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THE PATH TO EFFICIENCY: 

MAKING FEMA MORE EFFECTIVE FOR 

STREAMLINED DISASTER OPERATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON EMERGENCY 

MANAGEMENT, INTERGOVERNMENTAL RELATIONS, 

AND THE DISTRICT OF COLUMBIA 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 24, 2014 

Available via http://www.fdsys.gov 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

GABRIELLE A. BATKIN, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

KEITH B. ASHDOWN, Minority Staff Director 

LAURA W. KILBRIDE, Chief Clerk 

LAUREN CORCORAN, Hearing Clerk 

SUBCOMMITTEE ON EMERGENCY MANAGEMENT, INTERGOVERNMENTAL 

RELATIONS, AND THE DISTRICT OF COLUMBIA 

MARK BEGICH, Alaska Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

JON TESTER, Montana 

HEIDI HEITKAMP, North Dakota 

RAND PAUL, Kentucky 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

MICHAEL B. ENZI, Wyoming 

PAT MCQUILLAN, Staff Director 

BRANDON BOOKER, Minority Staff Director 

KELSEY STROUD, Chief Clerk 
(III) 

C O N T E N T S 

Opening statement: Page 

Senator Begich .................................................................................................. 1 

WITNESSES 

THURSDAY, JULY 24, 2014 

Hon. John R. Roth, Inspector General, U.S. Department of Homeland Security ......................................................................................................................... 2

Joseph Nimmich, Associate Administrator, Office of Response and Recovery, 

Federal Emergency Management Agency, U.S. Department of Homeland 

Security ................................................................................................................. 4 

Christopher Currie, Acting Director, Homeland Security and Justice Issues, 

U.S. Government Accountability Office .............................................................. 6 

Daniel Sutter, Professor of Economics, Johnson Center for Political Economy, 

Troy University .................................................................................................... 7 

ALPHABETICAL LIST OF WITNESSES

Currie, Christopher: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 76 

Nimmich, Joseph: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 63 

Roth, Hon. John R.: 

Testimony .......................................................................................................... 2 

Prepared statement with attachment ............................................................. 25 

Sutter, Daniel: 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 90 

APPENDIX 

An Analysis Report submitted by the Subcommittee ........................................... 97 

Responses to post-hearing questions for the Record: 

Mr. Roth ............................................................................................................ 153 

Mr. Nimmich ..................................................................................................... 157 

Mr. Currie ......................................................................................................... 162 

(1) 

THE PATH TO EFFICIENCY: 

MAKING FEMA MORE EFFECTIVE FOR 

STREAMLINED DISASTER OPERATIONS 

THURSDAY, JULY 24, 2014 

U.S. SENATE,

SUBCOMMITTEE ON EMERGENCY MANAGEMENT,

INTERGOVERNMENTAL RELATIONS,

AND THE DISTRICT OF COLUMBIA,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:30 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Mark Begich, Chairman of the Subcommittee, presiding. 

Present: Senator Begich. 

OPENING STATEMENT OF SENATOR BEGICH 

Senator BEGICH. Thank you all very much for being here. I appreciate it. Thank you for coming this afternoon. Again, this is the 

Subcommittee on Emergency Management, Intergovernmental Relations, and the District of Columbia. I will call the meeting to 

order. 

For the last year-and-a-half, this Subcommittee has examined a 

number of critical issues affecting the emergency management community. Today, we are here to assess FEMA’s progress in its efforts 

to balance timely disaster response and recovery with good stewardship of the taxpayers’ money. 

For example, since 2009, the DHS Inspector General (IG) has 

documented the ongoing problem with the management of disaster 

recovery spending, identifying $1.36 billion in potential cost savings. Within these IG audits, they have identified almost $276 million in wasteful ineligible disaster recovery spending from 2009 to 

2013. 

Finally, this Subcommittee has reviewed the IG and the Government Accountability Office (GAO’s) reports on the Federal Emergency Management Agency (FEMA) workforce. FEMA’s workforce 

is the greatest asset. The knowledge, skills, and expertise of 

FEMA’s workforce are critical to successfully working with disaster 

survivors, State, local, and Tribal Governments. Yet, challenges 

such as staff that lack the necessary qualifications and training can 

result in inconsistent application of FEMA’s recovery policies. This 

can lead to misspent wasteful spending and slower recovery. It is 
2 

1The prepared statement of Mr. Roth appears in the Appendix on page 25. 

paramount that FEMA’s workforce be properly trained in order to 

save taxpayer money. 

Since the massive flooding that resulted from the ice breakup on 

the Yukon last year, the Village of Galena, Alaska, has been on the 

front lines of major FEMA response. Hundreds of FEMA responders have been tasked with helping Galena rebuild. But, we do not 

expect every visitor to our State to fully understand the unique nature of life in rural Alaska. Responders must be able to adapt. 

Swift and efficient recovery cannot be supported by a workforce 

that lacks experience with Tribal communities or has not planned 

for high shipping costs and economic impact of increasing barge 

traffic along the river. 

These are a few of the issues from this Subcommittee’s research 

that appear to be ongoing challenges. I am looking for further indepth conversation with our witnesses. We also will hear from 

FEMA about the steps they are taking to fix these longstanding 

issues. 

Today, we will hear from the Department of Homeland Security 

(DHS) Inspector General, FEMA’s Associate Administrator for Response and Recovery, and the GAO. We will also get the perspective from outside government from an economist who specializes in 

the economics of natural hazards. I look forward to an informative 

dialogue on the lessons learned, the improvements made, and examples of best practices in efficiency and performance that can be 

applied to FEMA. 

Again, I want to thank all of you for being here today, and I 

would like to go down the line here. I will introduce each one, and 

then if you could give your testimony. And, again, all written material will be, as requested, in the record, and I appreciate your time 

here. 

The first is the Honorable John Roth. He is the Inspector General for the U.S. Department of Homeland Security. Mr. Roth. 

TESTIMONY OF HON. JOHN R. ROTH,1 INSPECTOR GENERAL, 

U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. ROTH. Thank you, Chairman Begich, and thank you very 

much for inviting me here today. 

My testimony today will focus on some high-risk management 

challenges that we have identified in our recent audit reports and 

in our ongoing work with regards to FEMA. I will also discuss our 

new, more proactive approach to audits designed to identify problems earlier in the disaster recovery cycle. 

As I know you are keenly aware, FEMA faces a daunting task: 

To be ready for anything, anywhere in the United States and its 

Territories. FEMA’s Public Assistance Program is immense, with 

FEMA reporting over 100,000 applicants with projects worth approximately $50 billion. FEMA has obligated about $10 billion annually from the Disaster Relief Fund (DRF) to deal with these disasters. This does not count Hurricane Sandy, which will cost the 

Fund many more billions of dollars. 

We audit about $1.2 billion of these costs each year. We have determined that, generally, communities improperly spend about 23 
3 

percent of the grant funds that we audit. Therefore, we estimate 

for this year, our Disaster Grant Audits will identify or prevent 

about $300 million in improperly spent disaster assistance. 

Attached to my testimony today is our most recent Capping Report, summarizing the work we have done in fiscal year (FY) 2013. 

As we have in the past, we continue to find problems with grant 

management and accounting, ineligible and unsupported costs, and 

noncompliance with Federal contracting requirements. A significant issue this year was insufficient insurance required to protect 

grant recipients from future losses. We also noted a sharp increase 

in questioned costs for ineligible contracting procedures. 

