Department of Homeland Security 

Office of Inspector General 

FEMA Temporary Housing 


Property Management Controls 


OIG-10-24 December 2009 
Office ofInspector General

U.S. Department of Homeland Security

Washington, DC 25028

Homeland

Security

DEC - 8 2009

Preface

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was

established by the Homeland Security Act of2002 (Public Law 107-296) by amendment

to the 1nspector General Act of1978. This is one of a series of audit, inspection, and

special reports prepared as part of our oversight responsibilities to promote economy,

efficiency, and effectiveness within the department.

This report presents the results of an audit of the Federal Emergency Management

Agency's property management controls governing accountable property. We contracted

with the independent public accounting firm of Urbach Kahn & Wedin LLP (UKW) to

perform the audit. The contract required that UKW perform its audit according to

generally accepted government auditing standards. UKW identified certain internal

control weaknesses and determined that FEMA had not effectively captured and

disseminated needed information following Hurricane Katrina. The report contains two

recommendations.

UKW is responsible for the attached report dated August 19,2009, and the conclusions

expressed in the report.

The recommendations herein have been developed to the best knowledge available to our

contractor, and have been discussed in draft with those responsible for implementation.

We trust this report will result in more effective, efficient, and economical operations.

We express our appreciation to all of those who contributed to the preparation of this

report.

yf~;(.~

Richard L. Skinner

Inspector General
 

 

 

 

August 19, 2009 

Mr. Matt Jadacki 

Deputy Inspector General for Office of Emergency Management Oversight 

Office of Inspector General 

Department of Homeland Security 

245 Murray Drive, Building 410 

Washington, DC 20528 

Dear Mr. Jadacki: 

This draft report presents the results of our review of the Federal Emergency 

Management Agency’s control over accountable property including temporary housing 

units. The draft report includes recommendations the agency can implement to enhance 

the accountable property system’s overall effectiveness. We performed the audit as 

stipulated in Task Order TPDFIGBPA070009-0072. 

We conducted the performance audit in accordance with Government Auditing 

Standards, July 2007 Revision. The audit objectives were to assess property 

management controls and practices at FEMA and provide recommendations for 

improvements of the accountable property system including LIMS and within the THU 

Program and Logistics Management Directorate. We appreciate the opportunity to have 

conducted this audit and appreciate the cooperation of FEMA’s housing and logistics 

staff. Should you have any questions, or if we can be of any further assistance, please 

call me at (571) 227-9500. 

Sincerely, 

Roger Von Elm 

Roger Von Elm, CPA, CGFM 

Partner 
Table of Contents/Abbreviations 


Executive Summary.........................................................................................................................1
 

Background......................................................................................................................................2
 

Results of Audit ...............................................................................................................................4
 

Temporary Housing Property Management...............................................................................4
 

Conclusion .................................................................................................................................7
 

Recommendation .......................................................................................................................7
 

Other Program Issues.................................................................................................................7
 

Recommendation .......................................................................................................................8
 

Management Comments and OIG Analysis ..............................................................................8
 

Appendices 

Appendix A: Purpose, Scope, and Methodology.....................................................................9 


Appendix B: Management Comments to the Draft Report...................................................10 


Appendix C: Report Distribution ..........................................................................................12 


Abbreviations 

DHS Department of Homeland Security 

FEMA Federal Emergency Management Agency 

LMD Logistics Management Directorate 

OIG Office of Inspector General 

THU Temporary Housing Unit 

UKW Urbach Kahn & Werlin LLP 

FEMA Temporary Housing Property Management Controls 
Executive Summary 

The Federal Emergency Management Agency has made progress in 

reorganizing its logistics function in response to a 2006 congressional 

mandate. In 2007, the agency created the Logistics Management 

Directorate that has since strengthened operations, asset visibility, and 

coordination with other emergency providers, and has increased 

staffing with experienced logisticians. 

As part of these initiatives, the agency has significantly improved 

logistics property management by enhancing guidance, processes, and 

controls, and by establishing new reporting tools to enhance property 

management of housing units and other accountable property. The 

property management division within the Logistics Management 

Directorate now includes a dedicated internal review group assigned to 

perform detailed tests of property data, including semiannual and 

annual inventory counts. Under the newly structured directorate, the 

agency also created several new positions to oversee and monitor the 

effectiveness of its property management controls, including a 

property management division chief and a temporary housing unit 

branch chief. 

