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Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction's Capability to Respond and Recover on Its Own

GAO-12-838 Published: Sep 12, 2012. Publicly Released: Sep 12, 2012.
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Highlights

What GAO Found

During fiscal years 2004-2011, the President received governors' requests for 629 disaster declarations and approved 539, or 86 percent, of which the Federal Emergency Management Agency (FEMA) reported 71 percent were for severe storms. For these 539 declarations, FEMA obligated $80.3 billion, or an average of about $10 billion a year, from the Disaster Relief Fund (DRF), as of January 31, 2012. Almost half of the obligations were for Hurricane Katrina; excluding obligations for Hurricane Katrina, FEMA obligated $40.6 billion, or an average of about $5 billion a year. As of January 31, 2012, FEMA anticipated that when all 539 declarations are closed, total DRF obligations will be about $91.5 billion. GAO's analysis shows that FEMA primarily relied on a single criterion, the per capita damage indicator, to determine whether to recommend to the President that a jurisdiction receive public assistance (PA) funding. However, because FEMA's current per capita indicator, set at $1 in 1986, does not reflect the rise in (1) per capita personal income since it was created in 1986 or (2) inflation from 1986 to 1999, the indicator is artificially low. The indicator would be $3.57 in 2011 had it been adjusted for increases in per capita income and $2.07 in 2012 had it been adjusted for inflation from 1986 to 1999, rather than its current $1.35. GAO's analysis of FEMA's anticipated obligations for 508 declarations with PA during fiscal years 2004-2011 shows that 44 percent and 25 percent would not have met the indicator if it had been adjusted for increases in personal income and inflation, respectively, since 1986. Further, the per capita indicator does not accurately reflect a jurisdiction's capability to respond to or recover from a disaster without federal assistance. GAO identified other measures of fiscal capacity, such as total taxable resources, that could be more useful in determining a jurisdiction's ability to pay for damages to public structures. Developing a methodology to more comprehensively assess state capabilities and reexamining the basis for the indicator could help FEMA more accurately determine a jurisdiction's capacity to respond without federal assistance. FEMA recommends raising the usual 75 percent federal share for PA to 90 percent when federal obligations, excluding FEMA administrative costs, meet a qualifying threshold. However, FEMA has no specific criteria for assessing requests to raise the federal share for emergency work to 100 percent, but relies on its professional judgment. For the 539 disaster declarations during fiscal years 2004-2011, governors made 150 requests to adjust the federal cost share to 90 or 100 percent; 109, or 73 percent, were approved or statutorily mandated, mostly for hurricanes. Without specific criteria for 100 percent cost share, FEMA risks making inconsistent or inequitable recommendations to the President. GAO's analysis of administrative costs for 539 disaster declarations during fiscal years 2004-2011 shows that administrative cost percentages frequently exceeded FEMA's targets, although FEMA does not require that they be met. GAO's analysis of 1,221 disaster declarations shows that average administrative costs doubled from 9 to 18 percent during fiscal years 1989-2011, the time period for which FEMA has data available. FEMA is working on short- and long-term actions to improve efficiencies in delivering disaster assistance, but the agency does not plan to set goals or track performance for administrative costs. Until this happens, it will be difficult for FEMA to ensure assistance is being delivered in an efficient manner.

Why GAO Did This Study

The growing number of disaster declarations--a record 98 in fiscal year 2011 compared with 65 in 2004--has contributed to increased federal disaster costs. FEMA leads federal efforts to respond to and recover from disasters and makes recommendations to the President, who decides whether to declare a disaster and increase the usual federal cost share of 75 percent. This report addresses (1) the number of declarations requested and approved from fiscal years 2004-2011 and associated DRF obligations; (2) the criteria FEMA used to recommend a declaration for PA, and the extent that FEMA assessed whether an effective response to a disaster was beyond the capabilities of state and local governments; (3) how FEMA determined whether to recommend cost share adjustments, and their costs; and (4) FEMA's administrative cost percentages for declarations. GAO reviewed declaration data for fiscal years 2004-2011 and conducted site visits in 2011 to the two FEMA regions with the highest DRF obligations. The results are not generalizable, but provide insights.

