United States Government Accountability Office

GAO Report to Congressional Committees

BUDGET ISSUES

FEMA Needs 

Adequate Data, Plans, 

and Systems to 

Effectively Manage 

Resources for 

Day-to-Day Operations

January 2007 

 

GAO-07-139 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

January 2007

BUDGET ISSUES

FEMA Needs Adequate Data, Plans, and 

Systems to Effectively Manage 

Resources for Day-to-Day Operations 

Highlights of GAO-07-139, a report to 

congressional committees 

Much of FEMA’s funding is 

provided in supplemental 

appropriations when a disaster is

declared, but funds to staff,

manage, and operate other FEMA 

programs and underlying support 

functions—what GAO refers to as

its day-to-day operations—compete 

with other Department of

Homeland Security (DHS) and

federal priorities for limited 

resources. In this environment, 

FEMA must strategically plan for

and manage its day-to-day

operations to ensure they 

efficiently and effectively support 

the agency’s disaster relief mission. 

To analyze this issue, GAO 

examined resource trends and

management related to FEMA’s 

day-to-day operations from fiscal 

year 2001 through fiscal year 2005. 

What GAO Recommends

GAO recommends that FEMA take 

steps to better manage resources

for its day-to-day operations, 

including collecting data that

enables managers to monitor 

progress and support resource 

priorities, using leading practices 

to develop a strategic workforce 

plan, and developing business 

continuity plans. In carrying out 

these recommendations, FEMA 

should work with Congress to

ensure that the information it 

provides is sufficient for use in

oversight activities. 

DHS and OMB staff provided 

technical comments on a draft of

this report, which we incorporated 

where appropriate. 

The Federal Emergency Management Agency (FEMA) experienced nearconstant organizational change from fiscal years 2001 through 2005 that 

caused considerable flux in FEMA’s resources. During this period, the most 

significant change occurred in March 2003 when FEMA transitioned from an 

independent agency to a component of the newly created DHS. From the 

beginning of fiscal year 2003 through fiscal year 2005, a significant number of

programs and their associated funding moved into and out of FEMA. 

Although the amounts nearly balanced, the movement was disruptive to 

operations and created uncertainty about the availability of resources. 

Programs and Associated Funding That Moved into and out of FEMA from March 1, 2003 

through Fiscal Year 2005 (in Millions of Dollars) 

FEMA also contributed to DHS start-up costs and ongoing expenses, which 

reduced funds available for FEMA’s operating expenses. Though FEMA 

would have incurred some of these costs as an independent agency, 

evidence suggests that FEMA may have been assessed a disproportionate 

amount relative to several larger DHS entities. While all of this affected 

resources for FEMA’s day-to-day operations, the extent cannot be fully 

understood because FEMA does not have adequate information on how 

resources are aligned with those operations. Such information could be used 

to improve planning and management and provide greater accountability to 

Congress and the public. 

Although these shifting resources created challenges, the way FEMA 

managed its existing resources compounded problems. Notably, FEMA lacks 

a strategic workforce plan and related human capital strategies—such as

succession planning or a coordinated training effort—which are integral to 

managing resources. They enable an agency to define staffing levels, identify 

the critical skills needed to achieve its mission, and eliminate or mitigate 

gaps between current and future skills and competencies. FEMA also lacks 

business continuity plans for its day-to-day operations, which puts support 

for the disaster-relief mission at increased risk. Even FEMA staff’s strong 

sense of mission is no substitute for a plan and strategies for action. 

www.gao.gov/cgi-bin/getrpt?GAO-07-139.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Susan J. Irving, 

(202) 512-9142, irvings@gao.gov.
Contents 

Letter 1

Results in Brief 3

Background 5

Organizational Changes Created Uncertainty about the Availability 

of Resources, but FEMA Lacked Adequate Data to Understand 

the Effect on Day-to-Day Operations 8 

FEMA’s Lack of Strategic Management Tools Compounded 

Problems It Faced in Coping with Shifting Resources 18 

Conclusions 23

Recommendations for Executive Action 24 

Agency Comments 25 

Appendix I Analysis of Resources for Day-to-Day Operations 27 

Appendix II GAO Contact and Staff Acknowledgments 33 

Tables 

Table 1: Summary of FEMA’s Regular and Supplemental 

Appropriations for Fiscal Years 2001 to 2005 6 

Table 2: FEMA Organizational Changes, Fiscal Years 2001–2003 8 

Table 3: Illustration of Three Entities’ Share of DHS FTEs, Funding, 

and Assessments for the DHS WCF for Fiscal Year 2005 13 

Figures 

Figure 1: Programs and Associated Funding That Moved into and 

out of FEMA from March 1, 2003 through Fiscal Year 2005 

(in Millions of Dollars) 10 

Figure 2: Trends in Annual Funding for FEMA’s Non-DRF 

Operations, Fiscal Years 2001–2005 28 

Figure 3: Trends in FTEs for FEMA’s Non-DRF Operations, Fiscal 

Years 2001–2005 29 

Figure 4: Estimate of Funding for FEMA’s Day-to-Day Operations, 

Fiscal Years 2001–2005 31 

Figure 5: Estimate of Actual FTEs for FEMA’s Day-to-Day 

Operations, Fiscal Years 2001–2005 32 

Page i GAO-07-139 Budget Issues
Abbreviations 

CORE Cadre of On-call Response/Recovery Employees 

DHS Department of Homeland Security 

DRF Disaster Relief Fund 

DSA Disaster Support Activity 

EP&R Emergency Preparedness and Response 

FEMA Federal Emergency Management Agency 

FTE full-time equivalent 

MMRS Metropolitan Medical Response System 

ODP Office of Domestic Preparedness 

OMB Office of Management and Budget 

ONP Office of National Preparedness 

PFT permanent full-time 

SES Senior Executive Service 

WCF Working Capital Fund 

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Page ii GAO-07-139 Budget Issues
United States Government Accountability Office

Washington, DC 20548 

January 19, 2007 

The Honorable Robert C. Byrd 

Chairman 

Committee on Appropriations 

United States Senate 

The Honorable Judd Gregg 

Ranking Minority Member 

Subcommittee on Homeland Security 

Committee on Appropriations 

United States Senate 

The Honorable Joseph I. Lieberman 

Chairman Chairman 

The Honorable Susan M. Collins 

Ranking Minority Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable David R. Obey 