Notwithstanding these recent initiatives, the agency lacks adequate 

control over some aspects of its accountable property systems and 

needs to take corrective action to address the conditions that include 

inaccurate and unreliable data, noncompliance with existing 

procedures, and the lack of an adequate system to manage temporary 

housing units. 

We are making two recommendations to address these property 

management challenges in an effort to assist the Federal Emergency 

Management Agency in its oversight of the temporary housing unit 

program. 

1 

FEMA Temporary Housing Property Management Controls 
Background 

In the aftermath of Hurricane Katrina, the demand for temporary 

housing to meet the needs of several hundred thousand displaced 

individuals was unprecedented. The Federal Emergency Management 

Agency (FEMA) contracted with numerous manufacturers to provide 

on short notice more than 130,000 Temporary Housing Units (THUs) 

and to furnish general temporary housing management services. 

Without a well-developed housing program at that time, FEMA lacked 

guidance and controls on acquiring, receiving, maintaining, tracking, 

and disposing of temporary housing units and related equipment. See 

figure 1 for an example of a FEMA THU staging area. 

Figure 1. FEMA Staging Area Housing Units 

Source: OIG 2008 photo 

As part of the restructuring mandated by the Post-Katrina Emergency 

Management Reform Act of 2006 (Public Law 109-295), FEMA 

reorganized its logistics function, and created the Logistics 

Management Directorate (LMD) in April 2007 to oversee the storage 

and delivery of disaster materiel, including THUs. 

Figure 2 displays LMD’s organization chart. 

2 

FEMA Temporary Housing Property Management Controls 
Figure 2: Logistics Management Directorate Organization Chart 

Source: OIG prepared using FEMA data 

Under the newly structured directorate, FEMA created several new positions 

to oversee property management, and hired new field coordinators and site 

managers in June 2008 to manage its storage sites. To monitor inventory, a 

dedicated internal review group performs detailed tests of property data, 

including semi-annual and annual inventory counts. Plans call for several 

initiatives to improve the effectiveness of the housing program, including 1) 

reducing the number of housing units shipped directly to disaster sites, 2) 

creating a “strike team” to assist disaster personnel with logistics 

management, 3) implementing a lifecycle management system for housing 

assets, and 4) developing a long-term strategic vision. Yet even with the 

recent improvements, the LMD acknowledges that significant deficiencies 

exist in the management of housing units, including insufficient visibility over 

units deployed to the field and a lack of property controls over units at disaster 

sites. 

FEMA currently maintains an inventory of more than 130,000 THUs (travel 

trailers and manufactured housing) that were used to shelter hurricane victims, 

but are now considered non-mission capable. FEMA plans to dispose of most 

of the current inventory. FEMA will eventually increase the number of readyfor-dispatch units from the current number of 2,229 to about 4,000 units that 

will be available in case of a disaster. This number will be augmented by 

units acquired from vendors, as needed. Figure 3 provides a breakdown of 

mission-capable housing units by storage location. 

3 

FEMA Temporary Housing Property Management Controls 
 

 

 

Figure 3: Number of Units and Percent Mission Capable 

Location Number of 

Units 

Number of Units 

Ready for Dispatch 

(Mission Capable) 

Percent Mission 

Capable 

Selma, AL 10,676 1,301 12% 

Hope, AR 18,174 615 3% 

Cumberland, MD 1,243 313 25% 

Other Sites 107,568 0 0% 

Total 137,661 2,229 2% 

Source: Urbach Kahn & Werlin based on data provided by FEMA 

Results of Audit 

Temporary Housing Property Management 

Although FEMA has controls in place to ensure that its system can accurately 

reflect what is on hand and can track asset movement, we identified problems 

related to missing documents, noncompliance with established procedures, 

and a need for guidance regarding records maintenance. During our 

fieldwork, we selected seven of the largest storage facilities that contain 65% 

of FEMA’s THU inventory. The results of our tests are summarized below. 

Transaction Controls: When units arrive at the storage sites, several controls 

are in place to ensure that the receiving process is completed and the housing 

units are received and recorded in a manner consistent with established 

criteria.1

 Established controls include (1) recording and inspecting incoming 

units, (2) reconciling received assets with shipping documents, (3) recording 

discrepancies, (4) applying an identifying barcode, and (5) scanning assets 

into the automated system. 

During our review, we identified insufficient management controls at some 

sites, including insufficient separation of duties between receiving functions. 

