a

GAO

United States Government Accountability Office

Report to Congressional Committees

April 2006 HURRICANE 

KATRINA

Comprehensive 

Policies and 

Procedures Are 

Needed to Ensure 

Appropriate Use of 

and Accountability for 

International 

Assistance

GAO-06-460
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

April 2006

HURRICANE KATRINA

Comprehensive Policies and Procedures 

Are Needed to Ensure Appropriate Use of 

and Accountability for International 

Assistance 

Highlights of GAO-06-460, a report to 

congressional committees 

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. In light of widespread 

congressional and public interest in 

U.S. agencies’ accountability in 

receiving and distributing 

assistance to hurricane victims, 

this report is one of several 

initiated under the authority of the

Comptroller General to review the 

federal government’s response to 

Hurricane Katrina. It examines (1)

the amount and use of 

internationally donated cash, and 

(2) the extent to which federal 

agencies have adequate policies 

and procedures to ensure proper 

accountability for the acceptance

and distribution of that assistance. 

What GAO Recommends

GAO makes 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. DOD and DHS generally

agreed with GAO’s 

recommendations and cited actions 

being taken. 

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-06-460.

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. 
Page i GAO-06-460 Hurricane Katrina International Aid

Contents

Letter 1

Results in Brief 3

Background 6

Foreign Countries Donated Millions in Cash, But Policies, 

Procedures, and Plans Were Not in Place 10

Policies and Procedures Were Lacking in the Acceptance and 

Distribution of in-Kind Donations, Including Foreign Military 

Donations 18

Conclusions 27

Recommendations for Executive Action 28

Agency Comments and Our Evaluation 29

Appendixes

Appendix I: Scope and Methodology 33

Appendix II: Comments from the Department of Defense 35

Appendix III: Comments from the Department of Homeland Security 37

Appendix IV: GAO Contacts and Staff Acknowledgments 40

Related GAO Products 41

Table Table 1: International Cash Donations Received and Used – Key 

Dates 14

Figures Figure 1: Overview of Process Developed to Receive International 

Cash Donations 12

Figure 2: Overview of Process Developed for Accepting, Receiving, 

and Distributing In-Kind Donations 20

Figure 3: Foreign Donated MREs in Storage as of November 9, 

2005 24

Figure 4: Overview of Process Developed for the Acceptance and 

Receipt of Foreign Military Assistance 26
Contents

Page ii GAO-06-460 Hurricane Katrina International Aid

Abbreviations

CBP U.S. Customs and Border Protection

DOD Department of Defense

DHS Department of Homeland Security

DOS Department of State

FDA Federal Drug Administration

FEMA Federal Emergency Management Agency

NRP National Response Plan

NSC National Security Council

OFDA Office of Foreign Disaster Assistance

USAID United States Agency for International Development

USDA United States Department of Agriculture

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

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other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.
Page 1 GAO-06-460 Hurricane Katrina International Aid

United States Government Accountability Office

Washington, D.C. 20548

A

April 6, 2006 Letr

Congressional Committees

Hurricane Katrina struck in August 2005, devastating the Gulf coast of the 

United States, causing billions of dollars in damage, and dislocating 

thousands of residents. Government at all levels—local, state, and 

federal—struggled to respond to the magnitude of the event. As the storm’s 

devastation and destruction were viewed around the world, many foreign 

countries offered both cash and in-kind donations, including foreign 

military donations to the United States.1

 For the first time in its history, the 

U.S. government welcomed international offers of assistance to this 

degree.

The framework for managing domestic events is the National Response 

Plan (NRP).2

 The NRP establishes that the Department of State (DOS) is 

the coordinator of all offers of international assistance. In the aftermath of 

the hurricane, Federal Emergency Management Agency (FEMA) officials 

told us that they convened an interagency meeting to determine how the 

international assistance would be managed. Shortly after this meeting the 

DOS created a Hurricane Katrina Task Force. Through the task force, DOS 

provided information about the offers to the FEMA, within the Department 

of Homeland Security (DHS), and DOS communicated with the countries 

offering assistance regarding what items would be accepted by the U.S. 

government.3

 FEMA utilized the Stafford Act4 to accept some of the 

assistance. FEMA was responsible for coordinating the distribution of the 

international assistance and ensuring that it was distributed as intended. In 

carrying out these responsibilities, FEMA requested support from other 

federal agencies, using a process known as mission assignment. In the 

1

In-kind donations are non-cash 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.

2

The NRP assigns various agencies with lead roles and supporting roles during a disaster. 

The role that an agency would play depends on the nature of the disaster.

3

Not all offers of assistance were accepted by the U.S. government. For example, one 

country made an offer of cash that the United States did not accept, due to ongoing U.S. 

sanctions against that country.

4

Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121-5206 

(2000); see § 5201 (b).
Page 2 GAO-06-460 Hurricane Katrina International Aid

aftermath of Hurricane Katrina, FEMA requested that the Office of Foreign 

Disaster Assistance (OFDA), an organization within the U.S. Agency for 

International Development (USAID), manage all logistics/operations 

support to coordinate the international in-kind assistance for FEMA. DOD 

was involved in the receipt of foreign military donations.

The National Security Council (NSC) also had a role to play in the federal 

response to the hurricane. In the NRP section that discusses the principal 

organizational elements, issues that require policy adjudication or that fall 

outside the Secretary of Homeland Security’s areas of authority---as defined 

by the Homeland Security Act,5

 the Stafford Act, and other relevant statues, 

Executive Orders, and directives---are elevated for resolution through the 

Homeland Security Council and the NSC system. In the case of Hurricane 

Katrina, the NSC convened an interagency working group to decide how 

the donated funds would be used. 

FEMA had responsibility to safeguard the international assistance and to 

ensure that it was used as intended. In other words, FEMA was 

accountable to ensure that offers of assistance were acceptable for 

consumption and use and, if so, were properly received and distributed. 

Additionally in our opinion, when FEMA asks other agencies for assistance 

through its mission assignment process, FEMA is to maintain adequate 

oversight of the agencies’ management of the assistance, particularly since 

FEMA will reimburse the agencies for providing assistance. The countries 

that provided the United States with assistance did not stipulate specific 

uses for their donations. Nevertheless, the United States often stipulates 

conditions regarding how the assistance we provide to foreign countries 

should be used, and for Hurricane Katrina DOS recognized that it had a 

responsibility to maintain accountability and transparency with regard to 

the use of the cash donations.

In light of widespread congressional and public interest in U.S. agencies’ 

accountability in receiving and distributing assistance to hurricane victims, 

this report is one of several to review the events and aftermath surrounding 

Hurricane Katrina initiated under the statutory authority provided to the 

Comptroller General of the United States. Our objectives were to 

determine (1) the amount of cash that was donated by foreign countries, 

and the extent to which it had been used to assist in the relief efforts, and 

(2) the extent to which those federal agencies with responsibilities 

5

Homeland Security Act of 2002, Pub. L. No. 107-296 (2002).
Page 3 GAO-06-460 Hurricane Katrina International Aid

regarding the international assistance offered to the United States had 

policies and procedures in place to ensure the appropriate accountability 

for the acceptance and distribution of in-kind donations, including foreign 

military donations.