Chairman Chairman 

Committee on Appropriations 

House of Representatives 

The mission of the Federal Emergency Management Agency (FEMA) is to 

lead the nation in mitigating, responding to, and recovering from major 

domestic disasters, both natural and man-made, including terrorist 

incidents. Budgeting for FEMA’s mission is inherently difficult because the 

number, severity, and timing of disasters are unknown. In recognition of 

this fact, a large portion of FEMA’s funding is provided in emergency 

supplemental appropriations when a disaster is declared, and Congress 

has provided FEMA with the authority to hire additional nonpermanent 

staff and to leverage support from other agencies quickly. In contrast, 

funds to staff, manage, and operate other FEMA programs and underlying 

support functions—which we refer to in this report as its day-to-day 

operations—are requested in the President’s annual budget and, therefore, 

compete with other Department of Homeland Security (DHS) and federal

The mission of the Federal Emergency Management Agency (FEMA) is to 

lead the nation in mitigating, responding to, and recovering from major 

domestic disasters, both natural and man-made, including terrorist 

incidents. Budgeting for FEMA’s mission is inherently difficult because the 

number, severity, and timing of disasters are unknown. In recognition of 

this fact, a large portion of FEMA’s funding is provided in emergency 

supplemental appropriations when a disaster is declared, and Congress 

has provided FEMA with the authority to hire additional nonpermanent 

staff and to leverage support from other agencies quickly. In contrast, 

funds to staff, manage, and operate other FEMA programs and underlying 

support functions—which we refer to in this report as its day-to-day 

operations—are requested in the President’s annual budget and, therefore, 

compete with other Department of Homeland Security (DHS) and federal

Page 1 GAO-07-139 Budget Issues
priorities for resources.1

 Although there are obvious reasons to distinguish 

between funding for disasters and for day-to-day operations, it is 

important to recognize that day-to-day operations affect FEMA’s ability to 

deal effectively and as efficiently as possible with disasters. In this report 

we examined resources related to FEMA’s day-to-day operations from 

fiscal year 2001 through fiscal year 2005 and asked the following: 

1. What were resource trends for FEMA’s day-to-day operations? 

2. How did FEMA manage its resources for day-to-day operations? 

To address these objectives, we reviewed and analyzed fiscal years 2001 to

2005 budgetary and personnel data from the President’s budget, FEMA 

operating plans, FEMA and DHS budget documents, and budget and fulltime equivalent (FTE) employee summary tables provided by FEMA. To 

assess its reliability, we compared FEMA’s budget and personnel data with

data in the President’s budget. However, to make information comparable

for the President’s fiscal year 2004 budget request, the Office of 

Management and Budget (OMB) restructured fiscal years 2002 and 2003

budget data to reflect changes that occurred with the creation of DHS in 

2003. Because our review called for a more detailed presentation than 

what was available in the President’s budget, we relied on FEMA’s data. In 

addition, we analyzed personnel and training information and reviewed 

FEMA’s workforce planning contract. We determined that FEMA’s 

budgetary and personnel data were sufficiently reliable for purposes of 

providing background information and showing general trends. We 

interviewed staff in FEMA’s Office of Budget, officials from the Offices of 

Plans and Programs, Training, and Procurement, as well as program 

managers and staff from the Mitigation, Response, Recovery, and Human 

Resources Divisions. We did not interview FEMA regional managers 

because FEMA headquarters staff had primary responsibility for the 

resource allocations and programs that we examined. Therefore, we 

determined that our scope was sufficient and did not materially affect our 

findings. At DHS we interviewed staff from the DHS Budget Office, the 

Office of Financial Management, and the Office of the Inspector General. 

At OMB, we interviewed Resource Management Office staff with budget 

and oversight responsibilities for DHS and FEMA about the start-up of 

DHS and the role of OMB’s Planning Transition Office for the Department 

 1

The President’s budget request also includes some funding for the Disaster Relief Fund 

(DRF). This request is based on current DRF balances and estimates of past and future 

funding requirements for responding to presidentially declared disasters. 

Page 2 GAO-07-139 Budget Issues
of Homeland Security. This engagement was conducted under the 

Comptroller General’s authority from November 2005 until October 2006 

in accordance with generally accepted government auditing standards. 

Organizational changes caused considerable flux in FEMA’s resources 

from fiscal years 2001 through 2005. However, resource trends for day-today operations could not be fully understood from available data. Changes 

in FEMA’s structure and responsibilities occurred multiple times in this 

period. FEMA underwent several reorganizations in fiscal years 2001 and

2002, but the most significant change occurred in March 2003 when FEMA 

transitioned from an independent agency to a component of the newly 

created DHS. From the beginning of fiscal year 2003 through fiscal year 

2005, over $1.3 billion in new or significantly expanded programs came 

into FEMA, while programs with funding of nearly $1.5 billion were 

transferred from FEMA. Although these changes nearly balance in dollar 

terms, they mask the disruption in operations and uncertainty about the 

availability of resources that accompanied the nearly constant change. 

FEMA officials described challenges in responding to these changing 

responsibilities and shifting resources with roughly the same number of 

FTE employees.2

 At the same time, as a component of DHS, FEMA 

contributed to departmental start-up costs and departmental expenses, 

which reduced funds available for FEMA’s operating expenses. Even 

though some of these costs would have been incurred if FEMA had been

an independent agency, DHS billing notifications for fiscal year 2005 

indicated that FEMA may have been assessed a disproportionate amount 

relative to several larger DHS entities. Unquestionably these factors 

affected resources at FEMA, but the extent to which they affected 

resources for FEMA’s day-to-day operations cannot be fully understood 

because FEMA lacks adequate information on resources associated with 

its day-to-day operations. For example, FEMA lacks adequate data on 

reallocations of resources among programs, projects, and activities, on 

staffing levels, and, for some grant programs, on how much has been 

allocated. If FEMA collected such data, it could be used for improved 

planning and management, and greater accountability to Congress and the 

public. 

Results in Brief 

 2

FTE is a measure of employment used by the federal government to calculate the total 

number of regular straight-time hours worked by employees divided by the number of

compensable hours applicable to each fiscal year. 

Page 3 GAO-07-139 Budget Issues
Although shifting resources caused by its transition to DHS created 

challenges for FEMA, the agency’s management of existing resources 

compounded these problems. FEMA lacks some of the basic management 

tools that help an agency respond to changing circumstances. Most 

notably, FEMA lacks a strategic workforce plan and related human capital 

strategies—such as succession planning or a coordinated training effort. 

Such tools are integral to managing resources, as they enable an agency to 

define staffing levels, identify the critical skills needed to achieve its 

mission, and eliminate or mitigate gaps between current and future skills 

and competencies. In addition, FEMA lacks business continuity plans for 

its day-to-day operations. Since FEMA operates somewhat like a volunteer 

fire department in that all personnel can be called on to respond to 

disasters and none are assigned exclusively to day-to-day operations, 

having plans outlining which of these operations are critical and how they 

will be maintained when the agency is in disaster relief mode becomes 

much more important. FEMA officials told us that nondisaster programs 

are maintained on an ad hoc basis when permanent staff are deployed and 

that the agency does not have provisions for continuing programs when 

program managers are called into response duties. Without an 

understanding of who holds a mission-critical position for day-to-day 

operations and what minimum level of staffing is necessary even during 

disaster response, business continuity and support for the disaster-relief 

mission are put at increased risk. Even FEMA staff’s strong sense of 

mission, which was apparent in our interviews, is no substitute for a plan 

and strategies for action.

In this report, we make a series of recommendations to help FEMA better 

track its resources for day-to-day operations, identify current and future 

staffing needs through workforce planning, ensure leadership capacity 

through training and development, and maintain business continuity when 

a disaster is declared. We also recommend that the Secretary of Homeland 

Security direct the Director of FEMA to work with Congress in carrying 

out these recommendations to help ensure FEMA provides sufficient 

information to enable Congress to conduct its oversight role.

