GAO-06-834, Disaster Relief: Governmentwide Framework Needed to Collect and Consolidate Information to Report on Billions in Federal Funding for the 2005 Gulf Coast Hurricanes


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entitled 'Disaster Relief: Governmentwide Framework Needed to Collect 
and Consolidate Information to Report on Billions in Federal Funding 
for the 2005 Gulf Coast Hurricanes' which was released on September 6, 
2006. 

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Report to Congressional Committees: 

United States Government Accountability Office: 

GAO: 

September 2006: 

Disaster Relief: 

Governmentwide Framework Needed to Collect and Consolidate Information 
to Report on Billions in Federal Funding for the 2005 Gulf Coast 
Hurricanes: 

Tracking Hurricane Funding: 

GAO-06-834: 

GAO Highlights: 

Highlights of GAO-06-834, a report to congressional committees 

Why GAO Did This Study: 

Hurricane Katrina devastated the Gulf Coast region of the United States 
and caused billions of dollars in damage. Hurricanes Rita and Wilma 
further exacerbated damage to the region. The Federal Emergency 
Management Agency (FEMA), within the Department of Homeland Security 
(DHS), was tasked with the primary role of managing the federal relief 
and recovery efforts. This review was performed under the Comptroller 
General’s authority because of widespread congressional interest in the 
response to this disaster. GAO examined whether the federal government 
was adequately tracking and reporting on the use of the funding 
provided in the four emergency supplemental appropriations acts enacted 
as of June 2006. GAO analyzed the emergency supplemental appropriations 
acts and conference reports, reviewed FEMA’s required weekly reports, 
and interviewed federal agency officials. 

What GAO Found: 

FEMA’s required weekly reports to the Appropriations Committees on the 
use of funds it received do not provide timely information from a 
governmentwide perspective because FEMA does not have a mechanism to 
report on the financial activity of the agencies performing work on its 
behalf. Specifically, when FEMA tasks another federal agency through a 
mission assignment, FEMA records the entire amount upfront as an 
obligation, whereas the performing agency does not record an obligation 
until a later date, thereby overstating reported governmentwide 
obligations. The opposite is true for expenditures. The performing 
agency expends the funds, but then bills FEMA for reimbursement. FEMA 
does not record the expenditure until it has received the bill and 
reviewed it, thereby understating reported governmentwide expenditures. 
As a result, while FEMA is reporting as required, from a governmentwide 
perspective, FEMA’s reported obligations are overstated and 
expenditures are understated. 

The federal government also does not have a governmentwide framework or 
mechanisms in place to collect and consolidate information from the 
individual federal agencies that received emergency supplemental 
appropriations for hurricane relief and recovery efforts and report on 
this information. About $88 billion has been appropriated to 23 
different federal agencies through four emergency supplemental 
appropriations acts (see figure below); however, no one agency or 
central collection point exists to compile and report on how these 
funds are being spent. Decision makers need this consolidated 
information to determine how much federal funding has been spent and by 
whom, whether more may be needed, or whether too much has been 
provided. The ability to separately track and report on these funds is 
important to help ensure better accountability and clearly identify the 
status of funding provided in direct response to these hurricanes at 
both the individual federal agency level as well as the governmentwide 
level. Also, it is important to provide additional transparency so that 
hurricane victims, affected states, as well as American taxpayers, know 
how these funds are being spent. 

Figure: Funding Received by the Federal Agencies in Emergency 
Supplemental Appropriations Acts: 

[See PDF for Image] 

Source: GAO analysis of Pub. L. No. 109-61, Pub. L. No. 109-48, and 
Pub. L. No. 109-234. 

[End of Figure] 

What GAO Recommends: 

GAO makes four recommendations to DHS to improve the information on the 
status of hurricane relief funds provided in FEMA’s weekly reports. GAO 
also recommends that the Office of Management and Budget (OMB) take 
action to improve transparency and accountability regarding the status 
of hurricane-related funding at the governmentwide level. DHS and OMB 
concurred with the recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-834]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact McCoy Williams at (202) 
512-9095 or williamsm1@gao.gov. 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

The Government Does Not Have a Framework in Place to Collect and 
Consolidate Information to Report on Hurricane-Related Funding: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Reporting Requirements Included in the Four Emergency 
Supplemental Appropriations Acts: 

Appendix III: Comments from the Department of Homeland Security: 

Appendix IV: Comments from the Office of Management and Budget: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Emergency Supplemental Funding Received by Federal Agencies in 
the Four Emergency Supplemental Appropriations Acts as of June 2006 
Related to Gulf Coast Hurricanes: 

Table 2: Mission Assignment Obligations and Expenditures Reported by 
FEMA for Hurricanes Katrina, Rita, and Wilma, as of March 29, 2006: 

Figure: 

Figure 1: Funding and Reimbursement Process Related to FEMA Issuing 
Mission Assignments to Performing Agencies: 

Abbreviations: 

COE: Army Corps of Engineers: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

FEMA: Federal Emergency Management Agency: 

HUD: Department of Housing and Urban Development: 

IPAC: Intra-Governmental Payment and Collection: 

NRP: National Response Plan: 

OMB: Office of Management and Budget: 

United States Government Accountability Office: 
Washington, DC 20548: 

September 6, 2006: 

Congressional Committees: 

Hurricane Katrina struck the Gulf Coast of the United States on August 
29, 2005. It devastated the region and caused billions of dollars in 
damage. The hurricane affected about 1.5 million people located within 
approximately 90,000 square miles spanning Louisiana, Mississippi, and 
Alabama, and was the worst natural disaster in our nation's history in 
geographic scope, extent and severity of destruction and damage, and 
the number of persons displaced from their homes. Shortly after 
Hurricane Katrina made landfall, Hurricanes Rita and Wilma followed, 
further exacerbating damage to the Gulf Coast region. In response to 
these events, the Congress has provided nearly $88 billion for relief 
and recovery through four emergency supplemental appropriations acts 
through the end of June 2006.[Footnote 1] 

As part of its mission under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act),[Footnote 2] as reflected in 
the National Response Plan (NRP),[Footnote 3] the Federal Emergency 
Management Agency (FEMA), within the Department of Homeland Security 
(DHS), was tasked with the primary role of managing the federal relief 
and recovery efforts within the affected region. The first emergency 
supplemental appropriation act was enacted 4 days after Hurricane 
Katrina struck the Gulf Coast and provided over $10 billion. The second 
emergency supplemental appropriation act was enacted 6 days after the 
first emergency supplemental appropriation act and provided 
significantly more funding--$50 billion--to FEMA for its Disaster 
Relief Fund and required the Secretary of Homeland Security to provide 
weekly reports[Footnote 4] to the Committees on Appropriations 
detailing the allocation and obligation of these amounts. The Congress 
later called for FEMA to also report on expenditures over $50 million, 
among other information. 

In creating these reporting requirements, the Congress sent a clear 
message that it wanted to know how these funds were being spent and 
have updated information on a weekly basis. These reports are publicly 
available and at the time of this report were being posted to the House 
Committee on Appropriations website.[Footnote 5] In December 2005, when 
the Congress rescinded $23.4 billion from FEMA's Disaster Relief Fund, 
FEMA had obligated about $25 billion, or 42 percent, of the $60 billion 
it received in the first two emergency supplemental appropriations. 
With this rescission, the Congress distributed the funds as direct 
appropriations to other federal agencies. As of June 2006, 
approximately $88 billion has been provided to 23 federal 
agencies[Footnote 6] for the relief work through four emergency 
supplemental appropriations acts. 

We currently have a large body of ongoing work to address preparation, 
response, recovery, and rebuilding efforts related to the hurricanes 
that devastated the Gulf Coast region. Due to widespread congressional 
interest in these subjects, our work is being completed under the 
Comptroller General's authority to conduct evaluations on his own 
initiative. Topics of reports already issued include (1) contract 
management; (2) accounting for international assistance; (3) the 
adequacy of internal controls to prevent fraud and abuse; and (4) the 
military's response to catastrophic natural disasters.[Footnote 7] We 
are sending you this report on the tracking of hurricane relief funding 
because of your interest in and responsibility for oversight of matters 
related to the hurricane relief and recovery efforts. Our work focused 
on the funds designated for hurricane relief and recovery in the four 
emergency supplemental appropriations acts enacted as of June 2006. Our 
objective was to determine whether the federal government was 
adequately tracking and reporting on the use of this funding. To 
accomplish this objective, we reviewed the four emergency supplemental 
acts to determine which federal agencies were receiving appropriations, 
how much each was receiving, what the funds were intended for, and 
whether any reporting requirements were specified. Because the second 
supplemental, which provided $50 billion to FEMA, required FEMA to 
report to the Committees on Appropriations on a weekly basis on the use 
of these funds,[Footnote 8] we reviewed FEMA's weekly reports to 
determine whether the information provided was timely and useful. We 
limited our review of these reports to certain aspects of them that 
have governmentwide implications. Specifically, our review of FEMA's 
weekly reports focused on the obligations and expenditures reported for 
mission assignments[Footnote 9] that were issued to agencies performing 
disaster relief work related to the Gulf Coast hurricanes on behalf of 
FEMA. The obligation and expenditure information we present in this 
report was obtained from FEMA and certain other federal agencies. To 
assess the reliability of the data, we interviewed officials 
knowledgeable about the data included in the reports and what the data 
represented, and determined that the data were sufficiently reliable 
for the purposes of this report. Additional details on our scope and 
methodology are presented in appendix I. We conducted our work from 
October 2005 through June 2006 in accordance with generally accepted 
government auditing standards. 