To achieve these objectives, we reviewed legislation and other guidance, 

including the NRP, and met with key officials from DOS, DHS, DOD, 

USAID, Department of Treasury (Treasury), U.S. Department of Agriculture 

(USDA), and Food and Drug Administration (FDA) within the Department 

of Health and Human Services. In addition, we collected and reviewed 

relevant data, including lists of items offered and received, and letters of 

acceptance from the agencies. We determined that the data used were 

sufficiently reliable for the purposes of this report. We conducted our 

review from October 2005 through February 2006 in accordance with U.S. 

generally accepted government auditing standards. For additional details 

on our scope and methodology, see appendix I.

Results in Brief The U.S. government had never before received such large amounts of 

international disaster assistance, and ad hoc procedures were developed to 

manage the acceptance and distribution of the assistance. It is 

understandable that not all procedures would be in place at the outset to 

ensure full accountability of the assistance. We were able to track the funds 

received and disbursed to those held in designated U.S. Treasury accounts. 

In the absence of policies, procedures, and plans, DOS developed an ad hoc 

process to manage the cash donations flowing to the U.S. government from 

other countries to assist in Hurricane Katrina relief efforts. Through this 

process, $126 million was donated to the U.S. government from 36 foreign 

countries and international organizations without restrictions, which DOS 

recorded in a designated account at the U.S. Treasury to hold the funds. 

FEMA had identified an account that earned interest in which to accept and 

hold the international cash donations. However, as cash donations arrived, 

an NSC-led interagency working group was convened to make policy 

decisions about the use of the funds. 6

 FEMA officials told us 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 

6

The working group included representatives from DOS, FEMA, DHS, NSC, and the Office of 

Management and Budget. Treasury officials also told us they participated in the group’s 

initial meeting. 
Page 4 GAO-06-460 Hurricane Katrina International Aid

the Stafford Act, would be more limited than the wider range of possible 

uses available if the funds were held until their ultimate use was 

determined and accepted under the gift authorities of other agencies. By 

September 21, about $115 million had been received. In October 2005, $66 

million of the donated funds were accepted by FEMA under the Stafford 

Act and spent on a case management grant to provide case workers to help 

100,000 households affected by Hurricane Katrina identify their needs and 

direct them to available assistance. As of March 16, 2006, $60 million 

remained undistributed in the DOS designated account at the Treasury that 

does not pay interest.7

 As explained below, Treasury can pay interest on 

funds accepted by FEMA under the Stafford Act. Because Treasury did not 

have statutory authority to pay interest on the funds held in the DOS 

account, the purchasing power of those funds held in that account have 

diminished due to inflation. Although it is understandable that procedures 

were not in place at the outset, given that an additional $400 million or 

more in potential international donations are outstanding and could 

materialize, it is important that cash management policies and plans be put 

in place to deal with the forthcoming donation so that the purchasing 

power of the donated cash is maintained.

FEMA, OFDA, and DOD lacked sufficient policies and procedures prior to 

this disaster to adequately ensure the acceptance and distribution of inkind donations, which includes such things as food, blankets, medical 

items, and foreign military donations such as ships and diving teams. This 

lack of guidance, as well as inadequate information up front about the 

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

advance coordination before items entered the United States 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. That said, these agencies 

created ad hoc policies and procedures to reasonably account for the 

assistance in most cases. For example, although FEMA requested that 

USAID/OFDA manage the receipt and distribution of the international 

assistance that arrived in the United States, the ad hoc procedures did not 

include confirmation of receipt of the donated goods at FEMA distribution 

sites. USAID/OFDA’s mission is to deliver assistance in foreign countries 

and thus it did not have guidance on how to deliver assistance in the United 

7

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. We did not 

review the details of this agreement.
Page 5 GAO-06-460 Hurricane Katrina International Aid

States. Nevertheless, we found that USAID/OFDA recorded the type and 

amount of assistance as it arrived, and it reasonably accounted for the 

assistance, particularly given the lack of information on the manifests and 

the large quantity of goods arriving within a short time. However, we noted 

the ad hoc procedures did not include internal controls that would have 

provided more agency oversight and assurance that the assistance was 

used as intended. Neither agency had a system to track the assistance and 

confirm its arrival at those sites. Thus, FEMA could not provide us 

evidence that it had determined or confirmed that the assistance arrived at 

these sites. According to Standards for Internal Control in the Federal 

Government, policies and procedures help provide this oversight and are 

necessary to manage agency activities. These policies and procedures were 

lacking because the agencies did not anticipate that the United States 

would be receiving this assistance. Further, FEMA’s initial list of items that 

could be used was not specific and DOS did not respond to FEMA’s 

requests for more specific information about the foreign offers. As a result, 

the U.S. government received food and medical assistance, MREs and 

medical supplies, that did not meet USDA or FDA standards and thus could 

not be distributed and had to be stored. In addition to the storage fees of 

about $80,000 consequently incurred, there are diplomatic ramifications for 

rejecting foreign countries’ donations after their arrival. For receiving 

foreign military donations for disaster relief, DOS established a process to 

coordinate with FEMA and DOD. FEMA and DOD apparently each 

assumed the other agency had accepted these donations under their 

respective gift authorities; however it is unclear whether either agency did 

so. As a result, even for the foreign military donations that were vetted 

through the DOS process, it is unclear whether either agency accepted 

these donations or maintained oversight of these donations and knew how 

they were eventually used. In addition, while some foreign military 

donations were coordinated through DOS, we learned that in other cases, 

some foreign military donations—we were unable to determine the 

amount—arrived directly at a military base without being coordinated 

through DOS. This occurred in part because DOD lacked internal policies 

and procedures for managing foreign military donations intended for use in 

the United States. For foreign military shipments that were not vetted 

through the task force, DOS, FEMA, and DOD officials could not provide us 

with information regarding the amount or type of foreign military 

donations received, and as a result, we were not able to confirm that they 

were used as intended. 

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

policies and procedures to manage international assistance in the event 
Page 6 GAO-06-460 Hurricane Katrina International Aid

that the United States receives international assistance in the future. As 

called for by The Federal Response To Hurricane Katrina: Lessons 

Learned,

8

 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 make 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. In commenting on a draft of this report, 

DOD and DHS generally agreed with our recommendations, while DOS and 

Treasury did not comment on the recommendations. We received technical 

comments from DOS, DOD, USAID/OFDA, FEMA, FDA, and USDA, which 

we incorporated as appropriate.

Background Historically, governments worldwide—including that of the United 

States—have provided areas stricken by major disasters with aid in the 

recovery process. Unlike many other countries, the U.S. government has 

previously neither asked for nor accepted disaster assistance directly from 

foreign countries, choosing instead to direct offers of assistance to 

nongovernmental organizations such as the Red Cross. However, on August 

29, 2005, Hurricane Katrina struck the coasts of Louisiana, Mississippi, and 

Alabama, causing billions of dollars in damage, and 3 days afterward the 

federal government, through the DOS announced worldwide assistance 

would be accepted. As of December 31, 2005, 76 countries and 

international organizations, such as UNICEF, donated $126 million in cash 

to the U.S. government; various types of in-kind donations, such as food, 

clothing, and blankets; and foreign military goods and services, such as the 

use of ships and diving teams. Seven countries donated both cash and inkind items.