We requested comments on a draft of this report from the Secretary of 

Homeland Security. DHS did not provide formal comments on the draft 

report but did provide technical comments, which we incorporated where 

appropriate. OMB staff also provided technical comments on an excerpt of

the draft that referred to our discussion with OMB; we incorporated these

where appropriate. 

Page 4 GAO-07-139 Budget Issues
In response to concerns about the lack of a coordinated federal approach

to disaster relief, President Carter established FEMA by Executive Order

in 1978 to consolidate and coordinate emergency management functions in

one location. FEMA absorbed the Federal Insurance Administration, the 

National Fire Prevention and Control Administration, the National 

Weather Service Community Preparedness Program, the Federal 

Preparedness Agency of the General Services Administration, the Federal 

Disaster Assistance Administration activities from the Department of 

Housing and Urban Development, and civil defense responsibilities from 

the Defense Department’s Defense Civil Preparedness Agency. Between 

1979 and 2003, FEMA’s responsibilities expanded to include emergency 

management for human-made and technological disasters, such as 

managing the off-site consequence of accidents at nuclear power plants, 

hazardous materials emergency management, chemical weapons disposal, 

and hazardous material disaster mitigation initiatives. 

Background 

In 2003, FEMA became a component of the Emergency Preparedness and 

Response (EP&R) Directorate in the newly created DHS. Much like its 

FEMA predecessor, EP&R’s mission was to help the nation to prepare for,

mitigate the effects of, respond to, and recover from disasters.3

 While 

FEMA moved intact to DHS and most of its operations became part of the 

EP&R Directorate, some of its functions were moved to other 

organizations within DHS. In addition, functions that were formerly part of 

other agencies were incorporated into the new EP&R organization. Once 

in the department, FEMA’s preparedness functions were transferred over 2 

years to other entities in DHS,4

 reducing its mission responsibilities. 

However, recent legislation transferred many preparedness functions back 

to FEMA.5

 Today, once again, FEMA’s charge is to lead the nation’s efforts 

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

 3

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, (Pub. 

L. No. 93-288), known as the Stafford Act, constitutes the statutory authority for most 

federal disaster response activities, especially as they pertain to FEMA and FEMA 

programs. This act authorizes the President to issue a “major disaster” declaration to

provide a wide range of federal aid to states determined to be overwhelmed by hurricanes

or other disasters. FEMA is tasked with coordinating the response under the Stafford Act.

4

From enactment of the Homeland Security Act of 2002 in November 2002 to September 

2005, 11 preparedness functions or authorities were transferred from FEMA. In October 

2005, FEMA’s remaining preparedness functions were transferred to DHS’s new 

Preparedness Directorate, which was created to consolidate preparedness assets from 

across DHS, facilitate grants, and oversee nationwide preparedness efforts. 

5

Post-Katrina Emergency Management Reform Act of 2006, Pub. L. No. 109-295, Title VI. 

Page 5 GAO-07-139 Budget Issues
against the risk of natural disasters, acts of terrorism, and other man-made 

disasters, including catastrophic incidents. 

FEMA funding is provided in both regular and supplemental 

appropriations. FEMA’s Disaster Relief Fund (DRF), which supports a 

wide range of programs in response to presidentially declared disasters, 

receives an annual regular appropriation that is based on the 5-year 

average for direct disaster activity, excluding extraordinary events. 

Supplemental funding is requested if funds in the regular appropriation are 

not sufficient to respond to specific presidentially declared disasters. The 

amount of this funding varies depending on the number and severity of 

disasters (see table 1 below for a summary of FEMA’s regular and 

supplemental appropriations from fiscal years 2001 to 2005). In its regular 

annual appropriations FEMA receives not only some funding for its DRF 

but also funding to provide for day-to-day agency operations, including 

financial management, human resources, procurement, policy direction, 

and administration of FEMA programs.6

 Some programs that provide 

funding, such as grants to state and local governments—and not to FEMA 

operations—are funded in these appropriations as well. 

Table 1: Summary of FEMA’s Regular and Supplemental Appropriations for Fiscal Years 2001 to 2005 

Millions of dollars 

Fiscal year 

2001 2002 2003 2004 2005

Regular Disaster Relief Fund appropriations $293.6 $611.1 $773.4 $1,767.5 $2,042.4

Other regular appropriations 839.8 921.9 2,552.9 1,525.9 1,046.8

Supplemental Disaster Relief Fund appropriations 4,383.1 8,007.6 1,925.3 2,245.0 66,385.0

Other supplemental appropriations 0.0 531.4a86.3b0.0 100.0c

Source: GAO presentation of FEMA data. 

a

This supplemental funding was for the following activities: $210 million for fire grants; $25 million for 

preparedness; $10 million for the Winter Olympics; $225.4 million for fire grants, the existing national 

urban search and rescue system, and interoperable communications equipment; and $61 million for 

Cerro Grande Fire Claims. 

b

This supplemental funding was for the Liberty Shield. 

c

This supplemental funding was for the National Disaster Medical System. 

 6

FEMA administers a mix of programs in the four areas of emergency management—

Preparedness (now known as Readiness), Mitigation, Response, and Recovery. These 

programs include the predisaster mitigation, flood mitigation, map modernization, National 

Flood Insurance, and public health programs. 

Page 6 GAO-07-139 Budget Issues
Similar to FEMA’s funding arrangement, most of its employees are hired to

perform work related to a specific, presidentially declared disaster. The 

majority of FEMA’s workforce is comprised of nonpermanent employees 

with various terms (from 120 days to 4 years), who are paid out of the 

DRF. As with the funding for the DRF, the number of these employees can 

fluctuate in response to the number and severity of disasters.7

 The 

remainder of FEMA’s workforce is comprised of about 2,100 permanent 

full-time (PFT) employees, who are paid primarily out of FEMA’s 

nondisaster relief fund accounts. FEMA also uses contractors to 

administer some of its programs, but FEMA does not track data on the 

level of contract support it receives. 

Certain nonpermanent staff, known as the Cadre of On-call 

Response/Recovery Employees (CORE), perform functions similar to 

those performed by PFT employees.8

 Although paid from the DRF account, 

the CORE work alongside PFT employees in headquarters and the regions 

in both program offices and support functions, such as human resources 

and IT, and both CORE and PFT employees can be deployed to respond to 

disasters. 

 7

From fiscal years 2001 to 2005, the following numbers of FTE employees were paid out of

the DRF: fiscal year 2001 = 2,521; fiscal year 2002 = 2,865; fiscal year 2003 = 3,289; fiscal 

year 2004 = 3,330; fiscal year 2005 = 5,458. 

8

According to FEMA officials, the CORE was developed in the early 1990s to improve

management of administrative overhead in the DRF and to make disaster relief operations 

more efficient. The number of CORE FTE employees at FEMA from fiscal years 2001 to 

2005 was as follows: fiscal year 2001 = 706; fiscal year 2002 = 733; fiscal year 2003 = 732; 

fiscal year 2004 = 730; fiscal year 2005 = 685. 

Page 7 GAO-07-139 Budget Issues
To better understand resource trends for FEMA’s day-to-day operations, 

information about aggregate resource trends should be viewed in the 

context of organizational changes, priorities, and the movement of 

resources within FEMA and DHS. However, FEMA lacks adequate

information on the resources associated with its day-to-day operations. 

