Department of Homeland Security 

Office of Inspector General 

FEMA's Temporary Housing Unit 


Program and Storage Site Management
 

OIG-09-85 June 2009 
 

Office of Inspector General 

U.S. Department of Homeland Security

Washington, DC 20528 

 June 29, 2009 

Preface 

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

established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment 

to the Inspector General Act of 1978. 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 addresses the strengths and weaknesses of the Federal Emergency 

Management Agency’s (FEMA) Temporary Housing Unit Program site management and 

oversight. It is based on interviews with employees and officials of relevant agencies and 

institutions, direct observations, and a review of applicable documents. 

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

office, 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. 

Richard L. Skinner 


Inspector General 

 

 

Table of Contents/Abbreviations 


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

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

Results of Review ................................................................................................................3


 Budget Development and Oversight...............................................................................3 


 Contract Management.....................................................................................................4 


Conclusion ......................................................................................................................6


 Recommendations...........................................................................................................7


 Management Comments and OIG Analysis ...................................................................7 


Appendices

 Appendix A: Purpose, Scope and Methodology ............................................................8 


Appendix B: Management Comments to the Draft Report ............................................9 


Appendix C: Major Contributors to this Report ...........................................................12 


Appendix D: Report Distribution..................................................................................13 


Abbreviations 

COTR Contracting Officer’s Technical Representative 


DHS Department of Homeland Security 


EHU Emergency Housing Unit 


FAR Federal Acquisition Regulation 


FEMA Federal Emergency Management Agency 


FPS Federal Protective Service 


GCRO Gulf Coast Recovery Office 


LMD Logistics Management Directorate 


IFMIS Integrated Financial Management Information System
 

OIG Office of Inspector General 


OMB Office of Management and Budget 


THU Temporary Housing Unit 

OIG
 

Department of Homeland Security 

Office of Inspector General 

 Executive Summary 

The logistics function of the Federal Emergency Management 

Agency (FEMA) has undergone dramatic changes following a 

Congressionally-mandated reorganization in 2007. As part of that 

reorganization, the new Logistics Management Directorate (LMD) 

has strengthened operations, property management, and 

coordination with other emergency providers, and has increased 

staffing with experienced logisticians. 

Notwithstanding the initiatives that have been introduced, there are 

issues with the LMD field staging areas that need to be addressed. 

At the time of our fieldwork in mid-2008, LMD did not have an 

accounting system that adequately tracked field sites’ expenses. 

Consequently, field managers reported difficulty in overseeing 

their sites’ finances. Field managers were also dissatisfied with the 

staging area contracts for security and grass cutting services. 

The contracts for security guards and for grass cutting services 

were managed by remotely located contracting officials, without 

on-site task monitors to oversee contractor performance. Because 

FEMA did not have adequate contract controls in place, it overpaid 

for services that, in some instances, hindered operations and posed 

potential safety hazards. 

We conducted this review at the request of FEMA senior 

management, who asked us to examine several issues that occurred 

prior to the creation of LMD. This report focuses on conditions at 

the field sites at the time of our visits in 2008, and contains three 

recommendations to assist FEMA in its management and oversight 

of the field staging areas. FEMA has concurred with the reports’ 

findings and has agreed to take corrective actions, some of which 

are already underway. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

Page 1
 Background 

In 2007, the Federal Emergency Management Agency (FEMA) 

requested the Office of Inspector General (OIG) to review certain 

inconsistencies that had come to the agency’s attention involving 

the management of the hundreds of thousands of travel trailers and 

mobile homes that had been purchased to shelter displaced disaster 

victims following Hurricane Katrina. Those concerns involved 

actions taken by the predecessor office of the current Logistics 

Management Directorate (LMD). 

This audit represents the third and final phase of our 

comprehensive review of the Temporary Housing Unit2

 (THU) 

program in response to FEMA’s request. In this most recent 

phase, we reviewed the agency’s management of the THU program 

at headquarters and at nine temporary housing staging areas in 

Louisiana and Mississippi. The previous phases addressed 

FEMA’s (1) use of proceeds from the sale of trailers,3

 and 

(2) acquisition of two warehouses.4 During the course of our field 

work on the three OIG reviews, the logistics function was 

undergoing a transformation in connection with FEMA’s 

reorganization that was mandated by the Post-Katrina Emergency 

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

included the formation of LMD. 