Recommendations

GAO recommends, among other things, that FEMA develop a methodology to more accurately assess a jurisdiction's capability to respond to and recover from a disaster without federal assistance, develop criteria for 100 percent cost adjustments, and implement goals for and track administrative costs. FEMA concurred with the first two, but partially concurred with the third, saying it would conduct a review before taking additional action.

 

Recommendations for Executive Action

Agency Affected Sort descending Recommendation Status
Federal Emergency Management Agency To increase the efficiency and effectiveness of the process for disaster declarations, the FEMA Administrator should implement goals for administrative cost percentages and monitor performance to achieve these goals.
Closed – Implemented
FEMA has implemented goals for administrative cost percentages and is monitoring performance to achieve these goals. FEMA's Strategic Plan for 2014-2018 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. To achieve this goal, FEMA officials developed administrative costs goals for small, medium, and large disasters, and are monitoring performance against the goals.
Federal Emergency Management Agency
Priority Rec.
To increase the efficiency and effectiveness of the process for disaster declarations, the FEMA Administrator should develop and implement a methodology that provides a more comprehensive assessment of a jurisdiction's capability to respond to and recover from a disaster without federal assistance. This should include one or more measures of a jurisdiction's fiscal capacity, such as TTR, and consideration of the jurisdiction's response and recovery capabilities. If FEMA continues to use the PA per capita indicator to assist in identifying a jurisdiction's capabilities to respond to and recover from a disaster, it should adjust the indicator to accurately reflect the annual changes in the U.S. economy since 1986, when the current indicator was first adopted for use. In addition, implementing the adjustment by raising the indicator in steps over several years would give jurisdictions more time to plan for and adjust to the change.
Open – Partially Addressed
FEMA has taken actions to update its methodology to provide a more comprehensive assessment of a jurisdiction's capability to respond to and recover from a disaster without federal assistance . In particular, FEMA has taken steps to update the factors considered when evaluating a request for a major disaster declaration for Public Assistance, specifically the estimated cost of assistance (i.e. the per capita indicator), via the federal rulemaking process three times--in 2016, 2017, and 2020. However, as of February 2024, the agency has not issued a final rule updating the estimated cost of assistance . Until FEMA fully implements a new methodology, the agency will not have an accurate assessment of a jurisdiction's capabilities to respond to and recover from a disaster without federal assistance and runs the risk of recommending that the President award Public Assistance to jurisdictions that have the capability to respond and recover on their own.
Federal Emergency Management Agency To increase the efficiency and effectiveness of the process for disaster declarations, the FEMA Administrator should develop and implement specific criteria or factors to use when evaluating requests for cost share adjustments that would result in the federal government paying up to 100 percent of disaster declaration costs.
Closed – Not Implemented
Although FEMA initially concurred with this recommendation, FEMA has concluded that it will not establish specific criteria or factors to use when evaluating requests for cost share adjustments that would result in the federal government paying up to 100 percent of disaster costs. FEMA conducted a historical review of the circumstances that previously led to these cost share adjustments, and determined that each circumstance was unique in nature and could not be used to develop criteria or factors for future decision making. In addition, implementing criteria broad or flexible enough to capture these unique events would likely result in cost share adjustments for events that would not warrant an adjustment.
Federal Emergency Management Agency To increase the efficiency and effectiveness of the process for disaster declarations, the FEMA Administrator should annually track and monitor the additional costs borne by the federal government for the cost share adjustments.
Closed – Implemented
FEMA established a process to track and monitor the additional costs borne by the federal government for cost share adjustments. FEMA published the additional costs due to cost share adjustments during fiscal years 2005 to 2014 on its website, and will update annually or as needed.

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Topics

Public assistance programsAdministrative costsDisaster assistanceDisaster planningDisaster relief aidEconomic assistanceEmergency response fundsFederal aid programsFederal aid to localitiesJurisdictional authorityPerformance measures