Without such data, FEMA cannot strategically plan for and invest in these 

operations, which are necessary for fulfilling its disaster-relief mission. 

Moreover, it cannot ensure accountability to Congress and the public that

these resources were used efficiently, effectively, or for the highest 

priorities. 

Organizational 

Changes Created 

Uncertainty about the 

Availability of 

Resources, but FEMA 

Lacked Adequate 

Data to Understand 

the Effect on Day-toDay Operations 

FEMA’s Responsibilities 

Were in Flux, Which 

Created Uncertainty about 

the Availability of 

Resources 

Even prior to its transition to DHS, FEMA was undergoing organizational 

change. In response to domestic terrorist incidents in the 1990s—such as 

the bombings of the World Trade Center in New York City in 1993 and the

Alfred P. Murrah federal building in Oklahoma City in 1995—federal 

efforts to focus on preparedness against terrorist attacks increased. This

led to the first of several organizational changes between fiscal years 2001 

and 2003, as shown in table 2. 

Table 2: FEMA Organizational Changes, Fiscal Years 2001–2003 

2001 2002 2003

Before 9/11 After 9/11

The President created an

Office of National 

Preparedness within FEMA 

FEMA underwent an 

agencywide reorganization 

to streamline service 

delivery 

FEMA’s new Office of 

National 

Preparedness was 

assigned increased 

responsibility for 

working with first 

responder agencies 

FEMA underwent 

another 

reorganization 

that split 

preparedness 

functions from 

readiness and 

response 

FEMA became

part of the 

newly created 

Department of 

Homeland

Security (DHS)

Source: GAO presentation of information from FEMA, the DHS Office of the Inspector General, and past GAO work. 

Recognizing a need for greater coordination among federal agencies in

responding to a terrorist attack, the President created the Office of 

National Preparedness (ONP) within FEMA in May 2001 to provide 

leadership in the coordination and facilitation of all federal efforts to assist 

state and local emergency management and emergency response 

organizations. Specifically, FEMA was to assist with planning, training, 

Page 8 GAO-07-139 Budget Issues
equipment, and exercises necessary to build and sustain capability to 

respond to any emergency or disaster. FEMA also underwent an 

agencywide reorganization in 2001 to streamline the agency and devote

more employee effort to service delivery by bringing together programs 

that shared complementary missions. FEMA’s Preparedness, Training, and 

Exercises Directorate merged with its Response and Recovery Directorate 

and became the Readiness, Response, and Recovery Directorate. FEMA 

also created the External Affairs and Administration and Resource 

Planning Directorates. 

The terrorist attacks of September 11, 2001 prompted additional changes 

at FEMA. FEMA led the federal response to aid victims of the September 

11 attacks and afterward took on a growing role in promoting emergency 

preparedness, largely focused on preparedness for future terrorist attacks. 

FEMA’s ONP was assigned increased responsibility for working with first 

responders, such as police, fire, emergency medical, and public health

personnel, to ensure that they were trained and equipped to deal with 

weapons of mass destruction. FEMA underwent another reorganization in

fiscal year 2002, when the Readiness, Response, and Recovery Directorate 

that was created in fiscal year 2001 was split into the National

Preparedness Division and the Response and Recovery Division. 

In March 2003, FEMA—which had been an independent agency since its 

inception—became part of the newly created DHS. In accordance with the 

Homeland Security Act of 2002 and subsequent determination orders 

issued by OMB, FEMA’s assets and responsibilities were transferred to 

DHS’s EP&R Directorate. The Undersecretary of EP&R assumed the 

responsibilities of the Director of FEMA, and EP&R retained use of the 

name FEMA. Many of the changes in FEMA’s resources from 2003 to 2005

can be attributed to FEMA’s transfer to DHS and its shifting organizational 

responsibilities, as shown in figure 1 below. 

Page 9 GAO-07-139 Budget Issues
Figure 1: Programs and Associated Funding That Moved into and out of FEMA from March 1, 2003 through Fiscal Year 2005 

(in Millions of Dollars) 

DHS

Department of 

Health and Human 

Services (HHS)

National Stockpile $429

Metropolitan Medical 

Response System (MMRS) $50

Public Health Programs $34

program moved

to DHS

programs moved

to DHS

program moved into FEMA

Programs that transferred into 

other entities in DHS

Inspector General $13.9

Grants for Emergency 

Management (created in 2003) $70

Fire Grants Program $745

Emergency Management

Performance Grant $163.9

Citizen Corps (created in 2003) $20

FEMA

(moved into DHS in 2003) 

program moved back to HHS

program moved into FEMA

program moved into FEMA

Source: GAO analysis of FEMA data.

In total, over $1.3 billion in funding for new or significantly expanded 

programs came into FEMA between the beginning of fiscal year 2003 and

fiscal year 2004, and nearly $1.5 billion left FEMA by fiscal year 2005. 

Although the movement of programs and their associated funding in and

out of FEMA nearly balanced in dollar terms, this masks the amount of 

change and the challenges described by FEMA officials as the 

organization, with roughly the same number of FTE employees, responded 

to its increased responsibilities, only in most cases to have them taken 

away later. In the transition to DHS in fiscal year 2003, for instance, FEMA 

gained over $513 million in new programs from HHS. However, by fiscal 

year 2005, two of these programs and most of the associated funding were 

transferred out of FEMA: the Strategic National Stockpile was transferred 

back to HHS and the MMRS was transferred to another component of 

DHS, leaving in FEMA just $34 million of the more than $513 million in 

Page 10 GAO-07-139 Budget Issues
public health programs that had been transferred to FEMA less than 2 

years before. 

FEMA also had most of its terrorism-related programs transferred to DHS. 

In the transition, nearly $998.9 million in existing FEMA preparedness 

programs that were deemed to be terrorism-related were transferred from 

FEMA to the Office of Domestic Preparedness (ODP) in DHS. Most of 

what remained in FEMA was not considered homeland security-related,9

 a 

designation based on the National Strategy for Homeland Security and 

used by the administration and OMB to evaluate funding priorities.10 Since 

the September 11, 2001 terrorist attacks, the administration’s guidance for 

preparation of agency budget submissions has encouraged agencies to 

hold nonhomeland security, nondefense funding level.11 For fiscal years 

2003 through 2005 the President’s budget requests for most of FEMA’s 

programs have been consistent with this policy. 

In addition to resource fluctuations associated with its changing 

responsibilities, some FEMA resources were transferred to establish a 

departmental structure at DHS. OMB requested that a total of $125 million 

be transferred from component entities for DHS start-up costs. Of this 

$125 million, FEMA’s share was $32 million. OMB officials involved with 

the DHS transition said OMB reviewed the relative size of agency budgets 

and staffing levels, their levels of unobligated balances, and the services 

they received from their parent departments to get a sense of the 

components’ appropriate relative share of the start-up costs. Yet, 

according to our analysis of a letter from OMB to the Chairman of the 

Senate Committee on Appropriations dated December 20, 2002, FEMA 

paid about the same amount as each of the other three larger contributing 

agencies, which transferred entities such as the Immigration and 

 9

Homeland Security encompasses those activities that are focused on combating terrorism 

and occur within the United States and its territories. According to the Budget of the U.S.

