United States Government Accountability Office

GAO Testimony 

Before the Committee on Government 

Reform, House of Representatives

HURRICANE KATRINA

Policies and Procedures Are 

Needed to Ensure 

Appropriate Use of and 

Accountability for 

International Assistance 

Statement of Davi M. D’Agostino, Director

Defense Capabilities and Management 

and 

McCoy Williams, Director 

Financial Management and Assurance 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Thursday, April 6, 2006

 

GAO-06-600T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 6, 2006

HURRICANE KATRINA

Policies and Procedures Are Needed to 

Ensure Appropriate Use of and 

Accountability for International 

Assistance 

Highlights of GAO-06-600T, a testimony 

before the Committee on Government 

Reform, House of Representatives

In response to Hurricane Katrina,

countries and organizations

donated to the United States 

government cash and in-kind 

donations, including foreign 

military assistance. The National 

Response Plan establishes that the

Department of State (DOS) is the

coordinator of all offers of

international assistance. The

Federal Emergency Management 

Agency (FEMA) within the

Department of Homeland Security

(DHS) is responsible for accepting

the assistance and coordinating its 

distribution. GAO’s testimony 

covers (1) the amount and use of

internationally donated cash and 

(2) the extent to which federal 

agencies with responsibilities for 

international in-kind assistance

offered to the United States had 

policies and procedures to ensure 

the appropriate accountability for 

the acceptance and distribution of 

that assistance. 

What GAO Recommends

In its related report, (GAO-06-460) 

GAO made six recommendations 

designed to improve the policies, 

procedures, planning, and 

oversight of international cash and 

in-kind donations to the U.S.

government in response to 

disasters. In comments on the 

draft report, DOD and DHS 

generally agreed with GAO’s 

recommendations and cited actions 

being taken to further refine 

processes and procedures for 

managing international disaster

donations to the United States. 

Because the U.S. government had not received such substantial amounts of 

international disaster assistance before, ad hoc procedures were developed 

to accept, receive and distribute the cash and in-kind assistance. 

Understandably, not all procedures would be in place at the outset to 

provide a higher level of accountability. The Administration recognized the 

need for improvement in its recent report on lessons learned from Hurricane 

Katrina. 

GAO was able to track the cash donations received to designated U.S. 

Treasury accounts or disbursed. In the absence of policies, procedures, and 

plans, DOS developed an ad hoc process to manage $126 million in foreign 

cash donations to the U.S. government for Hurricane Katrina relief efforts. 

As cash donations arrived, a National Security Council (NSC)-led

interagency working group was convened to make policy decisions about 

the use of the funds. FEMA officials told GAO they had identified and 

presented to the working group a number of items that the donated funds 

could be spent on. The NSC-led interagency working group determined that 

use of those donated funds, once accepted by FEMA under the Stafford Act, 

would be more limited than the wider range of possible uses available if the 

funds were held and then accepted under the gift authorities of other 

agencies. In October 2005, $66 million of the donated funds were spent on a 

FEMA case management grant, and as of March 16, 2006, $60 million 

remained undistributed in the DOS-designated account at the Treasury that 

did not pay interest. Treasury may pay interest on funds accepted by FEMA 

under the Stafford Act. According to DOS, an additional $400 million in 

international cash donations could arrive. It is important that cash 

management policies and spending plan options are considered and in place 

to deal with the forthcoming donations so that the purchasing power of the 

donated cash is maintained for relief and reconstruction. 

FEMA and other agencies did not have policies and procedures in place to 

ensure the proper acceptance and distribution of in-kind assistance donated 

by foreign countries and militaries. In-kind donations included food and 

clothing. FEMA and other agencies established ad hoc procedures. 

However, in the distribution of the assistance to FEMA sites, GAO found that 

no agency tracked and confirmed that the assistance arrived at their 

destinations. Also, lack of procedures, inadequate information up front 

about the donations, and insufficient coordination resulted in the U.S. 

government agreeing to receive food and medical items that were unsuitable 

for use in the United States and storage costs of about $80,000. The 

procedures also allowed confusion about which agency was to accept and 

provide oversight of foreign military donations. DOD’s lack of internal 

guidance regarding the DOS coordinating process resulted in some foreign 

military donations that arrived without DOS, FEMA, or DOD oversight. 

www.gao.gov/cgi-bin/getrpt?GAO-06-600T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Davi M. 