There are several federal legislative and executive provisions that support 

preparation for and response to emergency situations. The Robert T. 

Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act)9

primarily establishes the programs and processes for the federal 

8

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

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

9

42 U.S.C. §§ 5121-5206.
Page 7 GAO-06-460 Hurricane Katrina International Aid

government to provide major disaster and emergency assistance to states, 

local governments, tribal nations, individuals, and qualified private 

nonprofit organizations. FEMA has responsibility for administering the 

provisions of the Stafford Act. 

When and if natural disasters or terrorist attacks occur within the United 

States, the National Response Plan (NRP), released in December 2004 by 

DHS, provides federal agencies with a framework to coordinate federal 

support to states and localities in need. The NRP works on a tiered request 

system, according to which requests for assistance flow from localities to 

states to the federal government when or if local and state resources are 

exhausted. However, under the NRP, the federal government—DHS—can 

in certain cases declare a catastrophic incident and provide assistance 

without waiting for requests for assistance. According to the NRP, as events 

occur and shortcomings are identified, FEMA is responsible for updating 

the plan. In the NRP section that discusses the principal organizational 

elements, issues that require policy adjudication or that fall outside the 

Secretary of Homeland Security’s areas of authority---as defined by the 

Homeland Security Act,10 the Stafford Act, and other relevant statues, 

Executive Orders, and directives---are elevated for resolution through the 

Homeland Security Council11 and the National Security Council system. In 

the case of Hurricane Katrina, the NSC led an interagency working group to 

decide how the donated funds would be used. 

The Stafford Act also provides the President or his delegate with the 

authority to accept and use gifts or donations in furtherance of the 

purposes of the Stafford Act.12 FEMA, as the President’s delegate, utilized 

this provision to accept international in-kind donations for the Hurricane 

Katrina recovery efforts. FEMA, through its mission assignments to other 

agencies, directed the use of the assistance to response efforts. Various 

other agencies have gift authorities, including DOS and DOD. However, an 

agency’s gift authority typically restricts the acceptance of gifts or 

donations to those activities that are within the accepting agency’s mission. 

10Homeland Security Act of 2002, Pub. L. No. 107-296 (2002).

11The 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.

1242 U.S.C. § 5201(b).
Page 8 GAO-06-460 Hurricane Katrina International Aid

For the purposes of Hurricane Katrina, FEMA—through the Stafford Act—

accepted donations for the response and recovery efforts. 

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.13

Further, the Secretary of State and Secretary of Homeland Security are to 

establish appropriate relationships and mechanisms for cooperation and 

coordination between their two departments. In the case of Hurricane 

Katrina, DOS, through a Hurricane Katrina Task Force, coordinated the 

acceptance of foreign monetary and nonmonetary assistance on behalf of 

the U.S. government and DHS (FEMA), respectively. The Task Force 

consisted of representatives from DOS and USAID/OFDA. 

The NRP designates 15 Emergency Support Functions that identify specific 

disaster responses and the organizations that have significant roles in 

responding to the disasters. Two key annexes apply to international 

disaster assistance. The International Coordination Support annex 

provides guidance on carrying out responsibilities for international 

coordination in support of the government’s response to an Incident of 

National Significance. Under this annex, DOS is charged with coordinating 

requests for foreign assistance based on needs conveyed by DHS or other 

federal agencies. DOS facilitates communication with foreign governments 

on behalf of the United States that can assist and/or support response, 

mitigation, and recovery efforts and acts as an intermediary for requests 

and foreign offers of assistance to the U.S. government. The NRP also 

includes a Financial Management Annex. This annex requires federal 

agencies to use proper federal financial principles, policies, and 

regulations, and management controls to ensure proper accountability of 

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

Standards for Internal Controls in the Federal Government.

14 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. 

13Homeland Security Presidential Directive 5, "Management of Domestic Incidents" 

(February 2003).

14GAO, Standards for Internal Controls in the Federal Government, GAO/AIMD 00-21.3.1 

(Washington, D.C.: November 1999).
Page 9 GAO-06-460 Hurricane Katrina International Aid

USDA and FDA were also involved in the Hurricane Katrina relief effort. 

USDA is responsible for regulating the importation of animals and animalderived materials to ensure that exotic animal and poultry diseases are not 

introduced into the United States, as well as to ensure that imported meat, 

poultry, or egg products are fit for human consumption.15 FDA regulates the 

importation of foods (except for certain meats and poultry products), 

drugs (human, animal, and biological), cosmetics, medical devices and 

radiation emitting devices, as defined in the Federal Food, Drug, and 

Cosmetic Act.16 For conventional operations, USDA and FDA are notified 

by U.S. Customs and Border Protection (CBP) prior to the import of food 

items or medical supplies in order to ensure that the items are acceptable 

for receipt in the United States.17

The ad hoc processes to accept, receive, and distribute international 

assistance varied depending on the type of assistance being offered. 

However, whether the assistance was in the form of cash, or in-kind 

donations, including foreign military donations, offers were supposed to be 

initially coordinated through the DOS Hurricane Katrina Task Force. 

However, we noted that not all foreign assistance was coordinated through 

DOS. For example, an unknown quantity of in-kind assistance came to the 

United States directly from foreign militaries. 

On September 15, 2005, the President ordered a comprehensive review of 

the federal government’s response to Hurricane Katrina. The 

administration released its report, The Federal Response To Hurricane 

Katrina: Lessons Learned, on February 23, 2006. The report contained 125 

recommendations, one of which requires DOS and DHS to lead an 

interagency effort to develop procedures for reviewing, accepting, or 

rejecting any offers of international assistance for a domestic catastrophic 

incident, including a mechanism to receive, disburse, and audit any cash 

assistance. 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. Our report complements the 

findings in the administration’s report.

157 U.S.C. §§ 8301-8317.

1621 U.S.C. § 381. 

17FEMA noted in its technical comments that manifest data for military planes does not go to 

CBP and USDA.
Page 10 GAO-06-460 Hurricane Katrina International Aid

Foreign Countries 

Donated Millions in 

Cash, But Policies, 

Procedures, and Plans 

Were Not in Place

In the absence of policies, procedures, and plans, DOS developed an ad hoc 

process to manage the cash donations flowing to the U.S. government from 

other countries to address Hurricane Katrina relief efforts.18 Through this 

process, $126 million was donated to the U.S. government which DOS 

recorded in a designated account at the U.S. Treasury to hold the funds. An 

NSC-led interagency working group was established to make policy 

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

identified and presented to the working group a number of items that the 

donated funds could be spent on. Once accepted by FEMA under the 

Stafford Act, donated funds would be limited to use on activities in 

furtherance of the Act. The working group wanted greater flexibility in the 

use of the donated funds, and thus held the funds pending the group’s 

determination as to which agency or agencies should ultimately accept and 

use the monies. By September 21, 2005 about $115 million had been 

received and in October 2005, $66 million of the donated funds were 

accepted by FEMA and spent on a case management grant. As of March 16, 

2006, $60 million remained undistributed in the DOS-designated account at 

the Treasury that does not pay interest.19 As discussed previously, 

undistributed funds accepted by FEMA under the Stafford Act and 

recorded at Treasury can receive interest.20 Because DOS expects 

additional cash donations to be received, it is important that cash 

management policies and spending plans are in place to deal with the 

forthcoming donations so that the purchasing power of the donated cash is 

maintained.