Government, not all activities carried out by DHS constitute homeland security funding

(e.g., response to natural disasters, Coast Guard search and rescue activities). 

10The National Strategy for Homeland Security, which was published by the Office of

Homeland Security in July 2002, is available at http://www.whitehouse.gov/homeland/book/

(downloaded Oct. 4, 2006). 

11Since 2003, the President’s budget requests for discretionary funding for nonhomeland

security, nondefense programs have increased an average of 2.82 percent per year, while 

the President’s requests for discretionary funding for Homeland Security and Department

of Defense programs have increased an average of 4.62 percent per year. 

Page 11 GAO-07-139 Budget Issues
Naturalization Service, Transportation Security Administration, Coast 

Guard, U.S. Customs Service, and U.S. Secret Service.12

After DHS was established, additional payments that FEMA made to 

support ongoing departmental operations also affected its resources. In 

the period after Hurricane Katrina, the FEMA director who had served 

through the storm publicly claimed that FEMA’s resources were 

compromised as a result of being “taxed” by DHS. Although that individual

is no longer at FEMA, this claim was repeated by current FEMA officials 

with whom we spoke.13 These assessments were actually payments made 

to DHS’s Working Capital Fund (WCF), a type of intragovernmental 

revolving fund that agencies use to support services that are shared across 

the agency. The DHS WCF supports a number of activities—including 

payroll, governmentwide mandated service activities (such as 

e-government initiatives), and software licensing, many of which FEMA 

would have had to pay for as an independent agency. In fact, FEMA had a 

WCF when it was an independent agency before it transferred to DHS. In 

the transfer, FEMA’s WCF became DHS’s WCF. 

WCF billing notifications for fiscal year 2005—the first year for which 

sufficient data are available—do indicate that FEMA may have been 

assessed a disproportionate amount for the WCF compared to several 

larger entities in DHS. According to the WCF billing notifications and DHS 

officials, the WCF assessments for that year were based on the number of 

FTE employees in an entity, the amount of funding that DHS defined as an 

entity’s “discretionary budget,”14 or how frequently an entity used a 

particular service. The entity with the largest percentage of FTEs was the 

Transportation Security Administration. The entity with the largest 

percentage of DHS discretionary budget was the U.S. Coast Guard. Table 3 

 12The Department of Justice was to transfer $30 million from the Immigration and 

Naturalization Service; the Department of Transportation was to transfer $25 million from

the Transportation Security Administration and $3.5 million from the Coast Guard; the 

Department of the Treasury was to transfer $30 million from the U.S. Customs Service and 

$4.5 million from the U.S. Secret Service. 

13Although the term “tax” was used by officials, we use assessment to describe charges to

DHS organizations for centralized services. 

14DHS determined what constituted “discretionary budget.” This distinction is not

synonymous with funding that is considered discretionary based on its distinction as such

in an appropriation act. For example, FEMA received $1,146,800,000 in non-DRF funding 

(including supplemental funding) for fiscal year 2005, but DHS determined that its

discretionary funding for the purposes of WCF assessments was $480,649,000. 

Page 12 GAO-07-139 Budget Issues
below shows for fiscal year 2005 the share of FEMA, Transportation 

Security Administration, and U.S. Coast Guard FTEs and discretionary 

funding relative to DHS as a whole, the percent that each organization was 

assessed for fiscal year 2005 relative to the total amount assessed by the 

WCF, and the percent of the organization’s discretionary funding that the 

assessment represented.

Table 3: Illustration of Three Entities’ Share of DHS FTEs, Funding, and

Assessments for the DHS WCF for Fiscal Year 2005 

DHS entity 

Percent of

DHS FTEs 

used for 

billing

purposes

Percent of DHS 

discretionary 

funding used

for billing 

purposes 

Percent of

total WCF 

assessment

Percent of

WCF 

assessment

relative to

entity’s 

discretionary 

budget

Emergency 

Preparedness and 

Response (FEMA) 1.9 2.08 6.19 3.88

Transportation 

Security 

Administration 38.2 14.14 6.96 0.64

U.S. Coast Guard 4.8 27.24 5.45 0.26 

Source: GAO analysis of DHS data. 

As the table shows, FEMA paid more than the entity with the largest 

percentage of DHS’s discretionary budget—the U.S. Coast Guard—and 

nearly the same amount as the DHS entity with the largest percentage of 

DHS’s FTEs—the Transportation Security Administration. According to 

our analysis of the WCF billing notifications, items that were based on 

usage or participation (i.e., are not simply correlated with number of FTEs 

or amount of discretionary funding) could have accounted for up to $15.8 

million of FEMA’s $18.7 million assessment. However, a closer 

examination of what DHS labeled algorithms shows that the way usage or

participation was factored into the calculations in many cases was not 

straightforward; it was often based on a combination of unweighted 

variables, some of which related to the number of FTEs or the amount of 

funding. This again raises questions about how assessments actually were 

Page 13 GAO-07-139 Budget Issues
determined.15 Because a number of usage charges actually related to FTEs 

or funding, it is unlikely that an agency with a workforce and budget the 

size of FEMA’s could have used the same amount of resources as its much

larger counterparts. 

A DHS official acknowledged that finding the “right size” of the different 

components’ assessments has been an ongoing challenge and that the 

WCF algorithms are being improved to ensure fairness and equity. Several 

FEMA officials with whom we spoke confirmed that the process has 

improved and attributed this in part to congressional oversight of the 

WCF. 

FEMA program officials said that FEMA’s share of DHS start-up costs and 

its assessment for the WCF directly affected the level of service they were 

able to provide from fiscal years 2004 to 2005. Several officials said that 

the WCF assessments in particular contributed to a hiring freeze. FEMA 

reported in its Fiscal Year 2005 Mid-Year Budget Review report to DHS 

that it froze hiring for over 500 positions in September 2004 to ensure 

availability of funding for all onboard staff. DHS clarified that the hiring 

freeze was temporary—lasting only until January 2005—and was instituted 

primarily to allow FEMA to complete a baseline staffing review and 

implement its Position Management program. Nonetheless, nearly all of 

the FEMA program officials that we spoke with said that this hiring freeze 

made it difficult to run existing programs or contributed to delays in 

implementing new programs. In addition, FEMA officials said that the 

hiring freeze further compounded the effects of the increases in attrition 

that began after the September 11, 2001 terrorist attacks. 

 15For example, the explanation given for the DHS’s Chief Procurement Officer’s Strategic

Sourcing Initiative charge was that it was based on actual usage of several variables. 

However, the algorithm for that particular charge was stated as: “Average of Component

Percentage (of Percentage Share of each of three key measures: # of acquisition personnel, 

dollar volume, # of transactions) X initiative Amount Required = Contribution per

component.” The number of acquisition personnel would be constrained by FTEs and the 

dollar volume of transactions would be constrained by the budget. Furthermore, since the

“initiative Amount Required” is not a straightforward number, it is hard to replicate the 

calculation for any component. 