D'Agostino, (202) 512-5431, or McCoy 

Williams, (202) 512-9095. 
Mr. Chairman and Members of the Committee: 

We are pleased to be here today to discuss the results of GAO’s work 

concerning the accountability for international assistance for Hurricane 

Katrina, which is based on the report that we issued today.1

 Hurricane 

Katrina brought death, devastation, and destruction to the Gulf Coast 

states causing billions of dollars in damage and dislocating thousands of 

residents. In response to the disaster, many foreign countries and 

organizations offered cash and in-kind assistance, including foreign 

military donations, to the United States.2

In addition to relevant statutes, Executive Orders, and directives, the 

National Response Plan (NRP) is the framework for managing domestic 

events. According to the NRP, the Department of State (DOS) is the 

coordinator for all offers of international assistance.3

 For Hurricane 

Katrina, DOS established a task force to coordinate the offers of foreign 

assistance and to provide the Federal Emergency Management Agency 

(FEMA) information regarding the offers.4

 FEMA used the Stafford Act5 to 

accept some of the assistance, and after acceptance, it was then 

responsible for coordinating the distribution of the assistance and 

ensuring it was distributed as intended. To accomplish these tasks, FEMA 

requested support from the Office of Foreign Disaster Assistance (OFDA), 

an organization within the U.S. Agency for International Development 

(USAID), to manage all logistics/operations support to coordinate the 

international in-kind assistance for FEMA. DOD was involved in the 

 1

GAO, Hurricane Katrina: Comprehensive Policies and Procedures Are Needed to Ensure

Appropriate Use of and Accountability for International Assistance, GAO-06-460

(Washington, D.C.: Apr. 6, 2006). 

2

 In-kind donations are noncash items such as food, clothing, blankets, and tents that were

donated by foreign countries to the U.S. government. Foreign military donations came 

directly from foreign militaries to the United States and included such items as the use of 

amphibious ships, divers, and pumps. 

3

 Also, pursuant to Homeland Security Presidential Directive 5, the Secretary of Homeland

Security is the principal federal official for domestic incident management, and the 

Secretary of State is charged with the responsibility to coordinate international activities 

related to the prevention, preparation, response, and recovery from a domestic incident 

within the United States. 

4

 The U.S. government did not accept all offers of assistance. For example, the United 

States did not accept one offer of cash from a country due to ongoing U.S. sanctions 

against the country. 

5

 Robert T. Stafford Disaster Relief and Emergency Act, 42 U.S.C. § 5201 (b). 

Page 1 GAO-06-600T 
receipt of disaster relief donations from foreign militaries. In addition to 

the agencies mentioned above, the National Security Council (NSC) also 

had a role to play in the federal response to the hurricane. The NRP 

section on principal organizational elements states that issues that require 

policy adjudication or that fall outside the Secretary of Homeland 

Security’s areas of authority are elevated for resolution through the 

Homeland Security Council6

 and the National Security Council system. 

The NRP also includes financial management guidance that states that 

federal agencies are to use proper federal financial principles, policies, 

regulations, and management controls to ensure proper accountability of 

funds. To safeguard assets, agencies can use the Comptroller General’s 

Standards for Internal Controls in the Federal Government.

7

 These 

standards provide federal agencies with the framework necessary to 

establish internal controls and thus safeguard and monitor assets and 

inventory to prevent waste, loss, or unauthorized use. 

Our testimony today is focused on (1) the amount of cash that foreign 

countries donated, and the extent to which cash had been used to assist in 

the relief efforts; and (2) the extent to which those federal agencies with 

responsibilities regarding the international assistance had policies and 

procedures in place to ensure the appropriate accountability for the 

acceptance and distribution of in-kind donations, including foreign 

military donations. 