Results in Brief: 

The federal government is not adequately tracking and reporting, on a 
governmentwide basis, on the use of the $88 billion in hurricane relief 
and recovery funds provided thus far to 23 federal agencies in the four 
emergency supplemental appropriations acts. FEMA, which initially 
received $60 billion for hurricane relief, is required to report weekly 
to the House and Senate Appropriations Committees on the use of funds 
it received; however, these reports do not provide timely information 
from a governmentwide perspective because FEMA does not have a 
mechanism in place to report on the financial activity of the agencies 
performing work on its behalf through mission assignments. 
Specifically, when FEMA tasks another federal agency through a mission 
assignment, which is similar to an interagency agreement to provide 
goods and services, FEMA records the entire amount upfront as an 
obligation in its accounting system and reports these amounts to the 
Congress; whereas the agency performing the task for FEMA does not 
record an obligation until a later date, thereby overstating reported 
governmentwide obligations. For example, FEMA initially reported 
mission assignment obligations issued to the Department of Defense 
(DOD) related to Hurricane Katrina in the amount of about $2.2 billion. 
While this amount was eventually reduced to about $1.1 billion, DOD had 
only actually incurred about $481 million in obligations over the same 
period of time. In addition, based on information provided by the Coast 
Guard, FEMA had recorded obligations of nearly $192 million as of April 
2006; however, at that time the Coast Guard had only actually incurred 
about $85 million in obligations. 

The opposite is true for expenditures. The performing agency expends 
the funds, but then has to bill FEMA for reimbursement. This may happen 
months after the actual payment is made by the performing agency. FEMA 
does not include the expenditure in its reports to the Congress until 
it has received the bill from the performing agency, reviewed it, and 
recorded the expenditure in its accounting system, thereby understating 
reported governmentwide expenditures. For example, the U.S. Forest 
Service had not billed FEMA for any of its work done under mission 
assignments even though the agency reported that it had made close to 
$170 million in expenditures related to its Hurricane Katrina mission 
assignments as of January 31, 2006. Accordingly, FEMA reported no 
expenditures for this agency in its weekly report since FEMA had not 
yet approved any billings. A user of FEMA's report could incorrectly 
infer that a particular agency has received tasks from FEMA but has not 
spent any of the funds, either because the agency has not billed FEMA 
or because the bill has not been reviewed and recorded by FEMA. As a 
result, while FEMA is reporting as required, from a governmentwide 
perspective, FEMA's reported obligations are overstated and 
expenditures are understated. Depending on the stage of the process, 
the differences could be significant. 

Further, from a governmentwide perspective, we found that there is no 
one agency or central collection point that exists to compile and 
report on how the approximately $88 billion provided through four 
emergency supplemental appropriations acts are being spent. Although 
each federal agency is responsible for tracking the funds it received, 
obligations incurred, and funds expended through its own internal 
tracking systems, no mechanisms are in place to consolidate and report 
on this information. Without a framework and mechanisms in place to 
collect and consolidate information from these agencies on a 
consistent, periodic basis, it will be difficult for decision makers to 
determine how much federal funding has been spent and by whom, whether 
more may be needed, or whether too much has been provided. The ability 
to separately track and report on these funds is important to help 
ensure better accountability and clearly identify the status of funding 
provided in direct response to these hurricanes at both the individual 
federal agency level as well as the governmentwide level. Also, it is 
important to provide additional transparency so that hurricane victims, 
affected states, as well as American taxpayers, know how these funds 
are being spent. At the same time, we recognize the substantial 
challenge in balancing the need to get money out quickly to those who 
are actually in need and sustaining public confidence in disaster 
programs by taking all possible steps to minimize fraud and abuse. 

While there are some reporting requirements included in the emergency 
supplemental appropriations acts, overall reporting requirements differ 
greatly. Further, the reporting requirements do not call for 
consolidating information on obligations and expenditures on a 
governmentwide basis and, therefore, do not facilitate governmentwide 
reporting on hurricane-related spending. 

We make four recommendations to FEMA to improve the information on the 
status of hurricane relief funds from a governmentwide perspective 
provided in FEMA's weekly reports to the Appropriations Committees. 
Given the magnitude of the emergency supplemental federal funding 
provided thus far--more than double DHS's annual discretionary budget 
authority--in response to the Gulf Coast hurricanes and the need for 
additional transparency and accountability, we are also recommending 
that the Office of Management and Budget (OMB) establish a framework 
for governmentwide reporting and either collect and consolidate 
information on the status of the hurricane-related funding itself or 
designate another appropriate agency, such as the Department of the 
Treasury, to do so and report to the Appropriations Committees on a 
periodic basis. 

We provided a draft of this report to DHS and OMB for comment. DHS and 
OMB concurred with our recommendations, and their comments, along with 
our evaluation, are discussed in the Agency Comments and Our Evaluation 
section of this report. The comments are also reprinted in their 
entirety in appendixes III and IV, respectively. We also provided 
excerpts of the report to those agencies cited in examples for their 
review. They provided technical comments, and we made revisions as 
appropriate. 

Background: 

On August 29, 2005, Hurricane Katrina devastated the Gulf Coast region, 
causing human casualties and billions of dollars in damage. During 
major disasters such as this, the Stafford Act authorizes the federal 
government to assist in saving lives, reducing human suffering, 
mitigating the effects of lost income, and helping repair or rebuild 
certain damaged facilities. As of June 2006, nearly $88 billion was 
appropriated by the Congress through four emergency supplemental 
appropriations for relief and recovery efforts related to the recent 
Gulf Coast hurricanes. FEMA, the DHS component statutorily charged with 
administering the provisions of the Stafford Act,[Footnote 10] uses 
appropriations made to the Stafford Act's Disaster Relief Fund to 
assist relief and recovery efforts. 

Funding Provided for the Hurricane Relief Effort: 

Initially, in September 2005, the Congress appropriated $62.3 billion 
for the response and recovery effort related to Hurricane Katrina in 
two emergency supplemental appropriations acts.[Footnote 11] Of that 
amount, (1) FEMA received $60 billion for the Disaster Relief Fund, (2) 
DOD received $1.9 billion, and (3) the Army Corps of Engineers (COE), a 
DOD agency, received $400 million. As of late December 2005, FEMA 
reported that it had obligated about $25 billion, or 42 percent, of the 
$60 billion it had received. In December 2005, the Congress provided 
additional funds for the recovery effort related to the 2005 Gulf Coast 
hurricanes through a third emergency supplemental appropriation 
act.[Footnote 12] This legislation provided approximately $29 billion 
to 20 federal agencies and also rescinded approximately $23.4 billion 
from the $60 billion appropriated to FEMA's Disaster Relief Fund in 
September 2005. The third emergency supplemental appropriation resulted 
in a net increase of about $5.5 billion in total direct federal funding 
for hurricane relief and recovery and the fourth resulted in a net 
increase of approximately $20.1 billion. Table 1 shows the agencies 
that received direct funding through the four emergency supplemental 
appropriations acts. 

Table 1: Emergency Supplemental Funding Received by Federal Agencies in 
the Four Emergency Supplemental Appropriations Acts as of June 2006 
Related to Gulf Coast Hurricanes: 

Dollars in millions. 

Agency: FEMA Disaster Relief Fund; 
First: $10,000.0; 
Second: $50,000.0; 
Third: $(23,409.3)[A]; 
Fourth: $5,962.0[B]; 
Total: $42,552.7; 
Percentage of total: 48.4%. 

Agency: DOD; 
First: 500.0; 
Second: 1,400.0; 
Third: 5,753.8; 
Fourth: 1,487.7[C]; 
Total: 9,141.5; 
Percentage of total: 10.4. 