18Our scope did not include foreign assistance that was not provided to the federal 

government, such as foreign donations made directly to Hurricane Katrina victims, local 

governments, states, or institutions.

19On 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. We did not 

review the details of this agreement.

20Section 5201(b) of Title 42, U.S.C. states, in part, that “At the request of the President or his 

delegate, the Secretary of the Treasury may invest and reinvest excess monies in the fund. 

Such investments shall be in public debt securities with maturities suitable for the needs of 

the fund and shall bear interest rates determined by the Secretary of the Treasury, taking 

into consideration current market yields on outstanding marketable obligations of the 

United States of comparable maturities. The interest on such investments shall be credited 

to, and form a part of, the fund.”
Page 11 GAO-06-460 Hurricane Katrina International Aid

Ad Hoc Procedures Allowed 

Reasonable Accountability 

for Cash Donations

For offers of cash assistance, the DOS Hurricane Katrina Task Force 

developed ad hoc procedures to track and account for amounts offered and 

received as events evolved. Ad hoc procedures were necessary because 

specific policies and procedures for handling international cash donations 

to the federal government had not been developed. The DOS Hurricane 

Katrina Task Force evaluated each monetary offer by working with foreign 

donors to determine whether there were any specific restrictions or 

conditions associated with the offers. In making their donations, foreign 

donors did not generally place restrictions or conditions on amounts 

pledged. DOS also encouraged governments and private foreign donors to 

direct their cash contributions to the Red Cross and other organizations. 

Additionally, DOS coordinated with other federal agencies to determine 

whether any U.S. government sanctions imposed on a donating country 

prevented the acceptance of its offer.21 Once an offer was accepted on 

behalf of the U.S. government, DOS provided the donor with instructions 

on how to wire transfer the funds to a designated Department of the 

Treasury account maintained at the Federal Reserve Bank of New York 

specifically for DOS.22 In other cases, countries and private citizens wrote 

checks to the U.S. government that were deposited and routed to the same 

account following normal operating procedures. Figure 1 below shows the 

process developed to receive cash donations.

21For example, the U.S. government declined one foreign country’s offer of monetary 

assistance due to ongoing U.S. sanctions.

22Treasury assigns various types of account symbols (accounts) to agencies for the purposes 

of classifying receipt, appropriation, deposit, trust, and other funds. These accounts are 

assigned based on the nature and characteristics of the transactions they support.
Page 12 GAO-06-460 Hurricane Katrina International Aid

Figure 1: Overview of Process Developed to Receive International Cash Donations

As of December 31, 2005, DOS reported that $126 million had been donated 

by 36 countries and international organizations. Our review noted that 

although DOS’s procedures were ad hoc, they did ensure the proper 

recording of international cash donations that have been received to date, 

and we were able to reconcile the funds received with those held in the 

designated DOS account at Treasury. DOS expects that additional 

donations could come in from several countries including $400 million in 

pledged oil products from a foreign country. DOS officials told us that the 

foreign country’s governing body must approve the donation before this 

pledge can be executed and that the country intends to monetize—convert 

to cash—the oil products if and when its governing body approves the 

donation. 

Department of State

Offer forwarded to

Hurricane Katrina Task Force Hurricane Katrina Task Force 

accepts or declines offer

Notification is made to 

foreign country and 

process ends

If accepted Offer declined

Department of State

receives offer

Department of State 

provides wire transfer 

instructions

Source: GAO.

Foreign country transfers

funds to U.S. Government

Federal Reserve Bank of 

New York reports deposit 

to Department of Treasury

and Department of State

Foreign country offers

cash donation to the 

Department of State
Page 13 GAO-06-460 Hurricane Katrina International Aid

Cash Donation Management 

Policies, Procedures, and 

Plans Not in Place 

In the absence of international cash donation management policies, 

procedures, and plans, an NSC-led interagency working group was 

established to determine uses for the international cash donations. In 

October 2005, $66 million of the donated funds 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.23 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 a DOS 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 these DOS-held funds with interest. If there are dual 

goals of flexibility and maintaining purchasing power, there are a number 

of options that could be considered. 

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.

23On 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. We did not 

review the details of this agreement.
Page 14 GAO-06-460 Hurricane Katrina International Aid

Table 1: International Cash Donations Received and Used – Key Dates

Source: GAO analysis.

In early September 2005, FEMA officials had identified an account at the 

U.S. Treasury for recording international cash donations and had 

developed 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 its input 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. In responding to our draft report, a DHS official said that at 

the next meeting of the interagency working group on October 7, 2005, 

FEMA, at NSC’s request, presented a more detailed description of certain 

potential activities, including a proposal to finance case management 

services for households affected by Hurricane Katrina. On October 20, 

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

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

Date Event

August 29, 2005 Hurricane Katrina hit Gulf Coast Region

September 2, 2005 DOS Hurricane Katrina Task Force Established

September 3, 2005 DOS provides 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 have been 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
Page 15 GAO-06-460 Hurricane Katrina International Aid

purpose of financing case management services for up to 100,000 such 

households. These services will provide case workers to help individual 

households define what their needs are and to obtain available assistance. 

On October 28, 2005, FEMA awarded a $66 million 2-year case management 

grant to the United Methodist Committee on Relief. With these funds, the 

United Methodist Committee on Relief will lead and manage a national 

consortium consisting of 10 primary organizations that will provide case 

management services to victims of Hurricane Katrina.24

As of February 2006, the remaining $60 million had not been released, 

pending the NSC-led interagency working group determination as to which 

agency or agencies should ultimately accept and use the remaining funds. 

The NSC-led interagency working group set various parameters for using 

the funds, including that the funds should be used for “bricks and mortar” 

projects, such as buildings that provide tangible evidence of how 

contributions were used. We were told that the NSC-led interagency 

working group determined that use of those 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 until their ultimate use was 

determined and then accepted under the gift authorities of other agencies.

DOS and FEMA officials told us that for the remaining $60 million in 

donated funds, the NSC-led interagency working group was considering a 

series of proposals received from various entities, both public and private. 

At the time of our review, a member of the NSC-led interagency working 

group told us they had agreed that the vital needs of schools in the area 

would be an appropriate place to apply the donations and 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 school buildings are not consistent with 

Stafford Act purposes unless replacing a damaged one. Also, according to a 

DHS official, 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 

24FEMA plans to oversee case management grant activities and expenses to ensure the 

grant’s objective is met. Additionally, the DHS Office of Inspector General (IG) has initiated 

an audit of the case management grant to provide independent oversight throughout the 

grant’s existence.
Page 16 GAO-06-460 Hurricane Katrina International Aid

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. We did not 

review the details of this agreement.

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

million or more that DOS officials indicated will likely 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. 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. 