Given that the U.S. government had never before received such substantial 

amounts of international disaster assistance, ad hoc procedures were 

developed to manage the acceptance and distribution of the cash and inkind assistance. It is understandable that not all procedures would be in 

place at the outset to guide the acceptance and distribution of the 

assistance and provide a higher level of accountability. 

Summary 

In the absence of guidance for international cash donations for a domestic 

disaster, DOS developed an ad hoc process to manage cash donations 

 6

 The Homeland Security Council ensures the coordination of all homeland security-related 

activities among executive departments and agencies and promotes the effective 

development and implementation of all homeland security policies. 

7

 GAO, Standards for Internal Controls in the Federal Government, GAO/AIMD 00-21.3.1

(Washington, D.C.: November 1999). 

Page 2 GAO-06-600T 
from 36 countries that totaled $126 million. DOS recorded the funds in a 

designated account at the U.S. Treasury, and we were able to account for 

the deposits and disbursements of the cash. As cash donations arrived, an 

NSC-led interagency working group was established to make policy 

decisions about the use of the funds. FEMA officials told us that they had

identified an account that could be credited with interest to receive the 

international cash donations and presented to the working group a 

number of items that the donated funds could be spent on. The NSC-led 

interagency working group determined that the use of the donated funds,

if accepted under the Stafford Act, would be more limited than if the funds 

were held until accepted under the gift authorities of other agencies. In

October 2005, FEMA accepted $66 million of donated funds under the 

Stafford Act and spent the funds on a case management grant to provide 

case workers to assist 100,000 households affected by Hurricane Katrina. 

As of March 16, 2006, $60 million had not been distributed and remained in 

an account at Treasury that did not pay interest.8

 Treasury may pay 

interest on funds accepted by FEMA under the Stafford Act. Since 

Treasury did not have the authority to pay interest on the funds in the DOS 

account, the purchasing power of those funds held in the DOS account

have decreased due to inflation. Further since an additional $400 million 

or more in potential donations could materialize, it is important that cash 

management policies and plans be implemented to address the 

forthcoming funds to maintain the purchasing power of the donated funds. 

At the time of the Hurricane Katrina disaster, FEMA, USAID/OFDA, and 

DOD lacked sufficient policies and procedures to adequately ensure 

appropriate accountability for the acceptance and distribution of in-kind 

donations—including foreign military donations. Lacking this guidance, 

these agencies established ad hoc policies and procedures to account for 

the acceptance and distribution of assistance; however, the ad hoc policies 

and procedures did not include internal controls for the appropriate 

federal agencies to maintain adequate oversight of the assistance that 

would assure the assistance was received at designated distribution 

points. For example, FEMA and USAID/OFDA were unable to provide us 

evidence that they had determined or confirmed that international in-kind

assistance arrived at FEMA distribution points. Also, the lack of guidance,

inadequate information up-front about the nature and content of foreign

 8

 On March 16, 2006, DOS and the Department of Education (ED) signed a Memorandum of 

Agreement that states that $60 million will be transferred to ED for use in school 

reconstruction projects and other projects in the Hurricane Katrina-affected areas. We did

not review the details of this agreement. 

Page 3 GAO-06-600T 
offers of in-kind assistance, and insufficient advance coordination before

agreeing to receive items, resulted in food and medical items, such as 

Meals Ready to Eat (MREs) and medical supplies that arrived and did not 

meet USDA or FDA standards and thus could not be distributed in the 

United States. This resulted in storage costs of about $80,000. For 

receiving foreign military donations for disaster relief, DOS established a 

process to coordinate with FEMA and DOD, but the procedures allowed 

for confusion about which agency was to accept these items. FEMA and 

DOD each assumed the other agency had accepted these donations under 

their respective gift authorities, but it is not clear either agency did so. As a 

result, even for the foreign military donations that were vetted through the 

DOS process, it is unclear whether any agency properly accepted or 

maintained oversight of these donations and knew how they were 

eventually used. In addition, DOD’s lack of internal guidance regarding the 

DOS task force coordinating process resulted in some foreign military 

donations that arrived without DOS, FEMA, or DOD knowledge or 

oversight. 