Agency: COE; 
First: 0; 
Second: 400.0; 
Third: 2,899.6; 
Fourth: 3,685.9[D]; 
Total: 6,985.5; 
Percentage of total: 8.0. 

Agency: Department of Housing and Urban Development (HUD); 
First: 0; 
Second: 0; 
Third: 11,890.3; 
Fourth: 5,200.0; 
Total: 17,090.3; 
Percentage of total: 19.4. 

Agency: Department of Transportation; 
First: 0; 
Second: 0; 
Third: 2,798.1; 
Fourth: 702.4[E]; 
Total: 3,500.5; 
Percentage of total: 4.0. 

Agency: Department of Education; 
First: 0; 
Second: 0; 
Third: 1,600.0; 
Fourth: 285.0; 
Total: 1,885.0; 
Percentage of total: 2.1. 

Agency: Department of Agriculture (excluding U.S. Forest Service); 
First: 0; 
Second: 0; 
Third: 1,038.1[F, G]; 
Fourth: 132.4; 
Total: 1,170.5; 
Percentage of total: 1.3. 

Agency: Department of Health and Human Services; 
First: 0; 
Second: 0; 
Third: 640.0; 
Fourth: 12.0; 
Total: 652.0; 
Percentage of total: 0.7. 

Agency: Department of Veterans Affairs; 
First: 0; 
Second: 0; 
Third: 592.7; 
Fourth: 585.9[H]; 
Total: 1,178.6; 
Percentage of total: 1.3. 

Agency: Small Business Administration; 
First: 0; 
Second: 0; 
Third: 446.0; 
Fourth: 542.0; 
Total: 988.0; 
Percentage of total: 1.1. 

Agency: DHS (excluding FEMA Disaster Relief Fund); 
First: 0; 
Second: 0; 
Third: 285.1; 
Fourth: 662.0; 
Total: 947.1; 
Percentage of total: 1.1. 

Agency: Department of Justice; 
First: 0; 
Second: 0; 
Third: 229.0; 
Fourth: 8.5; 
Total: 237.5; 
Percentage of total: 0.3. 

Agency: Department of Labor; 
First: 0; 
Second: 0; 
Third: 125.0; 
Fourth: 16.0; 
Total: 141.0; 
Percentage of total: 0.2. 

Agency: Armed Forces Retirement Home; 
First: 0; 
Second: 0; 
Third: 20.8[I]; 
Fourth: 221.0[I]; 
Total: 241.8; 
Percentage of total: 0.3. 

Agency: U.S. Forest Service; 
First: 0; 
Second: 0; 
Third: 57.0; 
Fourth: 20.0; 
Total: 77.0; 
Percentage of total: 0.1. 

Agency: General Services Administration; 
First: 0; 
Second: 0; 
Third: 38.0; 
Fourth: 37.0; 
Total: 75.0; 
Percentage of total: 0.1. 

Agency: Environmental Protection Agency; 
First: 0; 
Second: 0; 
Third: 8.0; 
Fourth: 13.0; 
Total: 21.0; 
Percentage of total: 0.0. 

Agency: Six other agencies; 
First: 0; 
Second: 0; 
Third: 492.7; 
Fourth: 527.0[B, F, J]; 
Total: 1,019.7; 
Percentage of total: 1.2. 

Total; 
First: $10,500.0; 
Second: $51,800.0; 
Third: $5,504.9; 
Fourth: $20,099.8; 
Total: $87,904.7; 
Percentage of total: 100.0%. 

Sources: GAO analysis of Pub. L. No. 109-61, Pub. L. No. 109- 62, Pub. 
L. No. 109-148, and Pub. L. No. 109-234. 

[A] The third emergency supplemental appropriation act rescinded 
approximately $23.4 billion from the $60 billion appropriated to FEMA's 
Disaster Relief Fund in the first two emergency supplemental 
appropriations acts. 

[B] The fourth emergency supplemental appropriation act transferred to 
the Social Security Administration $38 million of the $6 billion 
appropriated to FEMA's Disaster Relief Fund in this act. 

[C] The amount of funding provided to DOD in the fourth emergency 
supplemental appropriation act excludes $169.5 million that was 
rescinded in this legislation. 

[D] The amount of funding provided to COE in the fourth emergency 
supplemental appropriation act excludes $15 million that was rescinded 
in this legislation. 

[E] The amount of funding provided to the Department of Transportation 
was offset by a reduction to the Highway Trust Fund. 

[F] The amount of funding provided to the Department of Commerce in the 
fourth emergency supplemental appropriation act includes $38 million 
transferred from the amount provided to the Department of Agriculture 
in the third emergency supplemental appropriation act. This amount is 
excluded from the funding provided in the third emergency supplemental 
appropriation act. 

[G] The total amount of funding provided to the Department of 
Agriculture in the third emergency supplemental appropriation act 
includes $45 million appropriated to the Department of Agriculture to 
subsidize loans in an amount not to exceed the loan authority limit of 
$1.55 billion. Also, the total includes $404 million of the funds for 
the Department of Agriculture that were designated to be used from the 
funds of the Commodity Credit Corporation, a federal corporation within 
the Department of Agriculture. 

[H] The amount of funding provided to the Department of Veterans 
Affairs in the fourth emergency supplemental appropriation act excludes 
$198.3 million that was rescinded in this legislation. 

[I] The amount of funding provided to the Armed Forces Retirement Home 
in the fourth emergency supplemental appropriation act includes $45 
million transferred from the amount provided to the agency in the third 
emergency supplemental appropriation act. This amount is excluded from 
the funding provided in the third emergency supplemental appropriation 
act. 

[J] The amount of funding provided to the Department of the Interior 
excludes $9 million provided for drought emergency assistance. 

[End of table] 

FEMA Uses Federal Agencies to Provide Assistance on Its Behalf: 

FEMA has authority under the Stafford Act to issue an order, called a 
mission assignment, to other federal agencies. A mission assignment is 
a tasking issued by FEMA that directs other federal agencies and 
components of DHS, or "performing agencies," to support overall federal 
operations pursuant to, or in anticipation of, a Stafford Act 
declaration. Once the mission assignment is issued and approved, the 
mission assignment document is FEMA's basis for obligating the portion 
of FEMA's funds allocated to the assigned relief and recovery effort. 
From a federal agency standpoint, the mission assignment provides the 
recipient agency reimbursable budgetary authority, not the actual 
transfer of funds, to perform the agreed upon work. Among other things, 
mission assignments include a description of work, an estimate of the 
dollar amount of work to be performed, completion date for the work, 
and authorizing signatures. Mission assignments may be issued for a 
variety of tasks, such as search and rescue missions or debris removal, 
depending on the performing agencies' areas of expertise. 

After the agencies perform work under a mission assignment (e.g., 
perform directly or pay a contractor), the agencies bill FEMA, and FEMA 
reimburses them for the work performed using the Intra-Governmental 
Payment and Collection (IPAC) system.[Footnote 13] In the case of an 
IPAC payment to a performing agency, the IPAC funds transfer occurs 
immediately upon request by the agency seeking reimbursement. After the 
IPAC is made, FEMA requires that performing agencies provide it 
documentation supporting the costs incurred while performing the work 
under the mission assignment. FEMA can also reverse or "charge-back" 
the payment if it believes the agency did not provide sufficient 
supporting documentation. The funding and reimbursement process related 
to mission assignments is shown in figure 1. 

Figure 1: Funding and Reimbursement Process Related to FEMA Issuing 
Mission Assignments to Performing Agencies: 

[See PDF for image] 

Source: GAO analysis; GAO photograph; Art Explosion illustration. 

[A] Performing agencies other than COE use the IPAC system. COE must 
submit supporting documentation prior to reimbursement. 

[End of figure] 

The Government Does Not Have a Framework in Place to Collect and 
Consolidate Information to Report on Hurricane-Related Funding: 

The federal government is not adequately tracking and reporting on the 
use of the $88 billion in hurricane relief and recovery funds provided 
thus far to 23 federal agencies in the four emergency supplemental 
appropriations acts. First, FEMA does not have mechanisms in place to 
collect and report on information from the other agencies that are 
performing work on its behalf through mission assignments. As a result, 
FEMA's required weekly reports to the Congress have limited usefulness 
from a governmentwide perspective. Second, also from a governmentwide 
perspective, the federal government does not currently have a framework 
or mechanisms in place to collect and consolidate information from the 
22 federal agencies in addition to FEMA that have directly received 
funding thus far for hurricane relief efforts and report on this 
information. Although each federal agency is responsible for tracking 
the funds it received, obligations incurred, and funds expended through 
it own internal tracking systems, no mechanisms are in place to 
consolidate this information. Therefore, it will be difficult for 
decision makers to determine how much federal funding has been spent 
and by whom, whether more may be needed, or whether too much was 
provided. 