In the past, my office has focused much of its efforts on auditing 

past transactions. This, as you note, has led to more than a billion 

dollars in questioned costs and funds pout to better use. Unfortunately, once that money is spent, it is often too late to recover the 

funds or correct the underlying problems. 

Therefore, we are in the process of transitioning to a more balanced audit portfolio approach. Our new proactive approach is in 

four phases. 

First, we deploy our Emergency Management Oversight Teams. 

These teams accompany FEMA during the initial response to Presidentially declared disasters. We expect to do about five of those 

this year. 

Second, we anticipate conducting about 20 Capacity Audits early 

in the recovery phase, before applicants have spent significant 

amounts of Federal funding. These audits will assess whether communities and other applicants have the capacity to properly administer the grant funds. Our recommendations will focus on correcting weaknesses to prevent applicants from misspending Federal 

funds before they are spent. 

Third, we anticipate conducting about 20 Early Warning Audits 

later in the recovery phase. These audits will determine whether 

applicants are, in fact, accounting for and expending FEMA grant 

funds correctly. The early reporting of noncompliance should enable 

communities to take actions to correct or at least mitigate the financial impact of noncompliance. 

And then, last, we anticipate conducting about 20 traditional 

Disaster Grant Audits. We typically perform these audits once the 

applicant completes most of the disaster work. 

Thus, under our new approach, fewer than a third of our audits 

would be considered to be traditional audits done after the money 

was spent, and the bulk of our work is done to try to prevent 

misspending of FEMA funds. 

I am encouraged by the fact that FEMA officials have implemented corrective measures to address issues we identified in our 

past reports. FEMA recognizes that applicant noncompliance with 

Federal procurement standards continues to be a significant source 

of findings and questioned costs. 

As a result, FEMA has developed and is implementing a new 

Procurement Disaster Assistance Team. The team will provide assistance to applicants in advance of contract awards to reduce procurement violations. 

Additionally, FEMA’s Recovery Directorate plans to establish a 

section dedicated to responding to, implementing, and learning 
4 

1The prepared statement of Mr. Nimmich appears in the Appendix on page 63. 

from the Office of Inspector General (OIG) audits. FEMA has already completed a 3-year look-back analysis of our audits to help 

set policy priorities and plans to activate the new section by the 

end of this fiscal year. 

Mr. Chairman, this concludes my prepared statement. I welcome 

any questions you or other Members of the Subcommittee may 

have. 

Senator BEGICH. Thank you very much. 

Let me move to the next speaker, if I can, Joseph Nimmich, who 

is the Associate Administrator for Response and Recovery at the 

Federal Emergency Management Agency, which is part of the Department of Homeland Security. 

TESTIMONY OF JOSEPH NIMMICH,1 ASSOCIATE ADMINISTRATOR, OFFICE OF RESPONSE AND RECOVERY, FEDERAL 

EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF 

HOMELAND SECURITY 

Mr. NIMMICH. Good afternoon, Chairman Begich. Thank you for 

the opportunity to testify before you today. 

I appreciate the oversight that this Committee provides. Your 

guidance, along with the recommendations of the Government Accountability Office and the DHS Inspector General, reinforces 

FEMA’s ability to provide critical service to the American people 

while eliminating waste, fraud, and abuse. You are the voice of 

those we serve, and your findings enable us to better meet the critical needs of survivors, States, Tribes, and local communities to 

prepare for, protect against, respond to, recover from, and mitigate 

the impacts of disasters. 

Increased efficiency is a worthwhile goal for any and all organizations and we are committed at FEMA to streamlining our processes to improve the services we provide. While the challenge of increased efficiency crosses all sectors, it is important to realize the 

unique challenges associated with the rapid delivery of lifesaving 

and life sustaining services in disasters. 

Many of the issues raised by this Committee are symptoms of 

more systemic problems. I want to assure you that we are committed to addressing the underlying causes and not just the symptoms. With a firm understanding of these issues, FEMA is developing solutions to our most significant challenges. We continue to 

seek ways to be more efficient stewards of appropriated resources. 

But, we must balance that need with the need to quickly and directly provide services to disaster survivors to help them recover 

and rebuild. 

FEMA’s reforms are focused in three major areas: Building the 

capacity, competency, and capability of FEMA’s workforce; the consistency and complexity of FEMA’s business processes; and the 

ability to use information and data for rapid situational awareness 

and effective decisionmaking. I would like to take a moment to talk 

about each of these in greater detail. 

FEMA is focused on its workforce and better managing, training, 

and equipping each member. Much of what the IG and the GAO 

indicate as improper cost or contracting procedures are sympto-
5 

matic of a disaster workforce that has not received the training and 

tools it needs to perform to its full potential and provide grantees 

critical information at the time of decision. 

As a case in point, in the last 3 years of IG Capping Reports, the 

IG identified a systemic problem in sub-grantee contracting procedures. We identified the root cause of these discrepancies and implemented improved training and workforce oversight to correct the 

issues. To address the immediate needs of local communities, 

FEMA implemented a Temporary Response Team of contract attorneys to deploy within the first 48 hours of a disaster to support 

grantees and sub-grantees to ensure their actions are consistent 

with the Federal Acquisition Regulations (FAR). This will eliminate 

the problem of deobligating funds well after the event. 

Through the new FEMA Qualifications Standards and Cadre 

Management System, we will institute a more permanent fix, ensuring that each employee is provided the training and experience 

necessary to perform their job while holding them accountable to 

provide disaster survivors accurate information to rebuild their future. 

Workforce development takes time, but good management and 

accountability cannot wait. We are committed to making clear policy-driven decisions that are correct the first time. 

To better allocate resources, FEMA is strengthening the connection between strategy, budget, and execution through a comprehensive resource management system. FEMA is increasing its focus on 

performance metrics and linking performance allocations to outcomes to ensure the most effective use of the funds provided. 

The recently released FEMA Strategic Plan for 2014 to 2018 provides aggressive performance goals for each of the 16 key priority 

outcomes the plan requires. The Strategic Plan reaffirms FEMA’s 

commitment to its guiding principles and sets new priorities designed to strengthen its organizational foundation. The plan focuses on getting back to basics, streamlining policies, improving 

our information technology (IT) systems and security, and strengthening the workforce. Building on a solid foundation will enable 

FEMA to identify additional efficiencies and ensure issues identified today do not become tomorrow’s challenges. 

FEMA is committed to addressing the need for effective data 

management analytic capability by making our IT systems more 

capable, secure, and resilient. The better use of data analytics will 

provide early reliable basis for decisions. Better business systems 

will provide consistency and transparency. 

We continue to make extensive efforts to address and improve 

our programs and ensure they are efficient, effective, and meeting 

the critical needs of survivors. 

Mr. Chairman, on behalf of Administrator Fugate and the entire 

FEMA leadership team, I want to thank the Committee for your 

focus on these important issues and the opportunity to testify before you today, and I look forward to any questions you or the Committee may have. 

Senator BEGICH. Thank you very much. 

The next person we have on the list is Mr. Christopher Currie. 

He is the Director of Homeland Security and Justice Issues at the 

U.S. Government Accountability Office. 
6 

1The prepared statement of Mr. Currie appears in the Appendix on page 76. 

TESTIMONY OF CHRISTOPHER CURRIE,1 ACTING DIRECTOR, 

HOMELAND SECURITY AND JUSTICE ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. CURRIE. Chairman Begich, thank you very much for the opportunity to be here today to discuss ways to strengthen FEMA disaster operations. 