Page 14 GAO-07-139 Budget Issues
Organizational changes unquestionably affected resources at FEMA, but 

the extent to which they affected resources for FEMA’s day-to-day 

operations cannot be fully understood because FEMA lacks adequate 

information on the resources associated with such operations. To ensure 

that FEMA’s day-to-day operations are efficiently and effectively 

supporting the agency’s disaster relief mission, FEMA must strategically

plan for and manage these functions. Simply having data about 

transactions or decisions is not enough; strategic planning and 

management requires data and tools that would enable FEMA to identify 

the resources associated with its day-to-day operations. However, FEMA 

lacks adequate data in a number of areas, including reallocations of 

resources among programs, projects, and activities, staffing levels, and, in

some cases, FEMA appropriations allocated for grant programs. Not only 

would such data help FEMA better manage its day-to-day resources, but, 

as we have previously reported,16 having sufficient information on 

resource investments, such as budget documents combined with 

performance data, provides a valuable tool to assist members of Congress 

in their oversight responsibilities. 

Resource Trends for 

FEMA’s Day-to-Day 

Operations from Fiscal 

Year 2001 to 2005 Cannot 

Be Fully Understood, 

Because FEMA Lacks 

Adequate Data 

Throughout all the organizational changes one thing that remained 

consistent was that the level of management and oversight of FEMA’s 

resources once appropriations had been enacted was minimal. For 

example, although reprogramming actions—shifts in resources within an 

appropriation between offices, divisions, or activities that occur during the 

fiscal year—affect resource availability, FEMA does not capture data in a 

way that makes it practical to analyze reprogramming trends. According to

FEMA staff, a financial auditing firm had reached the same conclusions 

when it tried to perform an analysis of reprogramming actions several 

years earlier. A FEMA official said budget analysts receive between 500 

and 1,000 reprogramming requests every year. However, this official said

that budget analysts do not assess the appropriateness of a reprogramming 

request; they simply check requests against FEMA’s apportionment to 

ensure that the funding is available and that the request complies with 

applicable rules and laws. Once approved, FEMA captures information 

about reprogramming actions on a transaction-by-transaction basis in its 

financial management system, which is not equipped to provide trend 

 16GAO, Congressional Oversight: FAA Case Study Shows How Agency Performance, 

Budgeting, and Financial Information Could Enhance Oversight, GAO-06-378 

(Washington, D.C.: Mar. 8, 2006). 

Page 15 GAO-07-139 Budget Issues
information about reprogrammings in the aggregate.17 Without this 

information, FEMA cannot know whether reprogramming decisions made 

during the year have gone for the highest organizational priorities or 

determine definitively what resources support day-to-day operations. 

While FEMA is not required by law to aggregate its reprogramming data, 

nothing prevents FEMA from developing additional aggregations of data 

for management purposes, particularly in light of its unique operating and 

funding environment. 

FEMA not only lacked useful information on funding changes that 

occurred during the year, but until fiscal year 2005 it was also unable to 

produce accurate information on the number of positions it had and where 

they were located in the organization. Despite improvements in the 

information that is available, FEMA still uses multiple and disparate 

systems, managed by different offices, to gather information about its staff 

levels. The Budget Office maintains FTE data; the Human Resources 

Division maintains data about the number of “onboard” employees and

separations; and the Office of Plans and Programs maintains the 

“Manpower Database” to track the number of positions and their location 

in the organization. 

Moreover, FEMA does not have a positive definition of which activities 

constitute its day-to-day operations—FEMA has categorized much of what 

it does on a day-to-day basis simply as “nondisaster,” even though many of

those activities are necessary to support its disaster relief mission. As a 

result, FEMA could not provide information that was sufficient to allow us 

to accurately report on the resources associated with its day-to-day 

operations. When asked by the DHS Office of the Inspector General and

later by us to identify the resources associated with its operations, FEMA 

divided its annual funding and FTE data into three categories—operating 

 17FEMA maintains a paper trail on reallocation requests for 3 years, but does not have a 

process or mechanism for analyzing this information. 

Page 16 GAO-07-139 Budget Issues
expenses, other FEMA programs, and DRF.18 The FEMA Budget Office 

presented the summary data as: (1) “FEMA without DRF” (the sum of 

operating expenses and other FEMA programs), (2) DRF, and (3) total. 

Because DRF funding is primarily available only in response to a specific, 

presidentially declared disaster, we attempted to use the “FEMA without 

DRF”—or “non-DRF”—data as a proxy for day-to-day operations. 

However, the non-DRF category presents an inaccurate picture of FEMA’s 

day-to-day operations for two reasons. First, it includes some funding, 

such as for grants, that is not available to FEMA for its day-to-day 

operations because FEMA distributes it to states and local governments. 

Neither FEMA’s Budget Office nor the program offices responsible for 

grants administration were able to separate out the amount of funding 

allocated for grants from other operating expense funding provided in the 

same account. In these cases, rather than demonstrating that 

consideration had been given to how much of the resources available for 

day-to-day operations should be used instead to fund grants, FEMA could

only report on how much had been obligated for grants, subsidies, and 

other contributions. Second, the non-DRF data leaves out a key 

component of FEMA’s day-to-day operations—the Disaster Support 

Activity (DSA). Although part of the DRF, the DSA provides funding for 

ongoing capabilities, such as training, that are not readily attributable to 

any one specific declared disaster. FEMA has deemed these support 

expenditures essential to providing (1) timely disaster response, (2) 

responsive customer service, and (3) cost-effective program management 

and delivery. (See app. I for more details.) Without a clear understanding 

of the resources associated with its day-to-day operations, FEMA lacks the 

data that would enable it to identify areas that are working well, 

opportunities for improvement and, ultimately, where best to invest 

resources. 

 18From fiscal year 2001 to fiscal year 2003, FEMA’s operating expenses consisted of funding 

from its Salaries and Expenses account and its Emergency Management Planning and

Assistance account. In fiscal years 2004 and 2005, funding from the following accounts

made up FEMA’s operating expenses: Office of the Under Secretary, Preparedness 

Mitigation Response and Recovery, and Administrative and Regional Operations. In fiscal 

year 2005, the following accounts composed FEMA’s “other programs”: Pre-Disaster 

Mitigation, Flood Mitigation Fund, National Flood Insurance Fund, Emergency Food and 

Shelter, Disaster Assistance Direct Loan Program Account, Public Health Programs, and 

Flood Map Modernization. FEMA also reported data on its supplemental funding in two

categories—DRF and Other. FEMA received supplemental DRF funding every year of our 

review, while other supplemental funding was provided only in fiscal years 2002, 2003, and 

2005. 

Page 17 GAO-07-139 Budget Issues
FEMA’s Lack of 

Strategic Management 

Tools Compounded 

Problems It Faced in 

Coping with Shifting 

Resources 

FEMA Lacks a Strategic 

Workforce Plan 

A strategic workforce plan is integral to defining the appropriate level of

staffing, identifying the critical skills needed to achieve the mission, and 

eliminating gaps to prepare the agency for future needs. Strategic 

workforce planning, also called human capital planning, helps an 

organization align its staffing with its current and emerging mission and 

programmatic goals. This includes developing long-term strategies for 

acquiring, developing, and retaining an organization’s total workforce, 

including full- and part-time federal staff and contractors. This is 

especially important in a dynamic environment in which the need for 

changing technologies and skills are coupled with constrained budgets. 