FEMA's Required Reports Do Not Provide Adequate Information from a 
Governmentwide Perspective: 

FEMA is required to report weekly to the Appropriations Committees on 
the use of funds it received; however, these reports do not provide 
timely information from a governmentwide perspective because FEMA does 
not have a mechanism in place to collect and report on information from 
other agencies which perform work on its behalf. Specifically, when 
FEMA tasks another agency through a mission assignment, which is 
similar to an interagency agreement for goods and services, FEMA 
records the entire amount upfront as an obligation on its reports to 
the Congress. The agency performing the task for FEMA does not record 
an obligation until a later date when it has actually obligated funds 
to carry out its mission, thereby overstating reported governmentwide 
obligations. The opposite is true for expenditures. The agency expends 
the funds, but then has to bill FEMA for reimbursement. This may happen 
months after the actual payment is made. FEMA does not record the 
expenditure on its reports to the Congress until it has received the 
bill from the performing agency, reviewed it, and recorded the 
expenditure in its accounting system, thereby understating reported 
governmentwide expenditures. 

FEMA's weekly report as of March 29, 2006, shows that of the $36.6 
billion received as of that date, it had incurred obligations totaling 
$29.7 billion and had made expenditures of $15.9 billion related to 
Hurricanes Katrina, Rita, and Wilma.[Footnote 14] Of the $29.7 billion 
in obligations, FEMA issued mission assignments to federal agencies 
totaling $8.5 billion, or 28.6 percent. The other $21.2 billion 
includes, for example, obligations that FEMA made for areas such as the 
individual and household program ($7.0 billion) and manufactured 
housing ($4.7 billion), which are being reviewed in some respects by 
other auditors. As of March 29, 2006, FEMA reported approximately $8.5 
billion of obligations for mission assignments and approximately $661 
million of expenditures for Hurricanes Katrina, Rita, and Wilma as 
shown in table 2. 

Table 2: Mission Assignment Obligations and Expenditures Reported by 
FEMA for Hurricanes Katrina, Rita, and Wilma, as of March 29, 2006: 

Dollars in millions. 

Agency: COE; 
Obligations reported by FEMA: $4,927.8; 
Expenditures reported by FEMA: $351.6. 

Agency: DOD; 
Obligations reported by FEMA: 1,176.7; 
Expenditures reported by FEMA: 210.0. 

Agency: Department of Transportation; 
Obligations reported by FEMA: 506.8; 
Expenditures reported by FEMA: 45.4. 

Agency: DHS (excluding FEMA); 
Obligations reported by FEMA: 552.6; 
Expenditures reported by FEMA: 8.0. 

Agency: Environmental Protection Agency; 
Obligations reported by FEMA: 366.9; 
Expenditures reported by FEMA: 6.9. 

Agency: Department of Health and Human Services; 
Obligations reported by FEMA: 274.2; 
Expenditures reported by FEMA: 0.0. 

Agency: U.S. Forest Service; 
Obligations reported by FEMA: 365.0; 
Expenditures reported by FEMA: 0.0. 

Agency: General Services Administration; 
Obligations reported by FEMA: 78.7; 
Expenditures reported by FEMA: 0.3. 

Agency: HUD; 
Obligations reported by FEMA: 83.0; 
Expenditures reported by FEMA: 32.4. 

Agency: Department of Justice; 
Obligations reported by FEMA: 55.2; 
Expenditures reported by FEMA: 3.1. 

Agency: Department of Labor; 
Obligations reported by FEMA: 21.6; 
Expenditures reported by FEMA: 0.0. 

Agency: Other agencies; 
Obligations reported by FEMA: 89.0; 
Expenditures reported by FEMA: 3.1. 

Total; 
Obligations reported by FEMA: $8,497.5; 
Expenditures reported by FEMA: $660.8. 

Source: GAO analysis of FEMA Weekly Disaster Relief Finance Report to 
the Appropriations Committees, dated March 29, 2006. 

[End of table] 

FEMA Needs to Clarify Reported Obligations for Work Performed by Other 
Federal Agencies: 

While FEMA reports obligations based on the dollar amount of the 
mission assignments it has placed with other federal agencies when they 
are assigned, these obligation amounts do not represent the amount of 
funds that the agencies have, in turn, actually obligated to perform 
disaster relief work on behalf of FEMA. In some cases, the agencies 
have obligated tens or hundreds of millions of dollars less than the 
amount reported by FEMA. 

Our analysis of FEMA's reported mission assignments to other federal 
agencies to perform work on behalf of FEMA in the amount of $8.5 
billion identified two types of reporting problems, both of which 
resulted in FEMA's obligations being overstated from a governmentwide 
perspective. First, some federal agencies recorded obligations in their 
internal tracking systems that were much less than the amount of 
obligations reported by FEMA. This occurred because FEMA's recorded 
obligations are based on the dollar amount of the entire mission 
assignment. In contrast, the amount of obligations recorded by federal 
agencies is the amount of funds they actually obligated to perform 
disaster relief work. The performing agency does not incur obligations 
until it actually performs or contracts for the work. Four examples of 
this reporting problem follow: 

* On September 28, 2005, FEMA's report showed that obligations on 
mission assignments issued to DOD related to Hurricane Katrina totaled 
about $2.2 billion. As of March 2006, this amount had been 
substantially reduced twice. On November 3, 2005, FEMA amended the 
mission assignment and reduced the amount to about $1.7 billion, and it 
reduced the amount again on March 15, 2006, to about $1.1 billion. 
While FEMA was reporting obligations as high as $2.2 billion during 
this 6-month period, DOD's reports[Footnote 15] show that it incurred 
only $481 million of actual obligations as of April 5, 2006--hundreds 
of millions of dollars less than what FEMA reported over the same 6- 
month period. According to a DOD official, it is currently reviewing 
the mission assignments and will be returning obligational authority 
that was not used to FEMA. 

* On September 28, 2005, FEMA's report showed that obligations on 
mission assignments issued to COE related to Hurricane Katrina were 
about $3.3 billion. Since then, this amount has increased. On October 
20, 2005, FEMA amended and increased the mission assignment amounts to 
about $3.7 billion and on April 5, 2006, to about $4 billion. However, 
according to COE's internal records as of April 7, 2006, it had 
actually obligated about $3 billion for Hurricane Katrina work, a 
difference of over $1 billion. 

* Based on information provided by the Coast Guard, FEMA had recorded 
mission assignment obligations related to Hurricanes Katrina and Rita 
in the amount of nearly $192 million as of April 2006. However, at that 
time, the Coast Guard had only actually incurred about $85 million in 
obligations. Thus, the difference between what FEMA reported to the 
Congress and what Coast Guard information showed it had actually 
obligated is approximately $107 million. 

* Based on information provided by the Department of Housing and Urban 
Development (HUD), at the end of March 2006, FEMA had obligated and 
reported approximately $83 million for HUD mission assignments related 
to Hurricane Katrina. However, HUD had only incurred about $47 million 
in obligations for work to be done under mission assignments. While HUD 
may eventually utilize the full amount obligated by FEMA, at that time, 
there was an approximately $36 million difference between the amounts 
FEMA reported as obligated for HUD and what HUD had actually obligated. 
HUD expects final reconciliation to be completed by December 2006. 

Second, at least three federal agencies we interviewed did not have 
mission assignments recorded in their internal tracking systems that 
were recorded in FEMA's system. According to the officials from certain 
federal agencies, this occurred because the agency's financial 
management office was not informed of the mission assignments. FEMA 
officials informed us that this problem likely occurred because, while 
the agencies' program offices appropriately received mission assignment 
information from FEMA, those agencies' program offices did not properly 
provide the information to their agencies' financial management 
offices. Two examples of this reporting problem follow: 

* At the Department of Health and Human Services, we noted $90 million 
in mission assignment obligations related to Hurricane Katrina or 
amendments to those obligations that were reported by FEMA as of 
January 18, 2006, but not recorded by the department's financial 
management office as of February 24, 2006. The department told us that 
these mission assignments or amendments had been issued by FEMA, but 
had not been received by the department's program or financial 
management offices. After we pointed out the discrepancies, the two 
agencies reconciled the differences. 

* In another case, the Environmental Protection Agency had a similar 
situation involving $11.5 million in mission assignments and amendments 
related to Hurricane Katrina for which it did not record obligations as 
of March 2006 because the financial management office was unaware the 
mission assignments had been made by FEMA. According to the 
Environmental Protection Agency, for $10 million of the $11.5 million 
in mission assignments, not only was the financial management office 
unaware but the agency had never been informed that the mission 
assignment had been issued by FEMA. 