Mr. Chairman, today, FEMA’s preparedness, response, and recovery missions are larger, more expensive, and more complex than 

ever before, and the future is not looking any easier. Extreme and 

rare weather events are now expected to be the norm and it is very 

difficult for FEMA to budget and manage in such an uncertain and 

reactive environment. 

While FEMA cannot control disasters or always predict them, it 

can work to make sure programs are more effective and efficient. 

In the years since Hurricane Katrina, FEMA has made much 

progress in responding to disasters. However, we have also reported on areas where it could continue to improve. This afternoon, 

I would like to drill down into two of those areas. 

The first area is FEMA’s administrative costs, or what it costs 

FEMA to deliver disaster assistance to State and local communities. Examples of this include salaries, travel, and other support 

costs for FEMA employees deployed to disaster locations, and rent 

and other costs for operating its joint field offices in these locations. 

As disaster costs have risen, so have these costs. In September 

2012, we found that average administrative cost percentages had 

doubled in the last 20 years for disasters of all sizes. To put this 

in terms of real dollars, our analysis shows that of the $95 billion 

spent on major disasters from 2004 to 2013, $12.7 billion, and that 

is about 13 percent, were FEMA’s administrative costs. 

Recognizing these rising costs, FEMA issued guidance and targets for managing administrative costs in 2010. However, we found 

that FEMA did not require these targets to be met and 37 percent 

of disasters exceeded those targets. As an example, for large disasters costing between $500 million and $5 billion, FEMA’s target for 

administrative costs is between 8 and 12 percent of disaster spending. However, 4 out of every 10 disasters we looked at had costs 

above 12 percent. 

Now, we recommended that FEMA implement required goals for 

administrative costs and monitor how well they achieve these 

goals. As of this month, FEMA was still considering options for addressing this recommendation, but has taken it very seriously. 

While it is difficult to control the overall costs of disasters, it will 

be important for FEMA to monitor its own costs to ensure that it 

is as efficient as possible. 

The second area I would like to discuss is opportunities to 

strengthen FEMA’s workforce. The increasing number, size, and 

complexity of disasters requires a larger Federal disaster workforce. During Hurricane Sandy, more than 17,000 Federal personnel, including more than 7,000 FEMA staff, were sent to the affected area in one of the largest deployments ever. FEMA’s afteraction report self-identified that workforce readiness for an event 

like Hurricane Sandy was a challenge. 
7 

1The prepared statement of Mr. Sutter appears in the Appendix on page 90. 

Just as examples, just prior to Hurricane Sandy, FEMA found 

that 28 percent of its disaster positions were vacant. Also, deploying so many staff nearly exhausted the number of available personnel. According to FEMA, a month into the response, by November 2012, it had only 355 of its almost 7,000 total reservists—that 

is 5 percent—available to deploy, because the others were either already deployed or not available for deployment. 

We have also reported on broader human capital issues at FEMA 

and have made a number of recommendations. For example, we 

found that FEMA could better collect and analyze agency-wide 

workforce and training data and recommended they develop mechanisms to do that. 

Regarding its Disaster Reserve workforce, we have also recommended that FEMA better define its criteria for hiring and compensating these employees and ensure that they are qualified. Also, 

we have recommended they better monitor how these employees 

implement disaster assistance policies across the country to ensure 

consistency. 

FEMA has made progress in addressing our recommendations 

and has efforts underway to strengthen how it manages its personnel. As part of our ongoing work for you, we will continue to 

evaluate these efforts. 

This completes my prepared remarks. I would be pleased to answer any questions you have. 

Senator BEGICH. Thank you very much. 

Next, we have Daniel Sutter, a Professor of Economics at Troy 

University. Please. 

TESTIMONY OF DANIEL SUTTER,1 PROFESSOR OF ECONOMICS, JOHNSON CENTER FOR POLITICAL ECONOMY, TROY 

UNIVERSITY 

Mr. SUTTER. Chairman Begich, thank you for the invitation to 

discuss the need to make FEMA more efficient for effective disaster 

response. I appreciate the opportunity to testify today. 

The enormous generosity of Americans is never more evident 

than in the aftermath of natural disasters, and naturally, some of 

this assistance will be channeled through the Federal Government. 

Today, I would like to make three points about increasing efficiency 

in disaster response. 

First, FEMA currently assists with many smaller events, which 

threatens the availability of assistance when most needed. 

Second, the damage threshold for Federal assistance should be 

raised and tied to per capita personal income to avoid FEMA having to respond to so many smaller disasters. 

Third, a more thorough assessment of the potential for State and 

local governments to respond should inform the establishment of a 

new threshold for Federal assistance. 

I would like to expand on each of these points. First, the point 

about minor disasters dissipating resources. Too many events are 

being declared major disasters. Presidents have declared an average of 60 major disasters per year since 1996, an average of more 

than one per week. The GAO has found that 36 percent of these 
8 

declarations between 2004 and 2011 involve less than $10 million 

in Federal assistance, demonstrating that these weekly disasters 

do include some relatively small events. These events dissipate 

FEMA’s resources and energy. 

Disasters with total assistance under $50 million have distressingly high administrative costs, as the GAO has shown, at an average of 20 percent, compared with 12 to 13 percent for larger disaster declarations. And, administrative costs exceeded total Federal 

assistance for 12 recent smaller disasters. We pay a high price for 

having FEMA assist with these relatively small events. 

Second, the public assistance damage threshold should be raised. 

FEMA public assistance to State and local governments introduces 

third-party payment to disaster response. Third-party payment is 

well known to increase costs due to the problem of moral hazard. 

Rising administrative costs, improper payments, identified by the 

Office of Inspector General, and the professionalization of State 

and local emergency management in pursuit of Federal disaster assistance, as noted by the GAO, all reflect, I think, this third-party 

cost inflation. Third-party payment should be avoided whenever 

possible, and by limiting FEMA assistance to truly major or unanticipated disasters would allow this. 

The low damage threshold FEMA uses to evaluate Governors’ requests enables the declaration of small events as major disasters. 

FEMA set a threshold of $1 per capita for statewide damages in 

1986 and has adjusted this for inflation since 1999. The threshold 

for public assistance should have been tied to per capita income 

since 1986, consistent with the normalization of disaster losses by 

natural hazards researchers. The GAO found that 44 percent of all 

declared disasters between 2004 and 2011 would not have met an 

income-adjusted threshold. 

Third, I think the Federal assistance should be based on a better 

assessment of State and local capability. FEMA set the $1 per capita threshold somewhat arbitrarily in 1986, so a significant revision 

need not be tied to this baseline. 

A more thorough assessment of the potential for State and local 

governments to respond to disasters should be undertaken. Financial instruments allow State and local governments to tap into private sector capital and to cover disaster losses. For instance, public 

assistance covers several categories of costs, including property and 

equipment, debris removal, and emergency protective measures. 

Adequate insurance can cover the property and equipment losses, 

increasing government’s ability to meet any disaster. 

Furthermore, new financial instruments, like weather derivatives 

and catastrophe bonds, have emerged since 1986. Although primarily to date used by businesses or insurers to help manage 

weather and catastrophe risk, these financial instruments could 

help state and local governments pay for personnel expenses, debris removal, and other costs. Establishing a damage threshold in 

consideration of the financial instruments now available to State 

and local governments would help ensure that Federal assistance 

is available and there when truly needed after major disasters or 

unexpected disasters. 
9 

By avoiding third-party cost inflation and providing better incentives for State and local governments to prepare, a reduced Federal 

role will also help stem rising disaster costs for the Nation. 