Officials from DOS, FEMA, and DOD acknowledged the need for 

delineated policies and procedures to manage international assistance in 

the event that the United States receives international assistance in the 

future. As called for by The Federal Response To Hurricane Katrina: 

Lessons Learned,

9

 officials from DOS, FEMA, and DOD told us that by 

June 1, 2006, they will provide policies and procedures for managing 

international assistance to the Homeland Security Council. We made six 

recommendations that focus on specific areas for agencies with a role in 

international assistance to develop in the National Response Plan or other 

appropriate plan. Our recommendations complement the administration’s 

recommendations, but are more specific in some areas, such as the 

management of cash donations. For example, we recommended that 

alternative cash management options be considered, including the 

placement of cash donations in an account that would pay interest while 

decisions are made regarding the use of the donations. We also 

recommended that oversight of in-kind donations be maintained by 

tracking the donations from the time of receipt to disbursement, to 

provide reasonable assurance that assistance is delivered as intended. In 

addition, we recommended that plans be established for the acceptance of

donated items that include coordination with regulatory agencies, such as 

 9

The White House, The Federal Response To Hurricane Katrina: Lessons Learned

(Washington, D.C.: Feb. 23, 2006). 

Page 4 GAO-06-600T 
USDA and FDA, in advance to prevent items that cannot be distributed 

from coming into the United States. We also recommended that DOD 

develop and issue internal guidance to commanders to ensure that all

foreign military donations for disaster relief are coordinated through DOS 

to ensure appropriate acceptance, coordination, and oversight of the 

donations. In commenting on our draft report, DOD and DHS generally

agreed with our recommendations. 

In the absence of international cash donation management policies, 

procedures, and plans, DOS developed an ad hoc process to manage the 

cash donations flowing to the U.S. government from other countries for 

Hurricane Katrina relief efforts. By September 21, about $115 million had 

been received and as of December 31, 2005, DOS reported that $126 

million had been donated by 36 countries. Our review noted that DOS’s ad 

hoc procedures did ensure the proper recording of international cash 

donations and we were able to reconcile the funds received with those 

held in the designated DOS account at Treasury. Also, an NSC-led 

interagency working group was established to determine uses for the 

international cash donations for domestic disaster relief. In October 2005,

$66 million of the $126 million donated had been accepted by FEMA under 

the Stafford Act and used for a Hurricane Katrina relief grant. As of March 

16, 2006, the other $60 million from international donations remained 

undistributed. Once accepted by FEMA under the Stafford Act, funds 

would be limited to use on activities in furtherance of the act. We were 

told that the NSC-led interagency working group did not transfer the funds 

to FEMA because it wanted to retain the flexibility to spend the donated 

funds on a wider range of assistance than is permitted under the Stafford 

Act. During this period and while deliberations were ongoing, the funds 

were kept in an account that did not pay interest, thereby diminishing the 

purchasing power of the donated funds and losing an opportunity to 

maximize the resources available for relief. Under the Stafford Act, FEMA 

could have held the funds in an account that can pay interest, but Treasury 

lacks the statutory authority to credit DOS-held funds with interest. A 

number of options could be considered to address this situation if there 

are dual goals of flexibility and maintaining purchasing power. 

Cash Donation 

Management Policies, 

Procedures, and Plans 

Were Not in Place 

Key Events Involving the 

Use of International Cash 

Donations 

Table 1 below shows the dates of key events in the receipt and distribution 

of the international cash donations according to documentation received 

and interviews with DOS and FEMA officials. 

Page 5 GAO-06-600T 
Table 1: International Cash Donations Received and Used–-Key Dates 

Date Event

August 29, 2005 Hurricane Katrina hit Gulf Coast region 

September 2, 2005 DOS Hurricane Katrina Task Force established

September 3, 2005 DOS provided deposit instructions to diplomatic and consular 

posts for foreign cash donations 

September 6, 2005 FEMA identified account that can earn interest 

September 21, 2005 About $115 million in foreign donations received 

September 23, 2005 FEMA presented items the funds could be spent on 

October 20, 2005 DOS transferred $66 million to FEMA 

October 28, 2005 FEMA awarded case management services grant to United

Methodist Committee on Relief 

February 28, 2006 $60 million in remaining donations undistributed 

March 16, 2006 Memorandum of Agreement signed between DOS and 

Department of Education to spend remaining $60 million 

Source: GAO analysis.