While the NSC-led interagency working group was reviewing various 

proposals on the further use of the funds beyond the initial $66 million, the 

remaining $60 million was being held in a DOS account at the U.S. Treasury 

that does not pay interest. Treasury lacks the statutory authority to credit 

these DOS-held funds with interest. Since these funds have not yet been 

used, their purchasing power has diminished due to inflation. If these funds 

had been placed in an account that could be credited with interest to offset 

the erosion of purchasing power, the amount of funds available for relief 

and recovery efforts would have increased while 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 earn 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 
Page 17 GAO-06-460 Hurricane Katrina International Aid

donated funds may be placed in Treasury securities, and the related 

interest paid on such investments would be credited to the account. This 

Stafford Act provision applies only to donated funds that have been 

accepted by FEMA. 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.25

Although Treasury lacks the authority to invest the foreign monetary 

donations received by DOS, the FEMA account does permit the 

government to protect the purchasing power of foreign monetary 

donations.

As noted previously, outstanding pledges totaling over $400 million could 

be received in the near future. Advanced planning and procedures for the 

decision-making process in the disbursement of funds is important so that 

this money can be utilized for disaster relief in a timely manner or be 

placed in an account to earn interest for the benefit of relief and 

reconstruction efforts while decisions are being made on how to spend the 

funds. When developing policies, procedures, and plans to provide the 

flexibility given by leaving the international donations in the DOS account, 

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 their purchasing power and flexibility, then among the 

options to consider are seeking statutory authority for DOS to record the 

funds in a Treasury account that can pay interest similar to donations 

accepted under the Stafford Act, 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.26

25Interest computed based on an estimated average annual yield of 5 percent for Treasury 

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

26DHS noted in technical comments on a draft of this report that it would not subsequently 

transfer donated funds to another agency for purposes other than carrying out the Stafford 

Act.
Page 18 GAO-06-460 Hurricane Katrina International Aid

Policies and 

Procedures Were 

Lacking in the 

Acceptance and 

Distribution of in-Kind 

Donations, Including 

Foreign Military 

Donations

The agencies having responsibilities regarding international assistance did 

not have policies and procedures in place to ensure the acceptance and 

distribution of in-kind donations, including foreign military donations, 

received from 43 countries and international organizations. With little 

guidance, DOS, FEMA, OFDA, and DOD created ad hoc policies and 

procedures in an effort to provide the assistance to victims as quickly as 

possible. However, we did note areas in which the ad hoc procedures were 

missing internal controls to ensure sufficient agency oversight of the 

assistance and to ensure that the assistance was used as intended. For 

example, the lack of guidance, inadequate information up front about the 

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

advance coordination before acceptance 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. Also, the ad hoc procedures allowed for 

confusion about which agency—FEMA or DOD—accepted and was 

responsible for oversight of foreign military donations.

Process Developed for 

Accepting, Receiving, and 

Distributing In-Kind 

Donations

For offers of in-kind assistance, FEMA worked in close coordination with 

the DOS Task Force to determine whether it should accept the offers.27

Specifically, FEMA provided the Task Force with a list of supplies the 

agency could use to assist in recovery efforts. The Task Force compared 

the offers of assistance against a list of needed supplies provided by 

FEMA.28 As matches were identified by the Task Force, DOS relayed a 

message to the donor that the offer would be accepted on behalf of the 

United States for use in Hurricane Katrina relief efforts.

Once a message of acceptance was relayed to the foreign country or 

international organization donating the in-kind assistance, the Office of 

Foreign Disaster Assistance was tasked by FEMA with the responsibility of 

providing logistical support for physical receipt of the donation. 

USAID/OFDA coordinated with DOD–Northern Command to establish a 

location that could be used to receive international donations. The location 

had to be both accessible to numerous flights delivering supplies and in 

27The DOS Task Force included representatives from DOS and USAID/OFDA.

28FEMA tasked USAID/OFDA to work with DOS to determine whether specific offers were 

accepted and needed.
Page 19 GAO-06-460 Hurricane Katrina International Aid

close proximity to the areas devastated by Hurricane Katrina, and 

USAID/OFDA and DOD–Northern Command determined that the Little 

Rock Air Force Base best qualified for these criteria. Accordingly, 

USAID/OFDA coordinated with foreign donors for in-kind donations to 

arrive in Little Rock, Arkansas, where agency personnel would unload 

donations and, upon request from FEMA, forward the donations to a 

distribution point. 

Figure 2 below shows the process developed for accepting, receiving, and 

distributing in-kind donations.
Page 20 GAO-06-460 Hurricane Katrina International Aid

Figure 2: Overview of Process Developed for Accepting, Receiving, and Distributing 

In-Kind Donations

If accepted Offer declined

Source: GAO.

Task Force compares offers of 

assistance with lists of needed 

supplies created by FEMA

Hurricane Katrina Task Force 

determines if offer will be 

accepted or declined

Foreign country or international 

organization offers assistance 

to the Department of State

Department of State 

receives offer

Offers forwarded to 

Hurricane Katrina Task Force

Offer forwarded to Office 

of Foreign Disaster 

Assistance (OFDA)

Department of State

OFDA coordinates with 

foreign country to 

receive the donation

Foreign country sends

donation to Little Rock AFB

FEMA requests donations

from OFDA on an

 “as needed” basis; OFDA 

forwards donations

to distribution points

Department of State

Notification is made to 

foreign country or 

international organization 

and process ends
Page 21 GAO-06-460 Hurricane Katrina International Aid

Lack of Guidance Regarding 

the Tracking and 

Confirmation of Receipt for 

International Assistance 

In the absence of guidance, USAID/OFDA created a database to track the 

assistance as it arrived. We found, under the circumstances, that 

USAID/OFDA reasonably accounted for the assistance, especially given the 

lack of manifest information and the amount of assistance that was arriving 

within a short time. Compounding difficulties in USAID/OFDA’s ability to 

record the assistance as it arrived were planes that arrived from the North 

Atlantic Treaty Organization for which the organization would not provide 

reliable manifest information.

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. On September 14, 2005, FEMA and USAID/OFDA 

agreed that USAID/OFDA would track the assistance from receipt through 

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 USAID/OFDA had never distributed 

assistance within the United States as its mission is to deliver assistance in 

foreign countries. 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. Had 

USAID/OFDA created a system to track the items transported through 

receipt at distribution sites and had FEMA overseen the USAID/OFDA 

process, FEMA would be able to determine the extent to which all or part 

of the foreign assistance was received at the FEMA distribution sites. 

Lack of Guidance Resulted 

in the Arrival of Food and 

Medical Items that Could 

Not be Used

The lack of guidance, inadequate information up front about foreign offers 

of in-kind assistance and insufficient advance coordination before agreeing 

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

supplies, that came into the United States and did not meet USDA or FDA 

standards and thus 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 CBP, are transmitted to USDA and FDA for those agencies’ use in 
Page 22 GAO-06-460 Hurricane Katrina International Aid

determining if the commodities are appropriately admissible into the 

United States. Based on U.S. laws and regulations, the agencies then 

determine whether the items to be imported meet U.S. standards. CBP 

authorized suspension of some normal operating procedures for the import 

of regulated items like food and medical supplies without consultation or 

prior notification to USDA or FDA.29 Thus, USDA and FDA had no 

involvement in the decision–making process for regulated product 

donations, including MREs and medical supplies before the United States 

agreed to receive them. 

FEMA notified USDA and FDA on approximately September 4, 2005, that 

food and medical supplies were received by the U.S. government and 

approved by CBP for entry into the United States. However, FEMA officials 

told us that they did not accept MREs from one country even though these 

MREs were shipped and stored in the warehouse along with the MREs from 

the other countries. On approximately September 4, the items were either 

in route or had already arrived at the staging area in Little Rock, Arkansas. 