In the wake of Hurricane Katrina, considerable attention was given to the

fact that FEMA had been under its authorized staffing level for several 

years,19 but FEMA has not developed a strategic workforce plan, and 

therefore cannot demonstrate that the authorized FTE level and positions

are appropriate. FEMA did not have a strategic workforce plan at any time 

between fiscal years 2001 and 2005 and it did not know until January 2005 

how many positions it had or where they were located in the organization.

At that time, FEMA inventoried its existing positions and used that 

information to establish a “baseline” for the number and type of positions 

in the agency. Although FEMA officials said this baseline represented the 

organization’s staffing needs, in fact it was only the number of positions in 

the organization at that point in time and did not represent an assessment 

of the agency’s composition and needs. In addition, this baseline does not 

include any information about the size or composition of its contractor 

 19Reports issued by the U.S. Senate, the U.S. House of Representatives, the White House, 

and the DHS Office of the Inspector General all pointed to staffing shortages at FEMA as

affecting the agency’s ability to achieve its mission in the wake of Hurricane Katrina. Many 

of the FEMA officials that we spoke with also pointed to staffing as a primary challenge at

the agency. 

Page 18 GAO-07-139 Budget Issues
workforce—which FEMA officials said is a growing component of the 

organization’s total workforce. Furthermore, FEMA’s authorized FTE 

levels may not be realistic as funding has become more constrained. 

OMB’s most recent budget formulation guidance directed all federal 

agencies to review their authorized FTE levels to bring them in line with 

available funding. 

We are not the first to note FEMA’s lack of a strategic workforce plan. In

2001, FEMA received an unsatisfactory rating for Human Capital initiatives

in the President’s Management Agenda scorecard, OMB’s assessment of 

the management of federal agencies. The scorecard results, published in 

the Fiscal Year 2003 Budget of the United States Government, noted that 

FEMA lacked a strategy for linking human capital to fiscal resources and 

agency goals and that FEMA needed to develop a workforce-restructuring 

plan that addressed how the agency will attract and retain personnel with

the skills to perform core agency functions including program oversight 

and analysis. In 2004, OPM recommended that FEMA develop a 

comprehensive human capital plan, including a thorough workforce 

analysis that establishes staffing levels aligned with FEMA’s mission, 

goals, and organizational objectives. Most recently, the Post-Katrina 

Emergency Reform Act of 2006 included a provision that requires FEMA to 

develop a strategic workforce plan within 6 months of enactment of the 

act. 

FEMA included workforce planning as a priority in its 2003 to 2008 

Strategic Plan and, in September 2005, FEMA awarded a 1-year contract to

a consulting firm to help the agency with the technical aspects of 

developing its workforce plan. However, FEMA’s workforce planning 

efforts have not been conducted in accordance with leading practices in

this area. As we have previously reported, the first step in strategic 

workforce planning is to set strategic direction,20 but according to FEMA 

officials, the workforce planning effort is being conducted without such a 

perspective. Instead, it is being conducted from the bottom up, division by 

division. A FEMA official told us that the instability created by FEMA’s 

frequent reorganizations has made strategic workforce planning difficult. 

 20As we reported in Human Capital: Key Principles for Effective Strategic Workforce 

Planning, GAO-04-39 (Washington, D.C.: Dec. 11, 2003), the steps of the strategic 

workforce planning process are as follows: (1) set strategic direction, (2) conduct a 

workforce gap analysis, (3) develop workforce strategies to fill the gaps, and (4) evaluate

and revise strategies. Throughout the process, it is important to have the involvement of

management and employees. 

Page 19 GAO-07-139 Budget Issues
Instead of identifying mission-critical needs, the agency began workforce 

planning in divisions of FEMA that were relatively stable, that is, those 

that were less likely to be reorganized. FEMA’s goal is to complete two 

divisions per year, with a goal of covering the entire agency by 2009. 

However, one official speculated that ongoing changes at DHS and FEMA 

may delay the completion of plans for all divisions. Although this approach 

may seem pragmatic, it is more likely to result in plans that meet the 

immediate needs of individual divisions rather than produce an integrated,

long-term strategy for the entire agency. 

As part of a workforce planning effort, we have noted in previous work 

that agencies should develop human capital strategies—including 

succession planning, training, and staff development—to eliminate gaps 

between the future and current skills and competencies needed for 

mission success.21 FEMA, however, lacks a succession plan and does not 

have a coordinated or strategic approach to employee training or 

development. 

FEMA Has Not Engaged in 

Succession Planning 

Succession planning—a process by which organizations identify, develop,

and select their people to ensure an ongoing supply of successors who are 

the right people, with the right skills, at the right time for leadership and 

other key positions—is especially important for organizations that are 

undergoing change.22 In fact, according to one participant at a GAO forum 

on mergers and transformation, private sector experience with mergers 

and acquisitions is that over 40 percent of executives in acquired 

companies leave within the first year and 75 percent within the first 3 

years.23 Though FEMA’s experience was less dramatic, succession 

planning was described as nonexistent and several officials cited the lack 

of succession planning as the agency’s weakest link. Many FEMA 

managers described the loss of institutional knowledge when senior 

employees left in the transition to DHS and how those Senior Executive

Service (SES) and other managers that remained often covered vacant 

 21See GAO-04-39. 

22For more information about succession planning, see GAO, Human Capital: Succession

Planning and Management Is Critical Driver of Organizational Transformation, 

GAO-04-127T (Washington, D.C.: Oct. 1, 2003). 

23GAO, Highlights of a GAO Forum, Mergers and Transformation: Lessons Learned for a

Department of Homeland Security and Other Federal Agencies, GAO-03-293SP 

(Washington, D.C.: Nov. 14, 2002), p. 9. 

Page 20 GAO-07-139 Budget Issues
positions, performing more than one job at a time. From fiscal year 2002—

the last year that FEMA was an independent agency—through fiscal year 

2005, FEMA lost over 25 percent of its permanent SES employees. As SES 

employees generally represent the most experienced and senior segment 

of the federal workforce, they are critical to leadership continuity, 

institutional knowledge, and expertise. Nor was there an experienced midlevel cadre to mitigate these losses: 16 percent of FEMA’s career GS-15 

staff were new to their positions in fiscal year 2004. Although turnover was 

to be expected, FEMA must recruit key talent to limit the effect of these 

departures. 

In addition to helping FEMA replace people who have left or are leaving in

the near term, succession planning is important as a forward-looking 

exercise to ensure that FEMA can respond to emerging human capital 

challenges (e.g., the predicted federal retirement wave). Like the rest of 

the government, FEMA faces the possibility of losing a significant 

percentage of staff—especially at the managerial and leadership levels—to

retirement. About a third of FEMA’s SES and GS-15 leaders were eligible

to retire in fiscal year 2005, and OPM data projects that this percentage

will increase to over half by the end of fiscal year 2010.24 This increases the 

importance of thinking about what knowledge, skills, and abilities are 

important—simply replacing staff without thought would miss a chance to

set direction for the future. 