In early September 2005, FEMA officials identified an account at the U.S. 

Treasury for recording international cash donations and a number of 

potential uses for the donations that would help meet relief needs of the 

disaster. By September 21, 2005, about $115 million in foreign cash 

donations had been received. In a paper submitted to the NSC-led 

interagency working group, dated September 22, 2005, DOS recognized 

that every effort should be made to disburse the funds to provide swift and 

meaningful relief to Hurricane Katrina victims without compromising 

needed internal controls to ensure proper management and effective use 

of the cash donations and transparency. FEMA officials told us that on 

September 23, 2005, they had identified and proposed to the NSC-led 

interagency working group that the international cash donations could be 

spent on the following items for individuals and families affected by 

Hurricane Katrina: social services assistance, medical transportation, 

adapting homes for medical and handicap needs, job training and 

education, living expenses, building materials, furniture, and 

transportation. At NSC’s request, on October 7, 2005 FEMA presented 

more detailed proposals for using the foreign donations. On October 20,

2005, with the NSC-led interagency working group consensus, DOS 

transferred to FEMA $66 million of the international donations to finance 

case management services to help up to 100,000 households affected by 

Hurricane Katrina define what their needs are and to obtain available 

assistance. 

Page 6 GAO-06-600T 
As of February 2006, the remaining $60 million had not been released, 

pending the NSC-led interagency working group determination about the 

acceptance and use of the remaining funds. DOS and FEMA officials told

us that for the remaining $60 million in donated funds, the NSC-led 

interagency working group had considered a series of proposals received 

from a number of both public and private entities. At the time of our 

review, we were told that the NSC-led interagency working group decided 

that the vital needs of schools in the Gulf Coast area would be an 

appropriate place to apply the donations, and that they were working with 

the Department of Education to finalize arrangements to provide funding 

to meet those needs. FEMA officials told us that under the Stafford Act, 

they could use donated funds for projects such as rebuilding schools, but 

projects for new schools buildings are not consistent with Stafford Act 

purposes unless replacing a damaged one. Also, according to DHS 

officials, the Act would have required that receiving entities match FEMA 

funds for these purposes. However, because of the devastation, the 

entities would have difficulty matching FEMA funds, which in essence 

limited FEMA from doing these types of projects. According to DHS, 

FEMA considered whether it would be useful for donated funds to 

contribute to the non-federal share for applicants having trouble meeting 

the non-federal share, but would need legislative authority to use it to 

match federal funds. We contacted NSC to further discuss these matters; 

however NSC did not respond to our requests for a meeting. On March 16, 

2006, DOS and the Department of Education signed a Memorandum of 

Agreement regarding the use of $60 million of the international cash 

donations. 

Inadequate Cash 

Management Policies and 

Planning Reduced 

Purchasing Power of Some 

International Cash 

Donations for Disaster 

Relief 

Advance planning is very important given the outstanding pledges of $400 

million or more that DOS officials indicated may still be received. While 

acknowledging that the U.S. government has never previously had 

occasion to accept such large amounts of international donations for 

disaster relief, going forward, advance planning is a useful tool to identify

potential programs and projects prior to the occurrence of an event of 

such magnitude. In the case of Hurricane Katrina, while the NSC-led 

interagency working group reviewed various proposals on the use of the 

remaining $60 million, DOS held the funds in an account at the U.S. 