Thank you, Senator Begich, and I want to thank again the Committee for the opportunity to testify today. 

Senator BEGICH. Thank you very much. I made some notes. I 

want to come back to you with some questions, but you bring up 

some intriguing ideas. 

Let me first start, with you, Chris, and that is it was interesting, 

your data points in regards to administrative costs and what you 

are seeing, or the growth in it. I guess one of the questions, first, 

is in 2010, you had mentioned the targets that were set or agreed 

to, and they were not mandatory, but they were targets or goals. 

And, you had indicated about 37 percent of them exceeded those 

targets in some form or another. 

What was the main cause, if you can recall, what forced them to 

exceed that, I guess? What was the driver? For example, if I can 

pause you for a second, I know in Alaska, in a rural area, you will 

have some unusual shipping costs, air costs, barge costs. But, was 

there a common denominator in that, or—— 

Mr. CURRIE. Chairman Begich, we have not actually looked at 

the common denominators, but you are absolutely right. I mean, 

each disaster in and of itself is very different. So, each disaster has 

its own story as to why it costs what it costs. 

I did want to say that these costs are not requirements. FEMA 

does not require them because they want to allow flexibility for the 

Federal Coordinating Officers—— 

Senator BEGICH. Right. 

Mr. CURRIE [continuing]. To make the decisions they need to 

make in that case of a disaster. But, I think one of the causes, obviously, is the rising number of personnel that are required to respond to these disasters—— 

Senator BEGICH. Because the disasters are bigger, or that is 

what we are doing? 

Mr. CURRIE. I think it is both, sir. I think, obviously, in the case 

of, Hurricane Sandy, FEMA deployed more than 7,000 people. That 

is travel. That is lodging costs. That is very expensive. 

Senator BEGICH. Yes. 

Mr. CURRIE. But, also, the assistance that is being provided is 

much greater, even in smaller disasters. And, I would also argue, 

in smaller disasters, you do not have the economies to scale that 

you have in larger disasters. So, it is common to see administrative 

costs be much higher as a percentage in those smaller disasters, as 

well. 

Senator BEGICH. You heard the commentary just at the end here 

regarding maybe raising those thresholds. Did you look at any of 

that kind of information, of what impact that would have, or—— 

Mr. CURRIE. Oh, on administrative costs, sir? 

Senator BEGICH. No. Raising the thresholds on what kind of disaster—— 

Mr. CURRIE. Oh, right. Absolutely. We have an extensive body of 

work on that, and our position is that FEMA has not adjusted the 

per capita indicator to account for inflation and personal income, 

and had they done that, it would be much higher than it is today. 
10 

And, if that had been the case, then many of the smaller disasters 

may have not been declared. 

However, I think what is very important is—and what we have 

advocated for—is that FEMA take into account other factors besides the per capita indicator. Every State is very different and has 

a different way of responding to disasters and different capabilities. 

So, in Alaska, for example, the costs of getting the assistance to 

where it needs to get may be much higher—— 

Senator BEGICH. Right. 

Mr. CURRIE [continuing]. And that could be something that needs 

to be factored into the decision of when a disaster is declared. 

Senator BEGICH. Again, I do not mean to monopolize your time, 

but I want other people to be thinking about these answers as I 

am walking through them with you. You are the front-end person. 

For example, would it be logical to say, here is some baseline— 

maybe it is income, maybe it is per capita—but then look at more 

regional and the impacts. 

For example, in Alaska, going to Galena is not like going from 

here to Baltimore. 

Mr. CURRIE. Right. 

Senator BEGICH. So, you have a different kind of impact. If you 

are going to move people there, it could take you three plane trips, 

if the weather is good, to get you there. Or, you might end up moving equipment by a barge rather than a truck. 

Mr. CURRIE. Right. 

Senator BEGICH. Do you think there is a formula that should be 

looked at instead of a one-size-fits-all? Even though in a lot of cases 

FEMA has flexibility, is it to say, here is our baseline that we really need to be focused on to raise this threshold of what we consider 

a disaster, but keeping in mind that even though it may be a—like, 

Galena, to a lot of others, might have been a small disaster, but 

for the community, it wiped it out. So, in their view, it was big. So, 

do you think there is a way to have some sort of formula in there? 

And, then, I am going to jump down the row here. But, do you—— 

Mr. CURRIE. I think that has been the goal, sir, with the per capita indicator, is to have a baseline. And, what we have argued is 

that, not that the per capita indicator is bad, but—— 

Senator BEGICH. By itself, it is bad. 

Mr. CURRIE. Well, by itself, exactly—— 

Senator BEGICH. Right. 

Mr. CURRIE [continuing]. It is bad. And, the fact that, by itself, 

it has not been adjusted to take into account other factors. But, certainly, FEMA could take into account many other factors if it chose 

to do so. I know it is considering options, because we actually recommended that they do this and we have an open recommendation. 

I know they are—— 

Senator BEGICH. When did you recommend that? 

Mr. CURRIE. This was in 2012. 

Senator BEGICH. OK. Let me ask John, and then I am going to 

go to you, Joe, in a second. Do you want to respond? You heard the 

conversation here to those questions, and I have some other more 

specific for you, but do you have any thought about that as you 

looked at doing an IG report and what that means and the impacts 

of small versus larger disasters? 
11 

Mr. ROTH. Right. I mean, certainly, as far as the threshold for 

a Presidential declaration, we have done some work on that, also, 

in 2012. Very similar results to GAO—— 

Senator BEGICH. OK. 

Mr. ROTH [continuing]. That it has not been indexed for inflation, 

that it has resulted, of course, in a creep up of the number of Presidentially declared disasters, which, of course, then increases the 

size of the Disaster Relief Fund. 

Senator BEGICH. Right. 

Mr. ROTH. I think we ought to recognize that the statute does not 

require a specific formula. It simply requires FEMA to analyze 

whether or not the States have the capacity to respond—— 

Senator BEGICH. To deal with it. 

Mr. ROTH [continuing]. To a specific disaster. The rule of thumb 

has been the amount of damage that has occurred as a result of 

the disaster, but certainly factoring in things like the cost of recovery for a disaster could be one of the factors that they look at. 

Senator BEGICH. OK. Joseph, do you want to—— 

Mr. NIMMICH. Yes, sir. Well, first—— 

Senator BEGICH. I wanted to give them an opportunity to lay it 

down for you, and then maybe you could respond to it. 

Mr. NIMMICH. Thank you, Senator, and first—— 

Senator BEGICH. Daniel set it up, so I think—— 

Mr. NIMMICH [continuing]. We need to be very specific here that 

the threshold is not the only element that is considered. The 44 

CFR requires several elements, and some of which you have described, Senator, in terms of the effect on the community. Some of 

the issues with raising the threshold indicators involves the dynamic between rural States and larger States that have larger capacity. 

We are, in fact, as a result of the GAO audit and the IG audits, 

looking at and working with States at the moment to be able to 

identify what is the right set of criteria, but it is a multiple set of 

criteria. The Stafford Act prohibits a formula. The threshold is just 

one indicator. There are disasters that have been denied even 

though a State may have made the threshold because other factors 

indicated that it was well within the State’s capabilities. 

Senator, one of the things that we really need to understand, 

there has been a drive for States to be able to get more disasters, 

that States have had difficulty during the last several years with 

the economy to be able to get that. 