The reorganization has introduced initiatives and management 

controls that were absent in FEMA’s logistics program prior to 

2007. What had been an improvised logistics operation before the 

reorganization has been replaced by an organized unit, staffed by 

experienced logisticians. The previous organization’s operations 

were marked with fiscal irregularities and unauthorized spending, 

as we previously reported. The new organization has increased 

staffing at headquarters and the field, issued standardized policies 

and procedures, and put in place an organization that emphasizes 

management control. Field sites previously managed by the Gulf 

Coast Recovery Office (GCRO) came under the direct control of 

LMD in 2008. 

LMD has taken steps to strengthen operations, property 

management, and coordination with partners outside the agency. 

2

 The THU originally was referred to as EHU (Emergency Housing Unit); it was changed in 2008. 
 3

 OIG-08-23, Review of FEMA’s Use of Proceeds from the Sales of Emergency Housing Units, dated
 

February 2008. 


4

 OIG-09-77, FEMA’s Acquisition of Two Warehouses to Support Hurricane Katrina Response 


Operations, dated June 2009.
 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Some of the shortcomings we are reporting are remnants of the 

“old” FEMA. However, they have continued since 2007, and 

therefore, are the responsibility of LMD. We are currently 

conducting a review of how the logistics reorganization has 

prepared FEMA to respond to catastrophic disasters. 

Results of Review 

Notwithstanding the initiatives that have been introduced, the 

LMD field staging areas face challenges that need to be addressed 

by FEMA headquarters. Those issues include oversight of the 

field budgeting and contracting. Each site we visited was led by 

experienced managers, and staffed by individuals who focused on 

administration, security, maintenance, and property accountability. 

Staffing issues that did arise involved the contractor workforce. 

The nine staging areas we visited contain more than 75,000 

temporary housing units that FEMA plans to eventually dispose. 

Until a number of issues are resolved, including formaldehyde 

contamination, those sites will remain open and collectively will 

cost FEMA more than $50 million each year to operate. 

Budget Development and Oversight 

One issue that surfaced in the field and at headquarters was the 

inability of THU managers to access the staging area sites’ budget 

and accounting data. As part of the logistics transformation, field 

sites that had previously been managed by the GCRO came under 

the direct control of LMD headquarters, and in the process, lost 

access to the GCRO’s off-the-shelf budget and accounting system. 

At the time of our site visits, LMD did not have adequate visibility 

over expenses and could not identify incurred costs by site. 

Similarly, the field managers did not have visibility over their own 

site expenses and budget balances, and thus had difficulty 

managing the sites’ finances with the headquarters-produced 

budget reports. Those budget reports that were produced without 

field input were unreliable and contained erroneous information. 

Examples included construction-related costs at sites that had no 

construction projects, and electric utility expenses at a site that 

operated on government-furnished generators. 

Starting in late 2008, FEMA took steps to address the conditions 

on which we reported. Those initiatives included enhanced budget 

tracking for headquarters and the field and providing bi-weekly 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

Page 3 
 

budget reports to the field. There are plans to enable field 

coordinators to have real-time visibility over the status of their 

budgets by 2010. 

Contract Management 

Site managers were dissatisfied with the contract security guard 

service provided under a Federal Protective Service (FPS) contract. 

The managers reported over-staffing at some sites, including 

round-the-clock guard service at gates that are not being used. 

Furthermore, managers were unable to tell if the guards were 

fulfilling the terms of the contract because they had never been 

provided a copy of the contract. Also, the site managers did not 

have copies of the “post orders” issued by a remotely-located 

contracting official that delineate the guards’ duties. Without these 

documents, site managers could not oversee the guards, or 

determine if they were performing according to the contract. 

Although the sites were in relatively low-risk areas, with only 

occasional trespassing reports, FEMA could not determine if it was 

getting what it paid for under the contract. 

Subpart 37.5 of the Federal Acquisition Regulation (FAR), and the 

implementing guidance in the Office of Management and Budget’s 

(OMB) Office of Federal Procurement Policy Letter 93-15

 requires 

clearly-defined contract requirements, performance standards, and 

effective management oversight. Occasional site visits by the 

remotely-located contracting officer’s technical representative 

(COTR) and FEMA task monitors do not provide adequate 

oversight. FEMA needs to designate technical monitors at each 

site to monitor and ensure that the contract terms and conditions 

are followed. 