Treasury that did not earn interest. Treasury lacks the statutory authority 

to credit those DOS-held funds with interest. For the time the funds were 

not used, their purchasing power diminished due to inflation. If these 

funds had been placed in an account that could have been credited with 

interest to offset the erosion of purchasing power, the amount of funds 

available for relief and recovery efforts would have increased while 

Page 7 GAO-06-600T 
decision makers determined how to use them. The U.S. government would 

be responsible for paying the interest if these funds were held in an 

account at the Treasury that can pay interest. Although the Stafford Act 

does not apply to the donated funds maintained in the DOS account at 

Treasury, the Stafford Act does provide that excess funds accepted under 

the Act may be placed in Treasury securities, and the related interest paid 

on such investments would be credited to the account. Had the foreign 

monetary donations been placed in Treasury securities, we estimate that 

by February 23, 2006, the remaining funds for relief efforts would have 

increased by nearly $1 million.10

The Administration’s report, The Federal Response To Hurricane 

Katrina: Lessons Learned, released on February 23, 2006, recognized that

there was no pre-established plan for handling international donations and 

that implementation of the procedures developed was a slow and often 

frustrating process. The report includes recommendations that DOS 

should establish before June 1, 2006, an interagency process to determine 

appropriate uses of international cash donations, and ensure timely use of 

these funds in a transparent and accountable manner, among others. DOS 

officials recognized that the ad hoc process needed to be formalized and 

planned to develop such procedures by June 1, 2006. When developing

policies and procedures, it is important that consideration also be given to

strategies that can help maintain the purchasing power of the international 

donations. If the goal is to maintain both purchasing power and flexibility, 

then among the options to consider are seeking statutory authority for 

DOS to record funds in a Treasury account that can pay interest similar to 

donations accepted under the Stafford Act pending decisions on how the 

funds would be used, or to allow DOS to deposit the funds in an existing 

Treasury account of another agency that can pay interest pending 

decisions on how the funds would be used. 

 10Interest was computed based on an estimated average annual yield of 5 percent for 

Treasury Government Account Series from October 21, 2005, to February 23, 2006. 

Page 8 GAO-06-600T 
In the absence of guidance, we found a lack of accountability in the 

management of the in-kind assistance. Specifically, FEMA did not have a 

process in place that confirmed that the in-kind assistance sent to 

distribution sites was received. The lack of guidance, inadequate 

information about the nature and content of foreign offers of in-kind 

assistance, and insufficient advance coordination also resulted in the 

arrival of food and medical assistance that could not be used in the United 

States. Also, the ad hoc procedures created to manage foreign military 

donations allowed for confusion about which agency—FEMA or DOD—

should accept and be responsible for oversight of such donations. 

Because of the lack of guidance to track assistance, USAID/OFDA created

a database to track the assistance as it arrived. We found that 

USAID/OFDA reasonably accounted for the assistance given the lack of 

information on the manifests and the amount of assistance that was 

arriving within a short time. However, on September 14, 2005, FEMA did 

request USAID/OFDA to track the assistance from receipt to final 

disposition. However, the system USAID/OFDA created did not include 

confirming that the assistance was received at the FEMA distribution sites. 

In part, USAID/OFDA did not set up these procedures on its own in this 

situation, because its mission is to deliver assistance in foreign countries

and it had never distributed assistance within the United States. FEMA 

officials told us that they assumed USAID/OFDA had these controls in 

place. FEMA and USAID/OFDA officials could not provide us with 

evidence that confirmed that the assistance sent to distribution sites was 

received. Without these controls in place to ensure accountability for the 

assistance, FEMA does not know if all or part of these donations were 

received at FEMA distribution sites. Internal controls, such as a system to 

track that shipments are received at intended destinations, provides an 

agency with oversight, and for FEMA in this case, they help ensure that 

international donations are received at FEMA destination sites. 

Lack of Guidance 

Regarding the 

Accountability for 

International In-Kind 

Assistance 

Lack of Policies and 

Procedures to Confirm 

Receipt of Goods at 

Distribution Points 

Inadequate Guidance, 

Information, and 

Coordination Resulted in 

the Arrival of Food and 

Medical Items That Could 

Not Be Used 

We noted that the guidance the agencies created did not include policies 

and procedures to help ensure that food and medical supplies that the U.S.

government agreed to receive and came into the United States met U.S. 