The USDA and FDA then sent personnel to Little Rock to inspect the 

donations. Simultaneously, USAID/OFDA personnel, unaware that some of 

these donations would not be eligible for distribution and trying to expedite 

provision of relief supplies, forwarded approximately 220,000 MREs to 

distribution points. When USAID/OFDA officials became aware that the 

MREs they distributed were not approved by the USDA, they recalled the 

items back to Little Rock, Arkansas, pending USDA inspection. 

According to USDA inspectors, they determined that a number of the MREs 

donated to the United States contained meat and poultry products from 

countries that, based on U.S. regulations,were excluded from exporting 

meat to the United States. According to USDA, the MREs from one country 

were banned because of concerns regarding Bovine Spongiform 

Encephalopathy (BSE) meat contamination,30 or because the MREs 

originated in countries lacking food inspection systems equivalent to those 

in the United States. In addition, FDA found that many of the medical 

29In order to respond to the specific threat to human life and national interests posed by the 

major disaster existing in Louisiana, Mississippi, and Alabama, the Commissioner of U.S. 

Customs and Border Protection authorized Port Directors and Directors of Field Operations 

to close temporarily any Customs office or port of entry or take any other lesser action that 

may be necessary to respond to the Katrina Disaster. This action was taken pursuant to 19 

U.S.C. § 1318(b)(2) and 19 U.S.C. § 1322(b).

309 C.F.R. 94.18.
Page 23 GAO-06-460 Hurricane Katrina International Aid

supplies received in Little Rock were not approved for use in the United 

States because they were either labeled with instructions in a language 

other than English or stored under conditions that were deemed 

unsanitary. Both USDA and FDA, based on regulations intended to protect 

public health, prevented distribution of some international donations. 

Per FEMA guidance, USAID/OFDA received 359,600 rations of MREs that 

could not be distributed within the United States. USAID/OFDA, on behalf 

of FEMA, has been storing the MREs and medical supplies at a private 

warehouse in Little Rock, Arkansas, until DOS and FEMA determine what 

to do with them. As of February 1, 2006, FEMA and DOS31 had paid the 

warehouse $62,000, with an additional $17,600 contract pending for the 

month of February. In addition to the storage cost, there is an 

unquantifiable cost in the diplomatic impact of rejecting foreign donations 

after they have been received. DOS has arranged for some of the MREs to 

be shipped to foreign countries in need and DOS officials told us that the 

receiving countries will be paying the shipping costs. As of February 3, 

2006, approximately 40 percent of the 359,600 rations of MREs have been 

forwarded to two other countries. The DOS plans to forward an additional 

21 percent to other countries by February 28, 2006.32 While the disposition 

of the remaining 40 percent of the MREs and the medical supplies still 

stored in the private warehouse is uncertain, DOS will continue to pay 

storage fees. The following picture displays the numerous pallets of MREs 

stored in Little Rock, Arkansas as of November 9, 2005. 

31As of December 13, 2005, the Department of State provided funding for payment of the 

private warehouse in Little Rock, Arkansas from FEMA. The Department of State, through 

USAID, has amended the contract to extend to February 28, 2006. 

32DOS officials commented that all MREs will be removed from the warehouse by March 31, 

2006.
Page 24 GAO-06-460 Hurricane Katrina International Aid

Figure 3: Foreign Donated MREs in Storage as of November 9, 2005

The costs for FEMA’s receipt and later storage of the MREs and medical 

supplies that were not distributed for the disaster were attributable in part 

to the lack of policies and procedures needed to guide it through the 

process of coordinating and accepting international in-kind assistance. 

First, our review 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 

Source: GAO.
Page 25 GAO-06-460 Hurricane Katrina International Aid

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

commented on our report that FEMA repeatedly requested from DOS 

additional information about the foreign items being offered to determine 

whether or not they should be accepted and DOS did not respond. Had 

FEMA supplied DOS officials with more detailed information early on 

about what could be accepted and what could not be ultimately distributed, 

and had DOS requested and received additional details from potential 

donors on the nature and contents of the assistance such as MREs, they 

might have prevented the unusable products from coming into the United 

States. FEMA officials told us that in the event of another disaster of this 

size, they would coordinate with USDA, FDA, and other agencies as 

required to avoid similar problems.

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 allowed for 

confusion about which agency had oversight of these donations. Also, there 

were no controls or procedures to assure that all foreign military donations 

were vetted through the DOS process. The offers of foreign military 

assistance included, for example, the use of amphibious ships and diver 

salvage teams. 

For foreign military donations, the DOS Hurricane Katrina Task Force 

coordinated with FEMA and DOD, through Northern Command, to 

determine whether the offer of assistance could be utilized. Northern 

Command reviewed the offers of assistance and compared them against 

the mission assignments it received from FEMA that included such tasks as 

clearing ports and waterways of debris. If Northern Command believed the 

foreign militaries’ offers of assistance could be utilized to accomplish a 

mission assignment, the command coordinated the receipt of the 

assistance with the foreign donor. Figure 4 below shows the process 

developed for acceptance and receipt of foreign military assistance. 
Page 26 GAO-06-460 Hurricane Katrina International Aid

Figure 4: Overview of Process Developed for the Acceptance and Receipt of Foreign 

Military Assistance

The ad hoc procedures, however, allowed confusion about which agency—

DOD or FEMA—was to formally accept the foreign military assistance and 

therefore, each agency apparently assumed the other had done so under 

their respective gift authorities. It is unclear whether FEMA or DOD 

accepted or maintained oversight of the foreign military donations that 

were vetted through the DOS task force. A FEMA official told us that they 

were unable to explain how the foreign military donations were used 

because FEMA could not match the use of the donations with mission 

assignments it gave Northern Command. Establishing accountability is an 

important internal control activity to help ensure that there is an 

organization to account for the goods and services and that they are used 

as intended. While we have found no evidence to suggest that any of the 

foreign military goods or services were not used as intended, establishing 

and maintaining oversight provides more assurance that these donations 

were used as intended.

Moreover, FEMA and Northern Command officials told us of instances in 

which foreign military donations arrived in the United States that were not 

vetted through the DOS task force. For example, we were told of foreign 

military MREs that were shipped to a military base and distributed directly 

to hurricane victims. Having policies and procedures in place would have 

Department of State

Offer forwarded to

Hurricane Katrina Task Force

The Task Force, in 

coordination with Northern 

Command and FEMA, 

reviews offer and determines

if the offer can be utilized

Notification is made to 

foreign country and 

process ends

If accepted Offer declined

Foreign country offers

military assistance to 

the Department of State

Department of State

receives offer

Source: GAO.

Northern Command 

coordinates with foreign 

country to receive the 

military assistance
Page 27 GAO-06-460 Hurricane Katrina International Aid

instructed federal officials to coordinate all foreign military offers of 

assistance through the DOS task force which would work with FEMA and 

DOD to determine the best use for the items. DOD officials acknowledged 

the need for policies and procedures and are trying to establish policies and 

procedures to manage international assistance. When we asked about 

shipments that were not vetted through the task force, neither DOS, FEMA, 

nor DOD officials could provide us information on the type, amount, or use 

of these donations. As a result, we can not determine if these items of 

assistance were safeguarded and used as intended.