FEMA's Reports Do Not Provide Adequate Information on Actual 
Expenditures Made by Other Federal Agencies: 

A different set of issues arises with regard to expenditure data. 
Because of the nature and timing of payments FEMA makes to performing 
agencies, FEMA's reported expenditures from the Disaster Relief Fund do 
not present an accurate status of federal spending for hurricane relief 
and recovery from a governmentwide perspective. This is explained in 
part by problems with the timeliness and adequacy of billings to FEMA 
by other agencies. As previously explained, FEMA reimburses performing 
agencies for work they perform on behalf of FEMA in accordance with the 
mission assignment agreements. FEMA requires that performing agencies 
(1) bill it within 90 days after completion or upon termination of a 
mission assignment, and (2) provide a certain level of documentation 
for its review in order for the billings to be approved. FEMA does not 
recognize reimbursements to other agencies as expenditures in its 
accounting system (and therefore in its reports to the Congress) until 
this approval has occurred. From a governmentwide perspective, this 
process results in FEMA's expenditures being understated. 

As of March 29, 2006, FEMA reported about $661 million of expenditures 
to agencies performing mission assignments for Hurricanes Katrina, 
Rita, and Wilma (see table 2). However, performing agencies' internal 
tracking systems showed a significantly higher level of expenditures on 
their mission assignments. The process FEMA uses for reimbursing 
performing agencies creates timing differences between FEMA's and the 
performing agencies' records. As a result, FEMA's reported expenditures 
are less than actual expenditures performing agencies have made in 
support of FEMA's hurricane relief and recovery efforts. In the case of 
a mission assignment, a performing agency would recognize an 
expenditure when that agency pays costs (liquidates obligations) to 
employees, contractors, or other outside entities for work performed. 
However, FEMA does not recognize the reimbursement of these costs as an 
expenditure until it has reviewed and approved a bill from the 
performing agency. With the exception of COE, reimbursements to the 
performing agencies are made using the IPAC system. While the IPAC 
funds transfer occurs immediately upon request by the agency seeking 
reimbursement, in FEMA's accounting records the IPAC transaction would 
be reflected as a suspense account transaction until FEMA has received 
and approved the supporting documentation for the IPAC billing. 
Therefore, by virtue of the timing delays, FEMA's reported expenditures 
would be less than expenditures made and reported by performing 
agencies and a user of FEMA's report could incorrectly infer that a 
particular agency has received tasks from FEMA but has not spent any of 
the funds. Thus, the cost of actual work performed is better reflected 
by the performing agencies. Two examples follow: 

* FEMA's report as of March 29, 2006, showed that approved mission 
assignment expenditures (cash reimbursements) related to Hurricane 
Katrina were about $210 million for DOD. However, DOD's report as of 
April 5, 2006, showed that it had already received $324 million in 
reimbursement from FEMA for mission assignments related to Hurricane 
Katrina.[Footnote 16] 

* The U.S. Forest Service had not billed FEMA for any of its work done 
under mission assignments even though the agency reported that it had 
made close to $170 million in expenditures related to its Hurricane 
Katrina mission assignments as of January 31, 2006. Accordingly, FEMA 
reported no expenditures for this agency in its weekly report since 
FEMA had not yet approved any billings. FEMA's billing instructions 
state that reimbursement requests can be forwarded to FEMA monthly, 
regardless of the amount. Also, agencies should submit the final bill 
no later than 90 days after completion or upon termination of the 
mission assignment. The Forest Service, however, was not doing this, 
and as a result, FEMA did not report any expenditures for mission 
assignment work performed by the Forest Service as of March 29, 2006, 
even though the Forest Service had spent about $170 million. The Forest 
Service explained that it billed FEMA in March and June 2006 and 
planned to issue additional bills in August and September 2006. We 
noted that there had been some billing activity reported by FEMA 
subsequent to March 29, 2006. 

Aside from the timing issues discussed above, some performing agencies 
have not provided billing documentation that meets FEMA's requirements 
to support their reimbursements for work performed on mission 
assignments. Although performing agencies using the IPAC system receive 
funds immediately upon requesting reimbursement, if upon review of 
supporting reimbursement documents, FEMA officials determine that some 
amounts are incorrect or unsupported, FEMA may retrieve or "charge 
back" the monies from these agencies through the IPAC system. For 
example, travel charges should be supported by a breakdown by object 
class with names, period of performance dates, and amounts. Failure to 
submit this documentation may result in FEMA charging back the agency 
for the related mission assignment billing. FEMA's records as of May 
15, 2006, showed that FEMA had "charged back" about $267 million from 
performing agencies for costs billed to FEMA for mission assignments 
related to Hurricanes Katrina, Rita, and Wilma. About $260 million, or 
over 97 percent, of these charge-backs involved five agencies: the 
Department of Transportation ($102 million), DOD ($57 million), the 
Environmental Protection Agency ($45 million), the Federal Protective 
Service within DHS ($32 million), and the Department of Health and 
Human Services ($24 million). Consistent with its practice of only 
reporting approved expenditures, these amounts were not recognized as 
expenditures by FEMA, even though the performing agencies claim they 
have expended those amounts. In addition, until FEMA requested the 
charge-backs, the billings would have been in a FEMA suspense account, 
and would have temporarily depleted monies from the Disaster Relief 
Fund since the agencies had already received reimbursement through the 
IPAC system. At least one agency, DOD, has indicated that it is trying 
to gather additional supporting documentation for the $57 million that 
FEMA charged back. Therefore, at least part of these charged back funds 
may be reported as expenditures by FEMA at some point in the future. If 
the agency cannot provide FEMA the needed supporting documentation, the 
agency may not be reimbursed and thus will be required to use its own 
appropriations. 

FEMA is also experiencing billing problems with COE, which does not use 
the IPAC system. According to FEMA personnel, COE had billing and 
documentation problems in the past and was not permitted to use the 
IPAC system for transactions with DHS. While COE was working on gaining 
access to using the IPAC system prior to Hurricane Katrina, this 
process was put on hold, and instead COE must manually submit 
supporting documentation before FEMA reimburses its mission assignment 
costs. This allows for a thorough review by FEMA, but has also led to 
payment delays. As of February 6, 2006, COE's internal accounts 
receivable report showed that it had not received reimbursement for 
about $1.2 billion of bills submitted to FEMA for Hurricane Katrina 
mission assignments even though COE officials stated that they had sent 
documentation supporting the majority of the bills. Of that amount, 
about $610 million, or over half of the total, was over 60 days old. 
According to FEMA officials, as of April 7, 2006, it had not received 
documentation supporting about $800 million of the $1.2 billion of 
outstanding accounts receivable on COE's records. None of the $1.2 
billion has been reported as expenditures by FEMA, although COE reports 
these amounts as expenditures. 

Lack of Framework to Collect and Consolidate Agency Data and Report on 
This Information Limits Ability to Assess Status of Hurricane Funding: 

From a governmentwide perspective, since Hurricane Katrina made 
landfall, about $88 billion through four emergency supplemental 
appropriations has been appropriated to 23 federal agencies. We found 
that no one agency or central collection point exists to compile and 
report on how these funds are being spent. Without a framework and 
mechanisms in place to collect and consolidate information from these 
agencies and report on a periodic basis, decision makers will not have 
complete and consistent information on the uses of the funding that has 
been provided thus far. Information on the amount of obligations and 
expenditures[Footnote 17] made on the actual relief and recovery effort 
would provide decision makers information they can use to determine, 
for example, if (1) additional funds should be provided for the relief 
and recovery work, (2) the funds already provided could be deemed 
excess and used for other disaster relief and recovery work, (3) funds 
should be rescinded, or (4) duplicate programs are providing similar 
assistance. As a result, in order to have governmentwide information on 
actual obligations incurred and expenditures made on the relief and 
recovery effort, the agencies would have to use their own internal 
tracking systems to extract this information and provide the 
information to a central point, where the data could be consolidated 
and reported. The ability to separately track and report on these funds 
is important to help ensure better accountability and clearly identify 
the status of funding provided in direct response to these hurricanes 
at both the individual federal agency level as well as the 
governmentwide level and to provide additional transparency so that 
hurricane victims, affected states, as well as American taxpayers, know 
how the government is spending these funds. At the same time, we 
recognize the substantial challenge in balancing the need to get money 
out quickly to those who are actually in need and sustaining public 
confidence in disaster programs by taking all possible steps to 
minimize fraud and abuse. 