Senator BEGICH. Got you. 

Mr. NIMMICH. What we are—— 

Senator BEGICH. Do you think that is one of the drivers, that 

they saw—— 

Mr. NIMMICH. Sir, a lot has to do with population shift, the infrastructure that is being developed. There are multiple factors that 

go into it. Some of it, you heard, the severity of storms. 

FEMA is working very closely with the States to have non-Stafford Act capabilities. There is an awful lot that the National Voluntary Organizations Active in Disasters (VOADs), the voluntary 

organizations, that other agencies provide short of a Stafford Act. 

The goal has always been to try to get to a Stafford Act declaration 

because that opens up the DRF. But, we are really working with 
12 

States now to be able to identify where they have capability that 

they can use, both from the Federal Government, voluntary organizations, and their own, to be able to reuse grants and other capabilities that we take the drive away. 

We are also looking at what are those initial indicators for the 

threshold, and then the obligations that actually come in long 

afterwards to see if, in fact, the thresholds, while may appear low, 

are really, because of the way we assess damage, really are a right 

level, or are we finding that States are trying to get to that threshold in order to get there—— 

Senator BEGICH. Got you. 

Mr. NIMMICH [continuing]. But when we see the obligations later, 

they are much lower. All of these are being taken into consideration as we move toward a proposal that GAO has asked for. We 

owe GAO an answer by the spring of 2015—— 

Senator BEGICH. OK. 

Mr. NIMMICH [continuing]. And we are moving in that direction, 

but we are consulting with the National Emergency Management 

Association (NEMA). We need to consult with the Tribes and other 

people that have implications now that they may not have had before. 

Senator BEGICH. Let me, if I can, I am going to jump back to you, 

John, if that is OK? I am going to move around a little bit here. 

But, one of the things in our analysis, we found 40 open disasters, 

some 10 years old, or 12 of the disasters declared before 1999. I am 

assuming—and this actually kind of goes back to one of the things 

Christopher said on administrative costs—the longer these are 

open, there is an accumulation of administrative costs, operational 

costs just to maintain these open accounts. 

Is there something that FEMA could do better to—I know when 

I was mayor and we had things that were—I mean, if we had 

grants, and sometimes they were obligated but unobligated, we 

would look at these projects and determine if they are reality or 

not, or if what is happening is a department—in my case as 

mayor—a department is stretching the money in order to take off 

their two points or three points for administrative overhead and 

then say, ‘‘Oh, we are working on it still,’’ and, really, they will 

never have enough money to do it, or they have done it and they 

are just waiting for other claims that might come forward. 

What is your thought here? Is there something more we could be 

doing, or FEMA could be doing, and, it is always hard when you 

have a community who has this money sitting there to say, you 

have not used it in 15 years. And, they will always—I know this 

as a mayor—you are always going to have a reason why it still 

should stay there. 

Mr. ROTH. You raise very good points. We are doing an audit on 

this very specific issue, a systemic audit to understand the root 

causes of this. I will say that when we do an audit and we see unobligated funds that we do not think there is a likelihood of expenditure on, we will advise or recommend to FEMA that they 

deobligate the money, put it back into the DRF so it can be 

used—— 

Senator BEGICH. And, that is in process now, that review you 

just described—— 
13 

Mr. ROTH. Correct. 

Senator BEGICH [continuing]. Or is it something you do on a regular basis, or is it just something that you have added in? 

Mr. ROTH. Both. 

Senator BEGICH. OK. 

Mr. ROTH. So, in any audit that we do of any project, if we see 

money that is unlikely to be spent, we recommend that it be 

deobligated, first thing. Second—— 

Senator BEGICH. Can I pause you there on that—— 

Mr. ROTH. Of course. 

Senator BEGICH. Do you go back and see what FEMA’s compliance to that is on that kind of recommendation, what their percentage of compliance is? 

Mr. ROTH. Yes. We track every recommendation that we do. We 

do followups with FEMA over time—— 

Senator BEGICH. What would you say on that one, for example, 

is it 20 percent of the time they take that recommendation, 100 

percent of the time, or—— 

Mr. ROTH. Off the top of my head, I would not be able to give 

you an answer. 

Senator BEGICH. Could you provide that for us? 

Mr. ROTH. Absolutely. 

Senator BEGICH. I would just be curious, because that is an interesting recommendation. If you say, here is this money, you view 

it as not usable, I am assuming, then, FEMA always has the opportunity to put their reason why they still need to keep it, but, I 

would be curious on those recommendations. 

But, then you had a second piece. I did not mean to interrupt 

you. 

Mr. ROTH. Certainly. And, then, we are doing a systemic audit 

to look at the root causes of this. 

Senator BEGICH. Good. 

Mr. ROTH. That is currently in process. And, I guess my third 

point here would be that, The way the system works is that you 

have grantees, who are the States, and then you have sub-grantees, who are these localities. Neither the State nor the sub-grantee 

have any inherent interest in turning that money back. 

Senator BEGICH. No, I know this. [Laughter.] 

Mr. ROTH. And, the States, as the entities that are supposed to 

be administering these, I think we ought to be a little more—— 

Senator BEGICH. Aggressive. 

Mr. ROTH [continuing]. Aggressive in ensuring that they are 

looking at these projects, actively managing the projects, and they 

get FEMA money to do that management, and recommending when 

there are projects that need to be closed out, that we close them 

out. 

Senator BEGICH. I am going to one more, and again, I want to 

keep a little flexibility here for folks to respond and so forth, but 

I want to get a couple more questions in and watch our time at the 

same time. 

In doing our research, one thing that we noted was the DHS OIG 

website does not have a data system that provides either Congress 

or the general public kind of what comprehensive records, status 

and recommendations. Can you tell me, is there something that 
14 

you could do—and when I say ‘‘you,’’ your agency—do to make that 

more transparent, at least to Congress so we have better access, 

and obviously a broader perspective, to the public. What would you 

recommend, or are there thoughts that are in process now, that you 

are looking at this issue? And, you know what I am referring to 

is the transparency of this. 

Mr. ROTH. I do, and, in fact, I saw that in the staff report—— 

Senator BEGICH. Right. 

Mr. ROTH [continuing]. That was issued. I think that is a very 

good point—— 

Senator BEGICH. Good. 

Mr. ROTH [continuing]. And, candidly, it is one I had not thought 

of. 

Senator BEGICH. OK. So, it is one that seems reasonable? 

Mr. ROTH. Absolutely, and so I have directed my staff to start to 

take a look at these issues—— 

Senator BEGICH. OK. 

Mr. ROTH [continuing]. And to ensure that we do a little better 

on metrics, making those metrics public—— 

Senator BEGICH. Good. 

Mr. ROTH [continuing]. As far as the number of recommendations, the age of the recommendations, and what specific—— 

Senator BEGICH. And what is the status? 

Mr. ROTH [continuing]. Whether they have been closed out, 

whether FEMA agrees—— 

Senator BEGICH. Right. 

Mr. ROTH [continuing]. Disagrees with the recommendations. 

Senator BEGICH. Will you let the Committee know if you have 

some challenges in trying to—if there is something that is coming 

up that you think we could be helpful in helping make that happen. I think that is a great the more people know that, obviously, 

Committee, but the public understand, because I think as we continue to have—and I think it was very clear by almost everyone 

here, the testimony of the amount and the size of these disasters 

are increasing, and some of the calls we start to get now are, well, 

what happened to such and such grant, and I understand there 

was an audit, and then they say, well, what happened to that, and 

more access is better. So, if there is anything we can assist in that, 

but I think it is great you are looking at this. 

