assignment. 

[40] FEMA, FEMA Strategic Plan 2014-2018, (July 2014) 

[41] 72 Fed. Reg, 57,869 (Oct. 11, 2007). 

[42] 72 Fed. Reg, at 57,869. 

[43] For the PA program for major disasters, the management costs rate 
is 3.34 percent. 

[44] Prior to the 2007 change, grantees and subgrantees received 
statutory administrative costs as a sliding scale based on the total 
amount of federal assistance provided, in the case of the grantee, to 
all subgrantees in the state, and in the case of the subgrantee, to 
the individual applicant. Grantees and subgrantees were to receive, 
for the first $100,000 of assistance, 3 percent of such assistance; 
for the next $900,000, 2 percent; for the next $4,000,000, 1 percent, 
and for assistance over $5,000,000, one-half percent of such 
assistance. 44 C.F.R. § 206.228(a)(2) (2006). 

[45] FEMA, Public Assistance Program Sub-Grantee Administrative Costs 
Assessment DR1763-IA, Revised Draft, (March 4, 2009). 

[46] FEMA, FEMA Memorandum: Disaster Assistance Policy DAP9525.9, 
Section 324 Management Costs and Direct Administrative Costs and 
Recovery Policy 9525.14, Grantee Administrative Costs, (Sept. 8, 2009). 

[47] In contrast, for the administrative allowance that grantees and 
subgrantees received prior to the 2007 change, the calculation was 
automated within FEMA's data systems and forwarded to the grantee, who 
could then provide the administrative allowance to the subgrantee, as 
appropriate. 

[48] First appeals are reviewed and processed by the FEMA regional 
offices. Second Appeals are reviewed and processed by FEMA 
headquarters. We did not determine the reliability of the systems FEMA 
utilizes in tracking its Public Assistance Appeals. 

[49] OMB, Final Bulletin for Agency Good Guidance Practices. January 
2007. 

[50] Project Management Institute, Inc. A Guide to the Project 
Management Body of Knowledge (PMBOK® Guide), Fifth Edition, (Newtown 
Square, Pennsylvania: 2013). We have used A Guide to the Project 
Management Body of Knowledge to provide criteria in previous reports, 
including GAO, Nonproliferation and Disarmament Fund: State Should 
Better Assure the Effective Use of Program Authorities, [hyperlink, 
http://www.gao.gov/products/GAO-13-83] (Washington, D.C.: Nov. 30, 
2012). GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[51] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] and 
Office of Management and Budget, Final Bulletin for Agency Good 
Guidance Practices (January 2007). 

[52] Ten states (grantees): Alabama, Florida, Kansas, Kentucky, Iowa, 
Missouri, Mississippi, Nebraska, New Jersey, New York. 

[53] Eleven localities (subgrantees): Borough of Mantoloking, New 
Jersey; Carroll County, Kentucky; City of Cedar Rapids, Iowa; City of 
Live Oak, Florida; City of Long Beach, New York; Harrison County, 
Mississippi; Leavenworth-Jefferson Electric Cooperative, Kansas; Loup 
County, Nebraska; Marshall County, Alabama; Metropolitan 
Transportation Authority, New York; and Osage County, Missouri. 

[54] Adjusters International, ER Assist, and Witt O'Brien's. 

[55] The Disaster Relief and Emergency Assistance Amendment s of 1988 
introduced the Simplified Procedures maximum threshold. 42 U.S.C. § 
5189. 

[56] Pub. L. No. 113-2, § 1107, 127 Stat. 39, 46. 

[57] 79 Fed. Reg. 10,685 (Feb. 26, 2014). 

[58] 42 U.S.C. § 5165b. 

[59] FEMA assigns each major disaster a "disaster declaration number," 
which is a unique, sequential number preceded by "DR." 

[60] FEMA assigns each major disaster a "disaster declaration number," 
preceded by the abbreviation "DR." 

[61] According to FEMA and State of New York officials, New York is 
claiming management costs for this disaster but, according to FEMA 
data, funds had not been obligated as of April 30, 2014. 

[62] 44 C.F.R. 206.228 (2006) 

[End of section] 

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