Although each federal agency is responsible for tracking the funds it 
received, obligations incurred, and funds expended through its own 
internal tracking systems, no mechanisms are in place to consolidate 
and report on this information. Of the approximately $88 billion 
provided as of June 2006, FEMA received about $42.6 billion ($66 
billion appropriated less the $23.4 billion rescinded) for the Disaster 
Relief Fund and 22 other agencies received the remaining $45.4 billion. 
Once these funds are appropriated, they are merged into, and commingled 
with existing appropriation accounts.[Footnote 18] OMB Circular No. A- 
11[Footnote 19] requires agencies to report obligations and outlays on 
a quarterly basis at the appropriation level; however, those reports on 
budget execution and budgetary resources do not call for separately 
identifying amounts on a programmatic basis, such as hurricane relief 
and recovery efforts. Thus, reporting under this Circular will not 
provide the information needed to monitor the status of hurricane- 
related funding. Although FEMA was required to provide weekly reports 
to the Congress on obligation and expenditure information on the $42.6 
billion it received (although with limited usefulness as discussed 
previously), most of the other 22 agencies that received over $45 
billion would only be responsible for tracking this information 
internally. 

While there are some reporting requirements included in the emergency 
supplemental appropriation acts, overall reporting requirements differ 
greatly. Also, the reporting requirements do not call for consolidating 
information on obligations and expenditures on a governmentwide basis 
and, therefore, do not facilitate governmentwide reporting on hurricane-
related spending. The reporting requirements that were included for the 
various agencies ranged from very detailed reporting to no reporting at 
all. For example, while FEMA was required to report obligations and 
expenditures, 16 other federal agencies did not have any reporting 
requirements. See appendix II for more information on the reporting 
requirements included in the first four emergency supplemental 
appropriations acts. 

Given that consolidated governmentwide reporting will require that 
financial information be compiled from 23 different agencies, an entity 
that regularly collects and compiles information from different 
agencies, such as OMB or the Department of the Treasury, would likely 
be in the best position for requesting this information and preparing 
consolidated governmentwide reporting on hurricane-related funding. 
Other options would be for either FEMA or the Office of the Federal 
Coordinator for Gulf Coast Rebuilding[Footnote 20] to compile this 
information. 

Conclusions: 

Success in the rebuilding efforts of the Gulf Coast area is critical. 
The federal government has already invested billions of dollars for 
this effort with more likely to come. Although FEMA is required to 
report on obligations and expenditures, these reports do not provide 
timely information from a governmentwide perspective. In addition, 
there is no framework or mechanisms in place to collect and consolidate 
information, and to report on the $88 billion in hurricane relief and 
recovery funds provided thus far to 23 federal agencies in the four 
emergency supplemental appropriations acts on a governmentwide basis. 
The government's progress in the rebuilding efforts will be difficult 
to measure if decision makers do not know how much has been spent, what 
for, how much has been obligated but not yet spent, and how much more 
is still available. Without consistent, reliable, and timely 
governmentwide information on the use of this funding, the agencies and 
the Congress could lose visibility over these funds and not know the 
extent to which they are being used to support hurricane relief and 
recovery efforts. With rebuilding efforts likely to take many years, it 
is important that the federal government fulfill its role as steward of 
taxpayer funds and provide transparency to the affected states and 
victims, and account for and report on all funds received for the 
hurricane-related efforts. 

Recommendations for Executive Action: 

To improve the information on the status of hurricane relief and 
recovery funds provided in FEMA's weekly reports to the Appropriations 
Committees from a governmentwide perspective, we recommend that the 
Secretary of Homeland Security direct the Director of FEMA to take the 
following four actions: 

* Explain in the weekly reports how FEMA's reported obligations and 
expenditures for mission assignments do not reflect the status from a 
governmentwide perspective. 

* On an established basis (e.g., monthly or quarterly), request and 
include actual obligation and expenditure data from agencies performing 
mission assignments. 

* Include in the weekly report amounts reimbursed to other agencies 
that are in suspense because FEMA has not yet reviewed and approved the 
documentation supporting the expenditures. 

* Reiterate to agencies performing mission assignments its policies on 
(1) the detailed information required in supporting documentation for 
reimbursements, and (2) the timeliness of agency billings. 

To help ensure better accountability, provide additional transparency, 
and clearly identify the status of the hurricane-related funding 
provided by emergency supplemental appropriations at both the 
individual federal agency level as well as the governmentwide level, we 
recommend that the Director, Office of Management and Budget, establish 
a framework for governmentwide reporting on the status of the hurricane-
related funding. OMB could either collect and consolidate this 
information itself or designate another appropriate agency, such as the 
Department of the Treasury, to do so and report to the Appropriations 
Committees on a periodic basis. 

Agency Comments and Our Evaluation: 

We requested comments on a draft of this report from the Secretary of 
Homeland Security and the Director of OMB. These comments are reprinted 
in appendixes III and IV, respectively. While DHS concurred with our 
recommendations, it also stated that it believes our recommendation to 
periodically request and include actual obligation and expenditure data 
from agencies performing mission assignments is subsumed by our 
recommendation to OMB to establish a framework for governmentwide 
reporting on the status of hurricane-related funding. We believe our 
recommendation is still valid for FEMA since, as stated in the agency's 
response, its mission assignments are a significant component in the 
establishment of a framework for governmentwide reporting on the status 
of hurricane-related funding. However, as the intent of our 
recommendation is to help ensure the Congress is receiving complete, 
timely, useful, and reliable reports, we agree that other alternatives 
could be considered to achieve the same objectives. OMB agreed that 
there should be clear accountability and transparency on the spending 
of emergency funds for hurricane relief and indicated it will fully 
consider our recommendation to establish a new framework for 
governmentwide reporting on the status of disaster-related funding. 

We also provided excerpts of the report to those agencies cited in 
examples for their review. They provided technical comments, and we 
made revisions as appropriate. 

We are sending copies of this report to other interested congressional 
committees and to affected federal agencies. Copies will be made 
available to others upon request. In addition, this report will also be 
available at no charge on GAO's home page at [Hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-9095 or at williamsm1@gao.gov. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. GAO staff who made contributions 
to this report are listed in appendix V. 

Signed by: 

McCoy Williams: 
Director, Financial Management and Assurance: 

List of Committees: 

The Honorable Susan M. Collins: 
Chairman: 
The Honorable Joseph I. Lieberman: 
Ranking Minority Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Tom Coburn: 
Chairman: 
The Honorable Thomas R. Carper: 
Ranking Minority Member: 
Subcommittee on Federal Financial Management, Government Information, 
and International Security: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Peter T. King: 
Chairman: 
The Honorable Bennie G. Thompson: 
Ranking Minority Member: 
Committee on Homeland Security: 
House of Representatives: 

The Honorable Tom Davis: 
Chairman: 
The Honorable Henry A. Waxman: 
Ranking Minority Member: 
Committee on Government Reform: 
House of Representatives: 

The Honorable Martin Olav Sabo: 
Ranking Minority Member: 
Subcommittee on Homeland Security: 
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine whether the federal government was tracking and reporting 
on the use of funding provided in the four emergency supplemental 
appropriations acts, we obtained and analyzed the four emergency 
supplemental appropriation documents and conference reports. We also 
obtained the reports prepared by the Federal Emergency Management 
Agency (FEMA) and the Army Corps of Engineers (COE) in response to the 
second emergency supplemental appropriation act. We did not obtain the 
reports required by the third or fourth emergency supplemental 
appropriations acts since this was a new requirement for the federal 
agencies. In addition, we obtained and analyzed guidance on reporting 
of estimates of hurricane-related funding budget authority, outlays, 
and receipts, issued by the Office of Management and Budget (OMB) in 
2005 and discussed this guidance with officials from OMB. 

To determine whether FEMA's reports to the Appropriations Committees 
required by the second emergency supplemental appropriation act 
provided timely and useful information, we obtained and analyzed the 
weekly reports prepared by FEMA, specifically focusing on the 
obligations and expenditures reported for mission assignments to 
agencies performing disaster relief work related to Hurricane Katrina 
on behalf of FEMA because they have governmentwide implications. We met 
with FEMA officials to discuss (1) the definitions of the terms 
obligations and expenditures used in the report, (2) the process of 
FEMA issuing mission assignments to agencies and the obligation of 
FEMA's funds related to the mission assignments, and (3) the process of 
agencies seeking reimbursement for goods and services provided in 
response to the disaster relief work including FEMA's billing 
procedures. We also obtained and analyzed certain federal agencies' 
reports that provide information on mission assignments, obligations 
incurred and expenditures made in performing disaster relief work on 
behalf of FEMA, amount of bills submitted to FEMA, and amount of bills 
paid by FEMA. Because the majority of FEMA's mission assignment 
obligations related to Hurricane Katrina, we focused our review at the 
agencies on the Hurricane Katrina mission assignments. We met with 
officials from certain federal agencies to discuss the information 
contained in these reports. 