Controls varied from site to site; some locations required a second review and 

sign-off, while others did not. Furthermore, the data entry function does not 

have adequate supervision and is susceptible to the transaction errors we 

found, including inaccurate, incomplete, and unreliable records. 

Accountable Property Records: We observed procedures, examined 

processes and paperwork related to initial property receipt and subsequent 

1

 FEMA’s Property Management Manual 6150.1, and Logistics’ Standard Operating Procedures. 

4 

FEMA Temporary Housing Property Management Controls 
transfer, and compared a sample of inventory to records. In 46% (77 of 167) of 

the cases, the records were not adequate to document the original receipt of 

housing units. For example, either the original bill of lading could not be 

located or other evidence of receipt of the property could not be verified. In 

some cases, the insufficient information made it difficult to determine when 

FEMA received the property. Officials told us that many records were lost in 

the aftermath of Hurricane Katrina when record maintenance and retention 

procedures were not closely followed at the government-managed and 

contractor-managed housing sites while the units were occupied by disaster 

victims. Figure 4 shows the breakdown of housing unit samples with receipt 

documentation. 

Figure 4. Receipt Documentation 

Adequate 

Record 

54% 

Inadequate 

Record 

46% 

Source: Urbach Kahn & Werlin data 

After disaster victims were relocated to more permanent accommodations, the 

THUs were transferred to storage sites for cleaning and refurbishment, or for 

eventual disposal. Our tests disclosed that 49% (81 of 167) of those returned 

units did not have adequate transfer documentation. Often, the transfer of 

several housing units was recorded on a single transfer document, and data 

entry errors occurred when the units were not shipped at the same time or 

were shipped to multiple locations. When this occurs, FEMA can lose track 

of some housing units, which happened to about half of the units in our 

sample. Additionally, FEMA can lose track of items that it transfers when 

they do not use hand receipts (also known as custody receipts) that are used to 

account for and control nonexpendable and sensitive items transferred 

between sites and personnel. Prior OIG reports identified this as a problem 

and determined that many travel trailers and manufactured housing units could 

5 

FEMA Temporary Housing Property Management Controls 
not be located.2

 Figure 5 displays the breakdown of housing unit samples 

with transfer documentation. 

Figure 5. Transfer Documentation 

Inadequate 

Record 

49% 

Adequate 

Record 

51% 

Source: Urbach Kahn & Werlin data 

We also tested other accountable assets at these facilities, (e.g., trucks, radios, 

transponders, tents) and could not locate 16% (7 of 45) of the items in the 

inventory. Further, site personnel had not updated the property records to 

show 4% (2 of 45) of the items located on the site. 

Recently, FEMA enhanced inventory records to include full transaction 

histories for asset acquisition, transfer, and disposition. On a case-by-case 

basis, the property managers were able to provide full transaction histories of 

our sample to show the movement of housing units when the records were 

otherwise unavailable. 

Site Mapping: Site mapping is an automated inventory management tool that 

identifies the precise location of each THU or other accountable item. We 

conducted tests of housing units and related property to verify whether the 

listed units actually existed and whether all units in storage were properly 

entered into agency records. We determined that 15 % (49 of 320) of housing 

units could not be initially located at storage sites and required additional 

searching before they were found. This occurred because the site maps had 

not yet been updated to reflect the current location of the units. In those cases 

where site maps were up to date, site personnel were able to locate all units in 

our sample. Currently, storage site personnel have completed updating site 

2 Logistics Information Systems Need to Be Strengthened at the Federal Emergency Management Agency 

(OIG-08-60), May 2008, and Hurricane Katrina Temporary Housing Technical Assistance Contracts (OIG-08­

88), August 2008. 

6 

FEMA Temporary Housing Property Management Controls 
maps at FEMA’s three primary housing storage sites: Cumberland, MD; 

Hope, AR; and Selma, AL. In addition, as part of a recently developed 

standard operating procedure, FEMA is implementing a uniform site map 

scheme and is updating site storage records through periodic inventory counts 

and the expanded use of handheld barcode scanners. 

Conclusion 

Most of the instances of missing records that we encountered involved 

returned Katrina-era housing units that are not mission-capable and scheduled 

for disposal. Regarding the mission-capable units, and all future incoming 

units, FEMA needs to ensure that established procedures for receipt and 

transfer of units are followed consistently at all storage sites. Although 

positive steps have been taken to improve asset visibility through enhanced 

site mapping, more needs to be done to strengthen controls over recording 

transactions at the sites and ensuring that they are entered into agency records. 