Conclusions We recognize that since the United States government had never before 

received such substantial amounts of international disaster assistance, 

DOS, FEMA, OFDA, and DOD needed to create ad hoc procedures to 

manage the 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 how international cash donations are to be 

managed and used, which would enhance the accountability and 

transparency of these funds. In addition, there is a need to consider 

whether international donations should be treated on the same basis as 

Stafford Act donations for the purpose of Treasury crediting interest to 

such donations. Since this was the first time international donations were 

accepted, this situation was not contemplated. 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 the funds in a Treasury 

account that can pay interest, 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. In addition, focusing immediate 

attention on the potentially forthcoming donations of $400 million, as well 

as the $60 million in presently available funds, would be prudent. 

With respect to the donations of food and medical supplies, we agree that 

normal procedures should be waived to expedite recovery efforts when 

necessary; however, food and medical supplies are essential in any disaster 

and the health and safety of the public should be considered when 

accepting food and medical assistance from the international community. 

Moreover, the failure to track in-kind donations after they were loaded onto 

trucks resulted in a lack of assurance that all of the international assistance 

FEMA accepted was safeguarded, and used as intended. The need to have 

proper knowledge, acceptance, and oversight of foreign military donations 

is equally important.
Page 28 GAO-06-460 Hurricane Katrina International Aid

Recommendations for 

Executive Action

As mentioned previously, in February 2006, the administration issued its 

report on the federal response to Hurricane Katrina and the lessons learned 

in that response. In the report, the administration made 125 

recommendations, including several to improve the management of 

international donations. Specifically, DOS and DHS are required to lead an 

interagency effort to improve the management of international donations, 

which includes developing procedures for reviewing, accepting, or 

rejecting any offers as well as developing a mechanism to receive, disburse, 

and audit any cash donations. To help ensure that the cognizant agencies 

fulfill their responsibility to account for and effectively manage foreign 

donations and maintain adequate internal controls over government 

resources, we recommend that the Secretary, Department of Homeland 

Security, in consultation with the Secretary, Department of State, establish 

within the National Response Plan—or other appropriate plans—clearly 

delineated policies and procedures for the acceptance, receipt, and 

distribution of international assistance. As the agencies develop and 

implement the administration’s recommendations, we believe they should 

also incorporate the following actions and procedures into their guidance.

• Develop policies, procedures, and plans to help ensure international 

cash donations for disaster relief and assistance are accepted and used 

appropriately as needed.

• Consider cash management options as discussed in the conclusions 

section above and place international cash donations in an account that 

would pay interest while decisions are pending on their use to maintain 

the purchasing power of those donations.

• Maintain oversight of foreign donated in-kind assets by tracking them 

from receipt to disbursement, to reasonably ensure that assistance is 

delivered where it is intended.

• Establish plans for the acceptance of foreign-donated items that include 

coordinating with regulatory agencies, such as USDA and FDA, in 

advance, in order to prevent the acceptance of items that are prohibited 

from distribution in the United States, regardless of waivers that might 

be established to expedite the importing of foreign assistance; these 

plans should also include DOS obtaining information on acceptable or 

unacceptable items in order to communicate to the international 

community what is needed or what can not be accepted.
Page 29 GAO-06-460 Hurricane Katrina International Aid

We also recommend that the Secretary of Defense, in consultation with the 

Secretaries of State and Homeland Security, take the following two actions:

• Establish within the National Response Plan or other appropriate 

plans—clearly delineated policies and procedures to ensure that foreign 

military offers of assistance for domestic disasters are coordinated 

through the DOS to ensure they are properly accepted and safeguarded 

and used as intended.

• Develop and issue internal DOD guidance to commanders on the 

agreed-upon process to coordinate assistance through DOS.

Agency Comments and 

Our Evaluation

We asked the Secretaries of Defense, Homeland Security, State, and 

Treasury to comment on our draft. We also asked USDA, FDA, and 

USAID/OFDA to provide comments. DOD and DHS generally agreed with 

our recommendations and provided written comments on a draft of this 

report, included at appendixes II and III, respectively. We received 

technical comments from DOS, DOD, USAID/OFDA, FEMA, FDA, and 

USDA which we incorporated as appropriate.

DOD agreed with the recommendations pertaining to it and suggested that 

we adjust the wording of the recommendation that procedures be 

developed to assure that foreign military donations be routed through DOS. 

We adjusted the recommendation based on DOD’s suggestion. In its 

technical comments, DOD also suggested specific information on the 

process to coordinate international offers of assistance through DOS, 

including ensuring that the offers match U.S. requirements, meet U.S. 

standards, and are received at the right locations. These specifics may be 

considered as the agencies develop policies, procedures, and plans for the 

management of future international assistance.

DHS generally agreed with our recommendations and noted that, in some 

cases, actions were already underway to address the recommendations. 

Regarding our recommendation to develop policies, procedures, and plans 

for international cash donations for disaster relief to assure they are 

accepted and used appropriately as needed, DHS noted that, in 

coordination with Treasury and the Office of Management and Budget, it is 

already developing a system to manage such donations. DHS also agreed 

with our recommendation regarding cash management options that would 

maintain the purchasing power of the cash donations while decisions are 

pending on their use. DHS added that this recommendation was consistent 
Page 30 GAO-06-460 Hurricane Katrina International Aid

with what FEMA did during Hurricane Katrina, pointing out that on 

September 6, 2005, FEMA established an interest bearing account to hold 

international funds and began identifying programs and needs that would 

not be eligible for FEMA assistance but could benefit from monetary 

donations. DHS also agreed that FEMA should maintain oversight of 

foreign donated in-kind assets to the distribution points. DHS noted that 

FEMA and USAID/OFDA agreed that it was USAID/OFDA’s responsibility to 

track incoming international donations. We acknowledge this agreement, 

but note in our report, however, that the in-kind donations were not 

tracked to the final distribution points with confirmation that they arrived 

and note that USAID/OFDA and FEMA could not provide evidence that this 

had been accomplished. We clarified the report in this regard. DHS agreed 

with our recommendation regarding the need to coordinate with regulatory 

agencies such as USDA and FDA in advance to prevent the receipt of items 

that could not be distributed in the United States. DHS noted that FEMA 

coordinated with these agencies during Hurricane Katrina, and made 

constant requests to DOS to obtain more information from the donors 

about the donations to determine whether or not they could be properly 

accepted. We agree that more specificity is needed about the nature and 

content of items the United States can accept and foreign nations are 

offering through DOS channels, such as MREs, and reflected DHS’s 

comment in the final report. Without such information, it may not be 

possible to undertake appropriate coordination with regulatory agencies 

such as USDA and FDA and make a sound determination as to whether the 

items should be accepted and could be used in the United States before 

they arrive. DHS also agreed that all foreign military offers of assistance for 

domestic disasters should be coordinated through DOS for official 

acceptance or denial. However, we continue to believe that clear 

procedures are needed regarding which agency—FEMA or DOD—accepts 

and maintains oversight of such donations in advance. We adjusted our 

draft report to reflect the apparent confusion over the acceptance of 

foreign military donations.