Mr. ROTH. I could not agree more. Thank you, Senator. 

Senator BEGICH. You bet. 

Let me, if I can, Joe, you heard the conversation in regards to 

the disasters that have open-ended, pre-1999, so forth, long-term 

ones. Give me your thought on that response. Do you agree with 

the IG in regards to how you can handle these, or what we can do 

better? The other audit they are doing, which will, hopefully—it 

will be very interesting to see is there, again, a common denominator? What is the root problem of these? Are they independently 

very different or is there something across the board? Can you give 

me some comment. 

Mr. NIMMICH. So, sir, some of the disasters that are open for 10 

years have reasons that they are open for 10 years, and sometimes 

it is litigation and other issues that are going on. Of those that are 

open over 10 years, there are three significant ones. The vast ma-
15 

jority, I would say, the highest percentage of the costs or obligated 

money—unobligated money—exist around the 9/11 disaster, exist 

around the 1994 earthquake, and exist around Hurricane Irene, 

the first one back in the 1990s. So, these three disasters—— 

Senator BEGICH. Can I pause you on that? 

Mr. NIMMICH. Yes, sir. 

Senator BEGICH. I recognize those are major ones, but at some 

point, you have to close them out. I mean, that, to me—— 

Mr. NIMMICH. So, that comes to the issue, Senator, which is it 

is a joint issue on closing it out. Now, you mentioned the fact that 

management costs continue. 

Senator BEGICH. Right. 

Mr. NIMMICH. There is a ceiling on the management costs, a certain threshold that they stop at a certain point unless they ask for 

an extension or an increase in those management costs. 

Senator BEGICH. Have you ever granted them on those three big 

ones? 

Mr. NIMMICH. I cannot answer that, sir. We can answer it for the 

record. 

Senator BEGICH. I would like that. 

Mr. NIMMICH. So, once the management costs reach a threshold—but, this is a joint effort. The States need to provide the information so we can close out each of those, and there may be only 

specific project work items that are inside there, that we are looking for that information to be able to close it out. 

Senator BEGICH. How do you incentivize the States to do that, 

because I am going to be very blunt with you. As a former mayor, 

a city of 300,000 people, a billion-dollar budget, we covered 1,900 

square miles of city, if there is no incentive, I am going to keep 

that on the books, because—there are a lot of reasons why I will 

keep it on the books. One, it helps my balance sheet, to be frank 

with you, when I am doing bonding and other things. I have all 

this money sitting there. That is one little piece. But, the second 

is, I do not want to give it back to you. If I give it back, I will never 

see it again. 

So, what is the incentive to tell the States—or the locales, but 

in most cases States—to get off the dime and close it out and do 

their work? 

Mr. NIMMICH. So, Senator, you used the right word, ‘‘incentive,’’ 

because most everything that has been proposed for close-outs— 

and, I need to make the point that since 2011, Administrator 

Fugate has had us focus on this and we have returned tens of millions of dollars each year and have closed out over 50 percent of 

the open—— 

Senator BEGICH. Open disasters. 

Mr. NIMMICH [continuing]. Disasters. But, there are still quite a 

few, as you know. 

Senator BEGICH. Right. 

Mr. NIMMICH. So, incentives are tough. Most of what everybody 

proposes are disincentives, either termination at a certain period in 

time, which may not be the correct answer if, in fact, you have 

valid project works that are open. And, prior to the Sandy Recovery 

Improvement Act (SRIA), sir, the repairs had to be done, and we 

are working on repairs over time. Some of the road repairs, some 
16 

of the repairs that we are looking at can take 10 years or 12 years 

to actually make, until we have adjusted the final costs. 

So, incentives are the right way to go. It is a real challenge when 

you are offering a State or a sub-grantee some additional money 

that they do not need to have for the repair of that issue. Again, 

with the pre-SRIA requirements that are in the legislation, we 

really do not have a way of doing that. So, we are open to suggestions on incentives. 

Senator BEGICH. Good. 

Mr. NIMMICH. The reality is, there are some disincentives we 

could put into the program. As you well know, States do not want 

to see disincentives in terms of losing money that they may actually be able to use, even though it has taken a long time. 

Senator BEGICH. Right, but we have disincentives in a lot of programs. The Highway Trust Fund money, if they do not use it, at 

a certain point, they can be deobligated very quickly, even if it is 

obligated. There are disincentives with the CDBG money. I mean, 

as a former mayor, I remember we had a goal. If we received these 

monies, we have to move them. And, disasters, in the moment, they 

are complicated, but once you get past the crisis moment, it is a 

project. There are timelines. 

Mr. NIMMICH. It is a project, sir, but to put it in reference, FEMA 

is an insurance company, and every time you and the client deal 

with an insurance issue, there is always debate over what was covered, what should be covered, and some of those debates go on for 

a very long period of time. 

Senator BEGICH. Let me just say, I had a small disaster in my 

house in Anchorage and the insurance company made sure I closed 

it out. So, the incentive was, we are closing it out. That was the 

incentive, so get my work done. Actually, we closed it out so fast 

that they had not done their final inspection and we got paid. So, 

that was good. But, this is an area we are interested in, because—— 

Mr. NIMMICH. Yes, sir. We look forward to working with the 

Committee on identifying ways to more rapidly close out disasters. 

Senator BEGICH. OK, because it is an obvious thing what happens, is we hear from people and they go, 15 years, that money has 

been sitting there. What the heck is going on? 

Daniel, I want to ask you a question. I thought it was interesting, and you called them weather derivatives and catastrophic 

bonds. Are most of those applied for by private corporations, not 

local governments or State governments? 

Mr. SUTTER. Yes. Those financial instruments have been usually 

used either by companies or insurance companies. 

Senator BEGICH. I kind of ask you this and maybe, Joseph, you 

can answer this, too—is there an opportunity to have a hybrid 

partnership, maybe that between local governments or State governments to utilize these kind of bonds in conjunction with disaster 

preparedness? I do not know the answer to this. I am just asking 

this question, because it would seem—I know when we did catastrophic liability issues within the city, we had a threshold covered 

out of our self-insurance fund, then we had another threshold that 

was insured, and then above that, another level. 
17 

Is that a model or an opportunity, I guess, to do some demonstration capacity projects in regards to these types of bonds with local 

governments or State governments? Who would like to—Daniel, 

maybe, and then Joseph. 

Mr. SUTTER. I think that, certainly, there could be some hybrid 

or new types of instruments that might be derived. There could be 

some kind of cost sharing or self-insurance amongst different 

States that could seek to share some of these costs. I think, certainly, weather derivatives have a good possibility to use here, because they are used in some ways to substitute for insurance—— 

Senator BEGICH. Right. 

Mr. SUTTER [continuing]. On things that would otherwise be 

hard to insure because they would be related to a business’s cost. 

Senator BEGICH. Got you. 

Mr. SUTTER. So, by tying the payment to some measurable 

weather statistic, like heating degree days or inches of snowfall—— 

Senator BEGICH. Right. 

Mr. SUTTER [continuing]. Or something like that—— 

Senator BEGICH. Rainfall, things like that. 

Mr. SUTTER. Right. You can make a payment that is not so directly tied to a business’s cost. So, I think they create quite a bit 

of potential for both States and local governments to be able to access money to help them rebuild or deal with a disaster response, 

costs, that were not available at the time of the passage of the Stafford Act. 