Recommendation 

We recommend that the Administrator, Federal Emergency Management 

Agency: 

Recommendation #1: Ensure that storage sites consistently follow 

established procedures for recording transactions and entering them into 

agency records. 

Other Program Issues 

In connection with this audit, we observed that FEMA’s property management 

system is also inadequate to meet more specific temporary housing program 

management requirements. LMD personnel have identified the need to track 

extensive details on THUs’ attributes (e.g., number of bedrooms, wheelchair 

accessibility, appliances, heat and air conditioning features) so an appropriate 

unit can be deployed where needed. They also report the need to track lifecycle information such as unit condition, the status of repairs and 

refurbishment. To meet those needs, storage site personnel have found it 

necessary to create manual spreadsheets that they use to track specific THU 

attributes that are not currently captured in FEMA’s existing automated 

system. 

Without an effective system to manage THU, FEMA is hindered in day-to-day 

operations and cannot accurately track and report detailed information on 

mission-capable housing units. The current makeshift process is not prepared 

with, or reconcilable to, FEMA’s existing automated system. The lack of a 

comprehensive process for capturing data necessary to support program needs 

7 

FEMA Temporary Housing Property Management Controls 
results in stakeholders making management decisions without having the 

benefit of complete and accurate information to support those decisions. 

In 2008, FEMA announced plans to upgrade its enterprise information 

technology systems as funding becomes available over the coming 5 years. 

Consideration should be given to the need for maintaining detailed records of 

mission-capable THUs when planning system upgrades. 

Recommendation 

We recommend that the Administrator, Federal Emergency Management 

Agency: 

Recommendation #2: Identify critical data requirements for the temporary housing 

program and incorporate those enhancements into the planned agency-wide systems 

upgrades. 

Management Comments and OIG Analysis 

As indicated in the management response to our September 2009 draft report 

(see Appendix B), FEMA has concurred with each of the recommendations 

and has agreed to notify the OIG concerning the agency’s actions taken or 

planned to implement them. We consider both of the recommendations 

resolved because of the steps proposed to address them, and will close the 

recommendations as corrective actions are implemented. 

8 

FEMA Temporary Housing Property Management Controls 
Appendix A 

Purpose, Scope, and Methodology 

The Office of Inspector General contracted with Urbach Kahn & 

Werlin LLP, Certified Public Accountants, to audit FEMA’s 

temporary housing management controls. The audit objectives 

were to assess property management controls and practices at 

FEMA and provide recommendations for improvements of the 

accountable property system as managed by the Logistics 

Management Directorate’s temporary housing unit program. 

The scope of the audit covered property management controls 

since the program’s formation in 2004 and practices in relation to 

the temporary housing units purchased directly by FEMA for 

hurricane relief efforts, as well as items to include vehicles, 

tractors, and other equipment at logistics’ housing storage/staging 

sites. We reviewed FEMA’s current temporary housing inventory 

and selected a sample of units to test the accuracy of the data by 

performing existence and completeness testing over inventory 

recorded in the logistics system as of March 2009. 

This audit was performed under the authority of the Inspector 

General Act of 1978, as amended. Audit fieldwork was conducted 

from January through May 2009 in the Washington, DC, area and 

at several field sites. We conferred with FEMA officials 

throughout the audit, discussing control processes, procedures, and 

current property management initiatives. Field sites included 

temporary housing storage and staging sites in Selma, AL; Hope, 

AR; Lumberton, MS; Lottie, Melville, and Baton Rouge, LA; and 

Cumberland and Frostburg, MD, where we verified inventories of 

temporary housing units and other assets, and tested agency 

records. 

9 

FEMA Temporary Housing Property Management Controls 
Appendix B 

Management Comments to the Draft Report 

10
 

FEMA Temporary Housing Property Management Controls 
Appendix B 

Management Comments to the Draft Report 

11
 

FEMA Temporary Housing Property Management Controls 
Appendix C 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff for Operations 

Chief of Staff for Policy 

Deputy Chiefs of Staff 

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

FEMA Administrator 

FEMA Chief of Staff 

FEMA Chief Financial Officer 

FEMA Assistant Administrator, Logistics Management Directorate 

FEMA Director, Office of Management 

FEMA Audit Liaison (DP 9O 01) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as appropriate 

12 

FEMA Temporary Housing Property Management Controls 
ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4100, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal or noncriminal 

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.