In performing our work, we obtained information from the: 

* OMB, 
* Department of the Treasury, 
* FEMA, 
* Department of Defense, 
* COE, 
* Department of Transportation, 
* Environmental Protection Agency, 
* Department of Health and Human Services, 
* U.S. Forest Service, 
* General Services Administration, and: 
* Department of Housing and Urban Development. 

To assess the reliability of the data, we interviewed officials 
knowledgeable about the data and determined that the data were 
sufficiently reliable for the purposes of this report. We conducted our 
work from October 2005 through June 2006 in accordance with generally 
accepted government auditing standards. 

We provided a draft of this report to the Department of Homeland 
Security (DHS) and OMB for comment. DHS and OMB provided written 
comments, which are presented in the Agency Comments and Our Evaluation 
section of this report and are reprinted in appendixes III and IV, 
respectively. We also provided excerpts of the report to those agencies 
cited in examples for their review. They provided technical comments, 
and we made revisions as appropriate. 

[End of section] 

Appendix II: Reporting Requirements Included in the Four Emergency 
Supplemental Appropriations Acts: 

The four emergency supplemental appropriations acts enacted as of June 
2006 provided funds to 23 federal agencies[Footnote 21] for the 
hurricane relief and recovery effort and included different reporting 
requirements. In addition, of the 23 agencies receiving appropriations 
in the four emergency supplemental appropriations acts, 16 agencies did 
not have any reporting requirements. 

The first two emergency supplemental appropriations acts[Footnote 22] 
provided funding to the Federal Emergency Management Agency (FEMA), 
Department of Defense (DOD), and Army Corps of Engineers (COE), and 
included the following reporting requirements: 

* The first emergency supplemental appropriation act did not contain 
any requirements for FEMA to report on the $10 billion it received. The 
second emergency supplemental appropriation act required the Secretary 
of Homeland Security to provide, at a minimum, a weekly report to the 
Appropriations Committees detailing the allocation and obligation of 
the $50 billion in appropriated funds it received for Hurricane Katrina 
in the second emergency supplemental appropriation act. The fiscal year 
2006 Department of Homeland Security Appropriations Act[Footnote 23] 
further explained that this weekly report was to include other 
information such as obligations, allocations, and expenditures, 
categorized by agency and state. 

* COE was not provided any funding in the first emergency supplemental 
appropriation. The second emergency supplemental appropriation act 
required COE to provide a weekly report to the Appropriations 
Committees detailing the allocation and obligation of $400 million in 
appropriated funds it received under that act. 

* There was no requirement for DOD to report on the $1.9 billion it 
received in the first and second emergency supplemental appropriations 
acts. 

The third emergency supplemental appropriation act provided $29 billion 
directly to 20 individual federal agencies and rescinded approximately 
$23.4 billion from the amount initially appropriated to FEMA's Disaster 
Relief Fund in September 2005. The third emergency supplemental 
appropriation act included differing reporting requirements for each of 
the 20 federal agencies ranging from none to very detailed. 
Illustrative examples from the third emergency supplemental 
appropriation act and the conference report[Footnote 24] accompanying 
this legislation include the following specific reporting requirements: 

* The third emergency supplemental appropriation act required each 
state receiving monies through the Community Development Fund from the 
Department of Housing and Urban Development (HUD) to report quarterly 
to the Appropriations Committees for all awards and uses of funds. The 
supplemental appropriation language also required some additional 
reporting from HUD, such as reporting quarterly to the Appropriations 
Committees with regard to all steps taken to prevent fraud and abuse of 
funds made available. 

* The conference report accompanying the third emergency supplemental 
appropriation act directed the Secretary of Defense to submit quarterly 
reports to the congressional defense committees including, among other 
things, the expenditures of funds it received for hurricane relief and 
recovery operations. This did not include retroactive requirements for 
the first and second emergency supplemental appropriations. The 
conference report also directed the Secretary of Agriculture to provide 
quarterly reports including, among other things, the expenditures of 
funds received for hurricane relief. It also requested the Department 
of Education to submit a report by March 1, 2006, on the obligation and 
allocation of funds it received for hurricane relief and provided to 
assist college students under the Higher Education Act. The reporting 
requirements for some agencies were more detailed than others. Also, 
these reporting requirements do not cover funding authority of 
approximately $8.5 billion that agencies received through FEMA's 
mission assignment process for Hurricanes Katrina, Rita, and Wilma as 
of March 29, 2006. 

The fourth emergency supplemental appropriation act provided 
approximately $20.1 billion directly to 22 individual federal agencies. 
This legislation did not include any new reporting requirements for the 
agencies receiving funding; however, the act contained reporting 
requirements for HUD that were consistent with the requirements 
outlined in the third emergency supplemental appropriation act. 

[End of section] 

Appendix III: Comments from the Department of Homeland Security: 

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

August 30, 2006: 

Mr. McCoy Williams: 
Director Financial Management and Assurance: 
Government Accountability Office: 
Washington, DC 20548: 

Re: GAO-06-834 Disaster Relief: Government wide Framework Needed to 
Collect and Consolidate Information to Report on Billions in Federal 
Funding for the 2005 Gulf Coast Hurricanes. 

Thank you for the opportunity to review the draft report. The following 
represents the Department of Homeland Security response to the 
recommendations contained in GAO's draft report. 

FEMA agrees with the GAO conclusions that its reports on the status of 
hurricane relief and recovery funds provided to the Appropriations 
Committees do not reflect a governmentwide perspective and the GAO 
recommendations to improve the information reported. It should be noted 
that FEMA as an organization does not have a governmentwide reporting 
role of the nature envisioned by GAO; thus it is understandable why its 
reports would reflect information from just its accounting system. 
While we agree with the intent of Recommendation 2, we believe it is 
best addressed to OMB. 

Recommendation: 

Explain in the weekly reports how FEMA's reported obligations and 
expenditures for mission assignments do not reflect the status from a 
governmentwide perspective. 

Response: Concur. FEMA will provide language in its reports to the 
Appropriations Committees to explain that the financial information 
reflects what is recorded in FEMA's records and not the obligations and 
expenditures shown in the performing agencies records. 

Recommendation: 

On an established basis (e.g., monthly or quarterly), request and 
include actual obligation and expenditure data from agencies performing 
mission assignments. 

Response: Generally concur. FEMA believes that Recommendation 2 is 
subsumed by Recommendation 5 where GAO recommends that the Director, 
Office of Management and Budget (OMB) establish a framework for 
government wide reporting on the status of the hurricane-related 
funding. FEMA and the agencies performing its mission assignments are 
significant components in the establishment of a framework for 
governmentwide reporting on the status of hurricane-related funding. 
Given this, we believe that the creation of the data collection, 
consolidation, and reporting process and policy should include and 
involve all federal agencies involved with the funding. 

As a separate DHS element FEMA has its own accounting system and as GAO 
has clearly presented, it has reported information it is required to 
record in its system to the Appropriation Committees weekly -but this 
information does not reflect a governmentwide perspective. FEMA will 
work with OMB or its designee to establish the reporting framework that 
GAO is recommending. 

Recommendation: 

Include in the weekly report amounts reimbursed to other agencies that 
are in suspense because FEMA has not yet reviewed and approved the 
documentation supporting the expenditures. 

Response: Concur. FEMA will alter its reporting to include amounts in 
suspense. 

Recommendation: 

Reiterate to agencies performing mission assignments its policies on 
(1) the detailed information required in supporting documentation for 
reimbursements, and (2) the timeliness of agency billings. 

Response: Concur. FEMA will remind agencies performing mission 
assignments about its policies regarding supporting documentation and 
timeliness of agency billings. 

Sincerely, 

Signed by: 

Steven J. Pecinovsky: 
Director: 
Departmental GAO/OIG Liaison Office: 

[End of section] 

Appendix IV: Comments from the Office of Management and Budget: 

The Controller: 
Executive Office Of The President: 
Office Of Management And Budget: 
Washington D. C. 20509: 

AUG 31 2Q06: 

Mr. McCoy Williams: 
Director, Financial Management and Assurance: 
United States Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Williams: 

 Thank you for the opportunity to review and comment on the Government 
Accountability Office (GAO) draft report GAO-06-834, Governmentwide 
Framework Needed to Collect and Consolidate Information to Report on 
Billions in Federal Funding for the 2005 Gulf Coast Hurricanes. 