We also received technical comments from DOS, DOD, USAID/OFDA, 

FEMA, FDA, and USDA, which we incorporated as appropriate. 

We are sending copies of this report to the Secretaries of Homeland 

Security, Defense, and State and interested congressional committees. We 

will also make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http:/www.gao.gov.
Page 31 GAO-06-460 Hurricane Katrina International Aid

Please contact Davi M. D’Agostino at (202) 512-5431 or 

dagostinod@gao.gov or McCoy Williams at (202) 512-9095 or 

williamsm1@gao.gov if your staff have any questions concerning this 

report. Contact points for our Offices of Congressional Relations and 

Public Affairs may be found on the last page of this report. GAO staff who 

made major contributions to this report are listed in appendix IV.

Davi M. D’Agostino, 

Director

Defense Capabilities and Management

McCoy Williams, 

Director

Financial Management and Assurance
Page 32 GAO-06-460 Hurricane Katrina International Aid

List of Congressional Committees

The Honorable Joseph I. Lieberman

Ranking Minority Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Tom Davis

Chairman

The Honorable Henry A. Waxman

Ranking Minority Member

Committee on Government Reform

House of Representatives
Page 33 GAO-06-460 Hurricane Katrina International Aid

Appendix I

Scope and Methodology AAppenednxidexiIs

To meet our objectives for this report we relied on information gathered 

through our visits and interviews with key personnel within the 

Department of State’s (DOS) Hurricane Katrina Task Force; Office of the 

General Counsel for the DOS; Department of Homeland Security (DHS) 

Inspector General; Office of the General Counsel for Federal Emergency 

Management Agency (FEMA); FEMA Response Division; FEMA Recovery 

Division; Office of the Chief Financial Officer for FEMA; FEMA/Financial 

and Acquisitions Management Division; FEMA/Grants Management 

Division; United States Agency for International Development 

(USAID)/Office of Foreign Disaster Assistance (OFDA); OFDA/Response 

Alternatives for Technical Services; Office of the Assistant Deputy Under 

Secretary of Defense; Office of the Assistant Secretary of Defense; 

Northern Command (NORTHCOM)/ Joint Staff Logistics; NORTHCOM/ 

Joint Staff Civil Affairs; NORTHCOM/Political Advisor; Department of 

Treasury (Treasury)/Cash Accounting; Treasury/Chief Systems Integrity 

Division; Food and Drug Administration (FDA); and United States 

Department of Agriculture (USDA)/Food Safety and Inspection Service. We 

conducted our work in Washington, D.C.; Little Rock, Arkansas; Colorado 

Springs, Colorado, and New York, New York, from October 2005 through 

February 2006, in accordance with generally accepted government auditing 

standards. DOS and FEMA officials told us the National Security Council 

(NSC) had established an interagency working group that had a role in 

determining how the international cash donations were to be used. We 

contacted NSC to discuss its role in managing the international cash 

donations; however, NSC did not respond to our request for a meeting. 

To determine the amount of cash that was donated by foreign countries and 

the extent to which it has been used to assist hurricane victims, we 

gathered information from interviews with DOS, FEMA, and Treasury. To 

assess the reliability of foreign cash donations received by the U.S. 

government from the date Hurricane Katrina hit the United States until 

December 31, 2005, we talked with DOS, FEMA, and Treasury officials to 

gain an understanding of the procedures followed in recording the funds. 

We also validated $123,611,143, which is 97.8 percent of the Hurricane 

Katrina collections reflected in the Department of Treasury records by 

comparing to supporting documentation such as Treasury wire transfers 

and DOS check receipt documents. We also traced the transfer of $66 

million in funds from DOS to FEMA. We determined the data were 

sufficiently reliable for the purpose of this report. To obtain an 

understanding of the oversight controls over FEMA’s-2 year case 

management grant, we interviewed officials from FEMA/Grants 

Management Division, the United Methodist Committee on Relief, and DHS 
Appendix I

Scope and Methodology

Page 34 GAO-06-460 Hurricane Katrina International Aid

Office of Inspector General, as well as reviewed pertinent documents such 

as the grant proposal and agreement. We also contacted the NSC to discuss 

why an interagency working group and not FEMA was used to manage the 

donated cash and the process by which they established the parameters 

governing how the cash was to be used. NSC did not respond to our 

requests for a meeting.

To determine the extent to which those federal agencies with 

responsibilities regarding the international assistance offered to the United 

States had policies and procedures in place to ensure the appropriate 

accountability for the acceptance and distribution of in-kind donations, 

including foreign military donations, we relied on information gathered 

during interviews with officials from DOS, DHS, DOD, USDA, and FDA. We 

reviewed the National Response Plan International Coordination Support 

Annex and Financial Management Annex; Robert T. Stafford Act; 

Homeland Security Presidential Directive 5; Federal Food, Drug, and 

Cosmetic Act; and 9 CFR 94.18 to determine the responsibilities of federal 

agencies. We also obtained, reviewed, and analyzed the Memorandum of 

Agreement between the Department of State and The Department of 

Homeland Security; a FEMA-created international assistance flow chart 

and processes document; a NORTHCOM-created international donations 

flowc hart; USAID Commodity Dispatch Procedures; and FDA Import 

Procedures to assist in understanding the roles of federal agencies. We 

reviewed and analyzed summaries of international assistance received; 

instructional and acceptance cables from the Department of State; 

instructions provided to FEMA accountants for recording in-kind 

donations; and USAID Commodity Dispatch Procedures for FEMA to call 

forward international donations from the arrival site in Little Rock, 

Arkansas. To assess the reliability of data provided, we talked with 

knowledgeable agency officials about the data provided and reviewed 

relevant documentation. We visited Smart Choice Delivery warehouse in 

Little Rock, Arkansas to discuss and observe the international MealsReady-to-Eat that were stored in the facility. We obtained and reviewed the 

contract between the Office of Foreign Disaster Assistance and Smart 

Choice Delivery. In addition, we interviewed representatives from the 

American Red Cross and the United Nations International Children’s Fund 

in order to understand the process and procedures of leading nongovernmental agencies that are experienced in accepting non-monetary 

donations. 
Page 35 GAO-06-460 Hurricane Katrina International Aid

Appendix II

Comments from the Department of Defense ApendxiI
Appendix II

Comments from the Department of Defense

Page 36 GAO-06-460 Hurricane Katrina International Aid
Page 37 GAO-06-460 Hurricane Katrina International Aid

Appendix III

Comments from the Department of Homeland 

Security ApendxiI
Appendix III

Comments from the Department of Homeland 

Security

Page 38 GAO-06-460 Hurricane Katrina International Aid
Appendix III

Comments from the Department of Homeland 

Security

Page 39 GAO-06-460 Hurricane Katrina International Aid
Page 40 GAO-06-460 Hurricane Katrina International Aid

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contacts Davi M. D’Agostino (202) 512-5431

McCoy Williams (202) 512-9095

Acknowledgments In addition to those named above, Kay Daly, Kate Lenane, Charles Perdue, 

Jay Spaan, Lorelei St James, Pamela Valentine, Cheryl Weissman, and 

Leonard Zapata made key contributions to this report.
Page 41 GAO-06-460 Hurricane Katrina International Aid

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