Another common concern among site managers was the poor 

performance of the contractor for grass cutting service. This 

service falls under the multi-million dollar contract FEMA has 

with Alutiiq Global Solutions, of which grass cutting at the sites is 

only a small part. FEMA pays more than $4 million a year at those 

9 sites to a contractor that does a poor job cutting the grass. Site 

managers have complained to headquarters, citing that the previous 

arrangement, which used disaster assistance employees for grounds 

maintenance and other tasks, was more effective and cost less than 

the current contract. We observed tall grass at several of the sites 

we visited, where managers expressed their concern that the tall 

5

 OMB Office of Federal Procurement Policy Letter 93-1, Management Oversight of Service Contracting, 

dated May 18, 1994. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

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grass complicates activities and provides a haven for poisonous 

snakes that may have contributed to a snakebite incident at one of 

the Louisiana sites. Furthermore, the tall, un-cut grasses present a 

potential fire hazard during the dry-weather season. 

Mississippi site managers provided headquarters with a cost 

analysis that indicated FEMA could contract with a local grass 

cutting service that would be more reliable and save the 

government more than $1 million each year at the THU sites in 

that state. Headquarters took no action on the site managers’ 

suggestions. 

FEMA needs to stop using the grass cutting contract as a personal 

services contract. The services provided were (1) performed at the 

government-controlled site; (2) integral to the program’s mission; 

and (3) carried out using government-furnished tools and 

equipment. Furthermore, FEMA requested specifically-named 

Alutiiq employees for tasks at FEMA sites. Unless explicitly 

authorized by statute, personal services contracts are prohibited by 

FAR 37.104.6 

Without a COTR or a task monitor at the sites, FEMA does not 

have assurance that the tasks paid for were actually performed. 

The FEMA program office relied on contractor-provided 

documents to support the contractor’s invoices, instead of on-site 

verification. FEMA program officials claimed to be unaware of 

problems with this contract, despite the fact that the field site 

managers had communicated the problems on numerous occasions. 

This lack of contractual control is contrary to Subpart 37 of the 

FAR, and inconsistent with OMB Circular A-123’s7

 guidance on 

management controls, and needs to be addressed. 

Some of these contract deficiencies might have been avoided if the 

contract had been submitted for a legal review as required by the 

Homeland Security Acquisition Manual.8 This contract was not 

presented to FEMA counsel for review, and is another example of 

situations we have observed with large-dollar FEMA contracts 

being awarded without required legal review. 

6

 FAR, subpart 37.104(b) provides that federal agencies shall not award personal services contracts unless 

specifically authorized by statute to do so. FEMA was not specifically authorized to award this personal 

services contract. 7

 OMB Circular A-123, Management’s Responsibility for Internal Control, dated December 2004. 8

 Homeland Security Acquisition Manual subsection 3004.7003(c) (1) requires a legal review of all 

contracts in excess of $500,000. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

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FEMA has taken a number of steps to address the contract-related 

issues. It initiated the acquisition process and anticipates awarding 

a contract by June 2009 to replace the Alutiiq contract that is in its 

last option year. The new contract, which will not include grounds 

maintenance services, has already been reviewed and approved by 

FEMA’s Office of Chief Counsel, and will provide for task 

monitors at each site. A separate grounds maintenance contract 

that will use local vendors for the field sites is also expected to be 

awarded in June 2009. That contract requires COTRs at each site. 

Through training and monitoring, FEMA will ensure that the new 

contracts will not be used as personal services contracts. 

Regarding the security contract, post orders have been requested 

from FPS for each location, and FEMA has appointed an 

individual at each site to assist with invoice certification. FEMA 

has had discussions with FPS regarding the security contract 

compliance, and has requested modifications to change the level of 

guard support at some locations. 

Conclusion 

LMD has undergone significant changes since it was reorganized 

in 2007. As part of that reorganization, LMD has strengthened 

operations, property management, and coordination with other 

emergency providers, and has augmented staffing with experienced 

logisticians. The reorganization also transferred to LMD several 

field sites previously managed by the Gulf Coast Recovery Office. 