Senator BEGICH. Very good. Joseph, any thought on that? 

Mr. NIMMICH. Yes, sir. Well, both of those, you are identifying 

ways to reapply the risk back to the State as opposed to the Federal Government absorbing the risk. 

Senator BEGICH. Right. 

Mr. NIMMICH. So, these are significant changes that we would 

need to look at. There are other opportunities that people talk 

about in terms of being able to do this—a State deductible level, 

where the States, based on their GDP or so—— 

Senator BEGICH. Capacity—— 

Mr. NIMMICH [continuing]. Have a certain deductible that they 

do not get any resources until they have exceeded that deductible. 

There are multiple different ways of looking at this problem, but 

what we are really talking about is putting the risk back to the 

States that have the highest risk—— 

Senator BEGICH. Got you. 

Mr. NIMMICH [continuing]. With the potential, I presume, of not 

including those very catastrophic events. So, the 9.0 earthquake in 

Alaska is not something that you are going to be able to insure 

against—— 

Senator BEGICH. Right. 

Mr. NIMMICH [continuing]. But, certain other things, you are, 

some of the lower ones that we are looking at. 

Senator BEGICH. Right. 

Mr. NIMMICH. That is not how the program is currently configured. 

Senator BEGICH. Understood. 
18 

Mr. NIMMICH. And, there are multiple discussions, and we can 

continue to look at alternatives, all of which would need to go 

through the regulatory process. 

Senator BEGICH. I want to go back to one other part you brought 

up and that is the workforce. You talked about administrative 

costs, but also workforce and some of the issues I brought up, especially in rural communities. What are some of the things that you 

see that we could do to improve the workforce capacity? And, you 

mentioned an interesting comment here. I think it was you said, 

I forget which incident it was, but 5 percent of the reservists were 

available. I forget which incident that was, but that is not a ready 

workforce. So, is there something that we can do better, FEMA can 

do better? What is the piece here? And, you had mentioned they 

are working on this, but give me some thought there. 

Mr. CURRIE. Yes, absolutely. The example—— 

Senator BEGICH. You understand the issue I am referring to. 

Mr. CURRIE. Yes, sir. The example was in Hurricane Sandy—— 

Senator BEGICH. OK. 

Mr. CURRIE [continuing]. Which, obviously, is a very extreme example—— 

Senator BEGICH. Right. 

Mr. CURRIE [continuing]. But something that is well within what 

FEMA plans for. In fact, I think they even plan for having multiple 

events like that going on at a time and factor that into how ready 

they need to be. 

I think FEMA—we have made recommendations in the past that 

they develop a comprehensive workforce plan and analysis. They 

have acted on those. I know they have contracted to actually complete those, and some of those are underway. 

I think a big part is workforce training. FEMA has a very diverse 

and different workforce. They have permanent full-time people. 

They have FEMA Corps now. They have the Corps employees and 

they have reservists, all very different employees. For example, the 

reservists are not full-time FEMA employees. 

Senator BEGICH. Right. 

Mr. CURRIE. They are called up when they are needed. So, one 

challenge has been how do you train reservists when they are not 

actually deployed to a disaster, when they are off doing the other 

things that they do—— 

Senator BEGICH. Come to Alaska. We have one every week, it 

seems. [Laughter.] 

Mr. CURRIE. So, FEMA recognizes these challenges, obviously, 

and they have taken steps. They have tried to better communicate 

with reservists when they are not actually deployed. They have 

sent them to the Emergency Management Institute, all those 

things to try to get them ready. 

I think the other thing with the human capital area is qualification. This has been a perennial challenge in disasters. It was a 

huge problem in Hurricane Katrina. We reported on it. FEMA has 

made a lot of progress, but it was a challenge in Hurricane Sandy, 

making sure that the people you deploy, those thousands all at one 

time, they are in the right job and they have the training and they 

need to do the job right away. 

Senator BEGICH. Joseph, any thought there? 
19 

Mr. NIMMICH. Sir, that is—— 

Senator BEGICH. I mean, you probably agree with what he is 

talking about. 

Mr. NIMMICH. Well, it has been a challenge, but we are accepting 

the challenge—— 

Senator BEGICH. Good. 

Mr. NIMMICH [continuing]. And working diligently on it. In terms 

of qualifications, it was just a month before Hurricane Sandy that 

FEMA implemented its FEMA Qualifications Standards, so that 

was a real challenge in being able to—none of that had taken effect. 

Senator BEGICH. Right. 

Mr. NIMMICH. And, quite frankly, those things do not change 

overnight. It takes a significant amount of time. But, I think the 

biggest step forward we are taking is realizing we have to put the 

infrastructure in place to manage the workforce. So, this past June, 

we created internally to FEMA the Cadre Management Program, 

which puts people in place to be able to engage each and every employee in that disaster workforce, whether they are a reservist or 

a Corps or a permanent workforce. 

Senator BEGICH. So, it does not matter where they fall, just—— 

Mr. NIMMICH. If they are part of the disaster workforce and have 

identified that they have a skill set that needs to be used in that 

disaster—— 

Senator BEGICH. Right. 

Mr. NIMMICH [continuing]. They have been contacted, and they 

have been contacted to look at what our systems say is their qualifications, their experience, the equipment they have, their availability, and in the future, we are going to add performance in from 

the last disaster. This is an opportunity—— 

Senator BEGICH. Can I ask you a question on that last piece? 

Mr. NIMMICH. Yes, sir. 

Senator BEGICH. So, that is basically saying you can then analyze did they perform to what we believed was their qualification—— 

Mr. NIMMICH. And, what do I need to provide them if they are 

not able to perform—— 

Senator BEGICH. Got you. 

Mr. NIMMICH [continuing]. To what the skill set was, what did 

I lack in providing them so that I can get their skill sets up so the 

advice and the service that they provide to survivors in the State 

is right at the first time, so I am not making improper costs— 

thank you—— [Laughter.] 

Mr. NIMMICH. Improper costs—— 

Senator BEGICH. The IG got right in there to make sure you had 

the right language. [Laughter.] 

Mr. NIMMICH. Improper costs or contractual vehicles that were 

not in compliance with the Federal Acquisition Regulations. So, we 

are not only looking at it. We are doing something about that right 

now. 

And, Senator, you hit the nail on the head. This is going to start 

allowing us to identify where our training gaps are and how we go 

about creating the infrastructure of training that we need so that 
20 

reservists do not wait 2 years to be contacted, and when they are 

called up, their experience and their knowledge is 2 years old—— 

Senator BEGICH. Got you. 

Mr. NIMMICH [continuing]. That we are working with them on a 

regular basis. 

Senator BEGICH. You had mentioned some ideas of how you are 

going to try to get some additional data and some other information. Do you believe the information systems that you have are adequate to meet the needs of what you want to do in trying to analyze—for example, this was a great example, workforce, the analytics that you want to do. From our information, it just seems that 

it is not as effective as it could be. Is there data that you think, 

or information systems that should be better designed for what you 

need, or what you have is adequate and you can work with what 

you have got? 

Mr. NIMMICH. We have a wealth of data. We do not have the 

tools and the analytics to be able to make the knowledge we need 

out of some of that data. 

Senator BEGICH. Got you. 