 The Office of Management and Budget (OMB) agrees that there should be 
clear accountability and transparency on the spending of the funds 
provided by emergency supplemental appropriations for the hurricane 
relief efforts. This transparency is vital to assuring those 
individuals directly affected by the hurricanes, and the American 
taxpayers, that the appropriated funds were spent appropriately for 
hurricane relief efforts, and provided in a timely manner. 

OMB has been monitoring the use of the appropriated funds, as part of 
our oversight role of Federal spending, and will continue monitoring 
throughout the recovery and reconstruction of the Gulf Coast. 
Specifically, OMB has collected data on agency obligations and outlays 
related to Katrina supplemental funding and plans to issue periodic 
updates on the status of these funds. In addition, we will fully 
consider GAO's recommendation to establish a new framework for 
government-wide reporting on the status of disaster-related funding. 

Again, we appreciate the opportunity to respond to this report. If you 
have any additional questions or comments, please feel free to contact 
Danny Werfel in the Office of Federal Financial Management at 202-395-
3993. 

Sincerely, 

Signed by: 

Linda M. Combs: 
Controller: 

[End of section] 

Appendix V GAO Contact and Staff Acknowledgments: 

GAO Contact: 

McCoy Williams, (202) 512-9095 or williamsm1@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, the following individuals also 
made significant contributions to this report: Christine Bonham, 
Richard Cambosos, Thomas Dawson, Francine DelVecchio, Heather Dunahoo, 
Abe Dymond, Gabrielle Fagan, Casey Keplinger, Stephen Lawrence, Greg 
Pugnetti, Lori Ryza, and Natalie Schneider. Other contributions were 
made by Felicia Brooks, Eric Essig, Lauren Fassler, Barry Grinnell, 
John Hong, James Maziasz, Patrick McCray, Shalin Pathak, and Chanetta 
Reed. 

FOOTNOTES 

[1] Pub. L. No. 109-61, 119 Stat. 1988 (Sept. 2, 2005); Pub. L. No. 109-
62, 119 Stat. 1990 (Sept. 8, 2005); Pub. L. No. 109-148, div. B, 119 
Stat. 2680, 2745 (Dec. 30, 2005); and Pub. L. No. 109-234, title II, 
120 Stat. 443, 474 (June 15, 2006). Other funding has been provided, 
but it was not included in the emergency supplemental appropriations. 

[2] 42 U.S.C. §§ 5121-5206. The Stafford Act authorizes federal 
agencies to take actions such as disaster response, recovery, and 
mitigation assistance to supplement state and local efforts once the 
President has issued a major disaster declaration. The Federal 
Emergency Management Agency (FEMA), within the Department of Homeland 
Security (DHS), is responsible for administering the major provisions 
of the Stafford Act. 

[3] The NRP is intended to be an all-discipline, all-hazards plan that 
establishes a single, comprehensive framework for the management of 
domestic incidents. It provides the structure and mechanisms for the 
coordination of federal support to state, local, and tribal incident 
managers and for exercising direct federal authorities and 
responsibilities. 

[4] FEMA prepares these weekly reports and forwards them to DHS for 
transmittal. For purposes of this report, we consider this to be a 
reporting requirement for FEMA. 

[5] FEMA's weekly reports were posted on the House Appropriations 
Committee's website at http://appropriations.house.gov/_files/ 
HurricaneKatrinaLink.htm (downloaded May 25, 2006). 

[6] For purposes of this report, we are considering the Department of 
Agriculture and the U.S. Forest Service two separate agencies because 
the Forest Service received a large portion of the mission assignments 
for the Department of Agriculture. We are also considering the 
Department of Defense (DOD) and the Army Corps of Engineers (COE) two 
separate agencies because of the large portion of the total mission 
assignments they each received as well as the fact that COE does not 
use the Intra-Governmental Payment and Collection (IPAC) system. In 
addition, for purposes of this report, we are considering FEMA's 
Disaster Relief Fund separate from other DHS appropriations because of 
the specific function of the Disaster Relief Fund for Stafford Act 
activities. 

[7] See GAO, Agency Management of Contractors Responding to Hurricanes 
Katrina and Rita, GAO-06-461R (Washington, D.C.: Mar. 16, 2006); GAO, 
Hurricane Katrina: Comprehensive Policies and Procedures Are Needed to 
Ensure Appropriate Use of and Accountability for International 
Assistance, GAO-06-460 (Washington, D.C.: Apr. 6, 2006); GAO, Expedited 
Assistance for Victims of Hurricanes Katrina and Rita: FEMA's Control 
Weaknesses Exposed the Government to Significant Fraud and Abuse, GAO-
06-655 (Washington, D.C.: June 16, 2006); and GAO, Hurricane Katrina: 
Better Plans and Exercises Needed to Guide the Military's Response to 
Catastrophic Natural Disasters, GAO-06-643 (Washington, D.C.: May 15, 
2006). 

[8] Pub. L. No. 109-62, 119 Stat. 1990, 1991-1992 (Sept. 8, 2005). The 
act required the Secretary of Homeland Security to provide, at a 
minimum, a weekly report detailing the allocation and obligation of 
appropriations made under the act. 

[9] A mission assignment is a tasking issued by FEMA, directing other 
federal agencies and components of DHS, or "performing agencies," to 
perform work on its behalf to respond to a Stafford Act event under the 
NRP. 

[10] 6 U.S.C. § 317(a)(1). 

[11] Pub. L. No. 109-61, 119 Stat. 1988 (Sept. 2, 2005) and Pub. L. No. 
109-62, 119 Stat. 1990 (Sept. 8, 2005). These two emergency 
supplemental appropriations were to meet immediate needs arising from 
the consequences of Hurricane Katrina for the fiscal year ending 
September 30, 2005. 

[12] Pub. L. No. 109-148, div. B, 119 Stat. 2680, 2745 (Dec. 30, 2005). 
This emergency supplemental appropriation was to address hurricanes in 
the Gulf of Mexico for the fiscal year ending September 30, 2006. 

[13] The IPAC system, a collection system operated by the Department of 
the Treasury, is one of the major components of the Government On-Line 
Accounting Link System II. The IPAC application's primary purpose is to 
provide a standardized interagency fund transfer mechanism. IPAC 
facilitates the intragovernmental transfer of funds. Performing 
agencies, except for COE, use the IPAC system. 

[14] Although FEMA's weekly report presents information on Hurricanes 
Katrina, Rita, and Wilma, because the majority of FEMA's mission 
assignment obligations related to Hurricane Katrina, we focused our 
review at the performing agencies on the Hurricane Katrina mission 
assignments. 

[15] DOD's report showed that it had obligated a total of $638 million 
as of April 5, 2006. However, $157 million of the $638 million was for 
FEMA-requested work not formally ordered through a mission assignment. 

[16] DOD's report showed that it received a total of about $481 million 
from FEMA as of April 5, 2006. However, $157 million of the $481 
million was for FEMA requested work not formally ordered through a 
mission assignment. 

[17] An expenditure is an outlay. Generally, an outlay is the issuance 
of checks, disbursement of cash, or electronic transfer of funds made 
to liquidate a federal obligation. 

[18] Unless otherwise specified by law, emergency supplemental 
appropriations are merged into, and commingled with existing 
appropriation accounts. This was the case for the four emergency 
supplemental appropriations acts enacted thus far. 

[19] OMB Circular No. A-11, Preparation, Submission, and Execution of 
the Budget (revised June 2006). 

[20] The Office of the Federal Coordinator for Gulf Coast Rebuilding is 
responsible for developing a long-term rebuilding plan for the region 
in the aftermath of Hurricanes Katrina, Rita, and Wilma; coordinating 
the federal efforts; and helping state and local officials reach 
consensus on their vision for the region. 

[21] For purposes of this report, we are considering the Department of 
Agriculture and the U.S. Forest Service two separate agencies because 
the Forest Service received a large portion of the mission assignments 
for the Department of Agriculture. We are also considering the 
Department of Defense (DOD) and the Army Corps of Engineers (COE) two 
separate agencies because of the large portion of the total mission 
assignments they each received as well as the fact that COE does not 
use the Intra-Governmental Payment and Collection (IPAC) system. In 
addition, for purposes of this report, we are considering FEMA's 
Disaster Relief Fund separate from other Department of Homeland 
Security (DHS) appropriations because of the specific function of the 
Disaster Relief Fund for Stafford Act activities. 

[22] Pub. L. No. 109-61 and Pub. L. No. 109-62. 

[23] Pub. L. No. 109-90, 119 Stat. 2090 (Oct. 18, 2005). 

[24] See H.R. Conf. Rep. No. 109-359, Div. B, at 488 (Dec. 18, 2005). 

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