The transfer of those field sites introduced management control 

issues, including inadequate budget and accounting data, and lack 

of technical monitors to provide oversight of contracts that furnish 

security and grass cutting services, the latter which was used as a 

personal services contract. 

FEMA has taken corrective actions or plans to address the issues 

discussed in this report. It is developing a detailed corrective 

action plan, including timeframes, to address those issues. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

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Recommendations 

We recommend that the Administrator, Federal Emergency 

Management Agency: 

Recommendation #1: Provide budget and accounting information 

in periodic reports to THU site management. 

Recommendation #2: Designate a technical monitor for each 

THU site for security and grass cutting service contract oversight; 

and provide each site with copies of the contract, post orders, and 

other necessary documents. 

Recommendation #3: Cease using the Alutiiq contract as a 

personal services contract, and improve management controls over 

contractors. 

Management Comments and OIG Analysis 

FEMA concurs with the report’s findings and has agreed to take 

corrective actions to address the recommendations; some actions 

have already been initiated. Those initiatives include enhanced 

budget tracking; bi-weekly field budget reports; and plans for realtime visibility over site budgets. 

Furthermore, FEMA has taken a number of steps to address 

contractual issues, including initiating two new acquisitions to 

replace the Alutiiq contract that have already cleared required legal 

review, and will provide for on-site monitoring to ensure 

compliance with regulations and with contract terms. Security 

contract post orders have been requested from FPS for each 

location, and FEMA has appointed an individual at each site to 

assist with invoice certification. FEMA has discussed contract 

compliance with FPS and has requested modifications to change 

the level of guard support at some locations. 

FEMA has promised to provide us with a detailed corrective action 

plan, including timeframes, to address those issues. FEMA’s 

described actions meet the intent of the three recommendations, 

which are considered resolved, pending receipt of the detailed 

corrective action plan. We will close the recommendations upon 

verification of implemented corrective action. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 

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Appendix A 

Purpose, Scope and Methodology 

This audit was the third phase of a comprehensive review of 

LMD’s Temporary Housing Unit program that we performed at 

FEMA’s request. The first phase examined the agency’s use of 

proceeds from the sale of trailers and mobile homes, and the 

second phase focused on the acquisition of two warehouses. The 

current audit assessed field operations management. 

Specifically, we reviewed the agency’s management of the 

program at nine temporary housing staging areas in Louisiana 

(Baton Rouge, DeRidder, Lottie, and Melville) and Mississippi 

(Carnes, Columbia, Hickory Grove, Lumberton, and Purvis), and 

at two regional coordination centers (Biloxi and Baton Rouge). 

Program costs at those sites exceed $50 million annually. We 

observed field operations and discussed issues with site 

management and with headquarters officials. Our review did not 

include a test of the validity and reliability of any computergenerated data as we did not rely on any computer-generated data 

as part of this audit. 

At the time of our field visits in mid-2008, management of the sites 

had recently transferred to FEMA headquarters. Previously, the 

Gulf Coast Recovery Office managed those sites. That transition 

posed certain complications on which we focused, including 

staffing, budget oversight, maintenance, contracting, and security 

issues. 

This audit was performed under the authority of the Inspector 

General Act of 1978, as amended, and according to Generally 

Accepted Government Auditing Standards for performance audits. 

Audit fieldwork was conducted from April through October 2008, 

in the Washington, DC, area and at several field sites. 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Appendix B 

Management Comments to the Draft Report 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Appendix B 

Management Comments to the Draft Report 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Appendix B 

Management Comments to the Draft Report 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Appendix C 

Major Contributors to this Report 

Gina Smith, Director 

John Meenan, Senior Program Analyst 

Christine Alvarez, Program Analyst 

Kristofer Hensley, Program Analyst 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff for Operations 

Chief of Staff for Policy 

Acting General Counsel 

Executive Secretariat 

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 

Assistant Administrator, Logistics Management Directorate 

Director, FEMA’s Office of Management/Chief Procurement Officer 

FEMA’s Chief Financial Officer 

FEMA Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

FEMA’s Temporary Housing Unit Program and Storage Site Management 


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ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4199, 

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; 

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• 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.