Mr. NIMMICH. We have a lot of data. It is not always the right 

data, either, though. So, as a case in point, we should be able to 

use our own data and those of the Weather Service and other providers to us to be able to estimate damage far earlier in the process 

than we do so that we can respond faster, particularly if it is in 

individual systems. 

Senator BEGICH. Why can you not do that right now? 

Mr. NIMMICH. Sir, we do not have the skill sets that we are developing right now. We have taken on—— 

Senator BEGICH. Within personnel? 

Mr. NIMMICH. Yes, sir. 

Senator BEGICH. OK. 

Mr. NIMMICH. Yes, sir. So, we are looking at the better skill sets 

and bringing in those people that have the skill sets to understand 

the data that goes behind the geospatial imagery—— 

Senator BEGICH. Yes. 

Mr. NIMMICH [continuing]. That we need to be able to say what 

is going on. So, this morning, for the fires in Washington State, I 

can now see where every house has been destroyed, what houses 

are threatened if the fire changes course. So, I can anticipate, are 

they likely to be eligible for some assistance and be prepared to do 

that in a more rapid manner. 

Senator BEGICH. Got you. So, with that kind of data, the question 

is, your personnel capacity is one of the areas in order to look at 

that and say, OK, we know, based on all the weather patterns and 

everything else, this area could get hit by this—I will use the fire 

as an example—fire disaster, and there are 72 homes. This is what 

we think the average valuations are. Here is the cost. Here is what 

we need to prepare for potential damage. 

Mr. NIMMICH. So, in the tornadoes that hit Arkansas earlier this 

year, within 24 hours, we were able to estimate that they would 

exceed the thresholds and the other requirements for an individual 

assistance disaster, including the trauma, the number of lives lost, 

the significant damage to a specific small town, all of those thresholds they were meeting. So, we were able to work with them to get 
21 

a very rapid individual assistance declaration in place that the 

President approved, and within 48 hours after that, we were able 

to put money in people’s accounts that they needed to buy food, to 

be able to pay for hotels, to be able to sustain their lives. 

Senator BEGICH. And, your goal is to make that systemwide. 

Mr. NIMMICH. My goal is that every survivor in this country gets 

the same service, whether they are in remote Alaska or whether 

they are in downtown Los Angeles. 

Senator BEGICH. Very good. I just want to make sure I have covered what I want to cover. Let me back up. I am sorry, John, you 

are the center point for a moment here. I think you used the 

words—I may get this wrong, but back to basic plan, or getting to 

the basics. Do you think, as you work through that, within FEMA, 

you are going to identify—obviously, IG and GAO have identified 

areas—will you be able to identify the kind of resources or reallocation of resources that may be necessary to get to that core issue, 

or like we just talked about, the data inputs that you need to have 

so it is consistent nationwide, and do you think—I think I know 

the answer to this, so it is kind of a, I do not want to make it a 

softball—but, do you think you are going to have the resources 

within what you have, or do you think, at the end of the day, you 

are going to have to figure this out and know that there are some 

resources needed? 

Mr. NIMMICH. So, as far as we—— 

Senator BEGICH. Does that make sense, what I am asking? 

Mr. NIMMICH. Yes, sir. Absolutely. And, as we work through the 

process that we have put in place now to be able to look from our 

strategy and those goals that the strategy has down into the activities that we actually do and be able to equate those, too, we are 

looking for twofold. One is to be able to identify, whether we can 

meet those goals, and if not, do we need additional resources. But, 

also, the Administrator has made it very clear. We need to do less 

but better. Where are the areas that we do not have an impact 

from those resources on the outcomes we are trying to achieve, and 

where do I need to put those resources? 

Senator BEGICH. Reassign. 

Mr. NIMMICH. Yes, sir. 

Senator BEGICH. And reallocate. 

To the folks from the IG and the GAO, thank you for what you 

have done in helping us get some good information to the staff who, 

I am a big believer—in this Committee as well as my other Committee I chair over in Commerce, we spend a lot of time on oversight. I think the Senate, to be very frank with you, does not do 

enough. We do it when there is a disaster, all right. When there 

is a crisis, pick the Committee, whatever Committee you want, 

when there is something bad happening, like, it is only now we 

have realized there is something wrong with the Department of 

Veterans Affairs (VA), which actually the IG and others have done 

reports on the VA for the last decade and a half, but that is another story, but it is only now that people realize. 

So, I thank you for participating in this. To the staff, I want to 

thank you for the report, because it really helps us go after these 

issues and look at $1.1-plus billion dollars of some that may be 

wasteful, some may not be. Some may be issues that we need to 
22 

work on. But, also to drill down, I think as you said it, John, to 

what are the systemic issues here. What is the root problem of 

some of these, because it is great to get a report, but if we do not 

go one more step down, then we are on to the next report or the 

next issue. 

And, as you are doing this, the recommendations to me are always important, because if you are making these recommendations 

and then 5 years go by, something bad happens, FEMA is in here, 

we are railing on them, and then we go, well, wait a second, and 

you will politely say—and I know that you will politely say, well, 

actually, in 2009, we recommended A, B, C, and because we did not 

do oversight. 

So, what I am hopeful of, that this is the beginning of a continual 

effort, as we have done already on FEMA, following it, trying to 

push the envelope, trying to figure out how to make your business 

more efficient, how to make sure the reports that are being issued 

are being used in a way that really gets to the meat of this. 

And, then, Daniel, your comments, try and be innovative in how 

to think beyond. I know in the city of Anchorage, we did several 

things around disaster relief that was different. We have private 

sector folks that work in our disaster relief program. They are actually from Sam’s and Costco and others. Why? Because they are our 

storehouses. Why would we store all that stuff? It does not make 

any sense. They have the warehouses. They have logistics. 

Or, another thing we did, we went on a program to make sure 

every city employee was trained in cardiopulmonary resuscitation 

(CPR). So, at a bare minimum—because, in a natural disaster, the 

odds are you are in your neighborhood. You cannot get police and 

fire fighters to it. First responders may not get there because the 

roads are out. So, if you have someone—and we had a 3,000-person 

workforce, the odds we would have someone in those communities 

if it was an off-hour work time that understood basic first aid and 

CPR. That was part of our emergency management plan in a 

broader sense and trying to think ahead rather than when the disaster occurs, clean it all up, and then move on to another thing. 

So, I want to really say to the folks at FEMA, I think, as identified in the report, we have great assets over there, which are our 

personnel. We have some work to do to create some more training 

opportunities, create some more consistency, not only with the fulltime, but part-times and the ones that are called up. 

I think, on the money issue, we have to drill down and figure out 

what are systematic issues here. With the States, we have to create 

some incentives for them to get their work done, because I can tell 

you, you are right. Some of these projects get done, take a long 

time. But, I can also tell you, as a former mayor, you can get things 

done. We built a bridge in Minneapolis in a year and it was done. 

We can get things done if we put our minds to it, especially if there 

is a little incentive to, if you do not do it, you might end up not 

having that money. 

And then, again, trying to figure out on the workforce, what 

more can we do here to make it the best quality workforce out 

there. 
23 

So, this is helpful. It helps us identify opportunities of savings, 

but also opportunities to improve the quality of delivery of service 

here. So, thank you very much for being here. 

I may have some other questions. We will keep the record open 

for 15 days for other members who may have some information or 

questions they may have for you. 

But, again, I want to thank you all for being here today and testifying in front of the Committee. 

At this time, the Committee is adjourned. 

[Whereupon, at 3:31 p.m., the Subcommittee was adjourned.] 

(25) 

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Æ