standards. The lack of guidance, inadequate information up-front about 

the nature and content of foreign offers of in-kind assistance, and 

insufficient advance coordination with regulatory agencies before agreeing 

to receive them, resulted in food and medical items, such as MREs and 

medical supplies, that came into the United States even though they did 

not meet USDA or FDA standards and thus could not be distributed in the 

Page 9 GAO-06-600T 
United States. We noted that FEMA’s list of items that could be used for 

disaster relief that was provided to DOS was very general and did not 

provide any exceptions, for example, about contents of MREs. DHS 

commented on our report that FEMA repeatedly requested from DOS 

additional information about the foreign items being offered and DOS did 

not respond. Both instances represent lost opportunities to have 

prevented the arrival of items that could not be distributed in the United 

States. The food items included MREs from five countries. Because of the 

magnitude of the disaster, some normal operating procedures governing 

the import of goods were waived. According to USDA and FDA officials, 

under normal procedures, entry documents containing specific 

information, which are filed with U.S. Customs and Border Protection, are 

transmitted to USDA and FDA for those agencies’ use in determining if the 

commodities are appropriately admissible into the United States. Without 

consultation or prior notification to USDA or FDA, the Commissioner of 

U.S. Customs and Border Protection authorized suspension of some 

normal operating procedures for the import of regulated items like food 

and medical supplies. Consequently, USDA and FDA had no involvement 

in the decision making or process of agreeing to receive regulated product 

donations, including MREs and medical supplies, and no opportunity to 

ensure that they would all be acceptable for distribution before the 

donated goods arrived. Both USDA and FDA, based on regulations 

intended to protect public health, prevented distribution of some 

international donations, which resulted in the assistance being stored at a 

cost of about $80,000. 

Policies and Procedures 

Were Lacking in the 

Oversight of Foreign 

Military Donations 

In the absence of policies and procedures, DOS, FEMA, and DOD created 

ad hoc policies and procedures to manage the receipt and distribution of 

foreign military goods and services. However, this guidance left open 

which agency—FEMA or DOD—was to formally accept the foreign 

military assistance and therefore each agency apparently assumed the 

other had done so under their respective gift authorities. As a result, it is 

unclear whether FEMA or DOD accepted or maintained oversight of the 

foreign military donations that were vetted through the DOS Task Force. 

The offers of foreign military assistance included, for example, the use of

amphibious ships and diver salvage teams. FEMA did not maintain 

oversight of the foreign military donations that it accepted through the 

DOS task force. A FEMA official told us that they were unable to tell us 

how the foreign military donations were used because FEMA could not 

match the use of the donations with mission assignments it gave Northern

Command. Moreover, FEMA and Northern Command officials told us of 

instances in which foreign military donations arrived in the United States 

Page 10 GAO-06-600T 
that were not vetted through the DOS task force. For example, we were 

told of military MREs that were shipped to a military base and distributed 

directly to hurricane victims. For the shipments that were not vetted 

through the Task Force, DOS, FEMA, and DOD officials could not provide 

us information on the type, amount, or use of the items. As a result, the 

agencies cannot determine if these items of assistance were safeguarded

and used as intended. 

In closing, since the U.S. government had never before received such 

substantial amounts of international disaster assistance, we recognize that 

DOS, FEMA, USAID/OFDA, and DOD created ad hoc procedures to 

manage the receipt, acceptance, and distribution of the assistance as best 

they could. Going forward, it will be important to have in place clear 

policies, procedures, and plans on managing and using both cash and inkind donations in a manner that provides accountability and transparency.

If properly implemented, the six recommendations included in our report 

issued today will help to ensure that the cognizant agencies fulfill their 

responsibilities to effectively manage and maintain appropriate and 

adequate internal control over foreign donations.

Mr. Chairman, this concludes GAO’s prepared statement. We would be 

happy to respond to any questions that you or Members of the Committee 

may have. 

For further information on this testimony, please contact either Davi M. 

D’Agostino at (202) 512-5431 or dagostinod@gao.gov or McCoy Williams at 

(202) 512-9095 or williamsm1@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Individuals making key contributions to this testimony 

included Kay Daly, Lorelei St. James, Jay Spaan, Pamela Valentine, and 

Leonard Zapata. 

GAO Contacts and 

Staff 

Acknowledgments 

Page 11 GAO-06-600T (350767) 
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