FEMA Does Not Have a 

Coordinated or Strategic 

Approach to Employee 

Training or Development 

for Its Permanent FullTime Employees 

We have previously reported that agencies need to invest resources, 

including time and money, to ensure that employees have the information, 

skills, and competencies they need to work effectively in a rapidly 

changing and complex environment.25 However, FEMA’s training and 

development programs are not designed to ensure this because FEMA 

does not have a coordinated or strategic approach to training and 

development programs for its PFT staff. For example, FEMA’s training 

requirements are not aligned with reported needs. FEMA training officials 

identified training in human resources management, financial 

 24Projected retirement eligibility rates as of the end of fiscal year 2010 assume that 

everyone onboard at the end of fiscal year 2005 stays employed at FEMA until September 

30, 2010. The eligibility rates would drop as eligible staff retired between October 1, 2005 

and September 30, 2010.

25For additional information on training and development efforts, please see GAO, Human

Capital: A Guide for Assessing Strategic Training and Development Efforts in the

Federal Government, GAO-04-546G (Washington, D.C.: Mar. 1, 2004). 

Page 21 GAO-07-139 Budget Issues
management, and subject matter expertise as the areas of greatest need 

for the agency, but FEMA’s training requirements do not reflect these. In

addition, FEMA does not prioritize funding to ensure that the most 

important training needs are addressed first. We were told that training 

funds are generally available on a first-come, first-served basis. 

Moreover, FEMA does not have an integrated system to track employee 

training and, therefore, no way of reliably tracking the cost of training, 

who has received it, or how successful it has been. As a result, it is 

extremely difficult for the agency to monitor the development of critical 

skills and competencies in its employees, have accurate and reliable data 

to document the total costs of training efforts, or assess how training and 

development efforts contribute to improved performance and greater 

capacity to meet new and emerging challenges. 

FEMA Does Not Have 

Business Continuity Plans 

for Its Day-to-Day 

Operations 

FEMA operates much like a volunteer fire department in that all FEMA 

employees are expected to be on call during disaster response and no 

FEMA personnel are exclusively assigned to its day-to-day operations. 

While the volunteer fire department model may work in addressing a 

short-term incident, FEMA staff can be deployed for weeks or months. 

This makes planning for business continuity management (e.g., identifying 

which day-to-day operations must continue and how they will be staffed) a 

paramount concern.26 However, FEMA does not have guidelines on what 

constitutes a mission-critical position and has not conducted an 

assessment of what minimum level of support is necessary. As a result, it 

has no guidelines for which personnel either cannot be deployed or can be

deployed only if sufficiently trained backups are available—although DHS 

Office of the Inspector General staff said that payroll and facilities support 

have been left intact during disasters. FEMA officials told us that 

nondisaster programs are maintained on an ad hoc basis when permanent 

staff are deployed and the agency does not have provisions for continuing

programs when program managers are called into response duties. 

Some FEMA managers told us that the lack of such planning has 

negatively affected day-to-day operations during disaster response efforts. 

An official from one program branch told us that the branch has had as 

 26The goal of business continuity management is to keep operations running in the event of 

a disruption to normal business processes. As a program, it includes activities such as 

planning, risk analysis, providing backup facilities, succession plans, and impact 

assessments.

Page 22 GAO-07-139 Budget Issues
few as one or two staff members left to run it when 80 percent were called 

to work on disaster operations in either the field or headquarters. To 

provide a contingency backup for one program, FEMA established 

contractor-supported Regional Management Centers in each region. 

Officials explained they could not have a $50 million program shut down 

every time a disaster occurs. However, the existence of these centers does

not prevent the slowing down of operations during a disaster since there 

are functions contractors cannot perform. Only federal employees can set 

policy, sign contracts, or disburse grant funding. Without an understanding 

of who holds a mission-critical position for day-to-day operations and an 

assessment of what minimum level of support is necessary, it is unlikely 

that managers or employees can be held accountable for day-to-day 

operations and the probability of failure in providing necessary support for 

the disaster-relief mission goes up. 

Whether FEMA is a part of DHS or an independent entity, more attention 

needs to be paid to its day-to-day operations. This is an organization that 

not only has to deal with the repercussions of the prior year’s hurricane 

season and the cumulative workload of other earlier disasters while 

preparing for future disasters, but also during the period of our review had

been reorganized four times in 3 years, assumed significant responsibilities 

for preparedness activities that were subsequently transferred out, and 

inherited an assortment of programs from other agencies, some of which 

were gone within a year. In this environment, anything seen as

“nondisaster” was likely to get less attention. Since most of FEMA’s day-today operations—even those necessary to support disaster relief 

activities—are considered “nondisaster” by FEMA, day-to-day operations

were likely to suffer. Without a vision of what day-to-day operations 

should be and how they contribute to achieving the disaster-related 

mission, FEMA is more likely to continue to react rather than manage its 

way through future changes. Even FEMA staff’s strong sense of mission, 

which was apparent in our interviews, is no substitute for a plan and 

strategies for action. 

Conclusions 

FEMA’s piecemeal efforts to address the management challenges we 

highlighted are unlikely to produce desired results. These challenges are 

not new to FEMA and are not just the result of becoming a component of 

DHS. In 2001, FEMA was scored as unsatisfactory in all five areas of the 

President’s Management Agenda. To make progress, FEMA is going to 

have to change the way it does business. In this report we have suggested 

some first steps. They include developing meaningful management reports 

that allow FEMA to consider tradeoffs in resources for day-to-day 

Page 23 GAO-07-139 Budget Issues
operations, a strategic workforce plan that identifies skills needed now 

and informs hiring in the future, training guidelines and requirements 

tailored to critical mission needs, a clear business continuity plan for 

when staff are deployed, and systems that can help FEMA operate more 

efficiently and effectively. Implementing such changes will not only 

improve the information available for planning and management, but they 

will also provide greater accountability to Congress and the public. 

We recommend that the Secretary of Homeland Security direct the 

Director of FEMA to take the following actions: 

• Define what resources—staff and funding—are associated with FEMA’s 

day-to-day operations, link the investment of these resources to 

achievement of its disaster relief mission, and collect sufficient data in a 

way that enables managers to monitor progress and support resource 

priorities for these operations. 

Recommendations for 

Executive Action 

• In responding to the strategic workforce planning requirements included 

in the Post-Katrina Emergency Reform Act of 2006, Pub. L. No. 109-295

Title VI, apply the key principles of strategic workforce planning discussed 

in our report on such planning efforts (GAO-04-39), including 

• establishing strategic direction; 

• assessing the number of employees and critical skills that FEMA needs; 

• conducting succession planning to identify, develop, and select people 

to ensure an ongoing supply of successors; and 

• establishing training and development requirements and tracking 

systems to ensure that staff have the necessary training to carry out 

their day-to-day and disaster response functions.

• Develop business continuity plans for the day-to-day operations to ensure 

that critical program functions are maintained at a sufficient level when 

PFT employees are called to respond to a disaster. These plans should 

include clear guidelines on who holds a mission-critical position at 

headquarters and, therefore, either cannot be deployed for disaster-relief 

efforts or needs to have alternates designated to provide backup in their 

absence. FEMA should consider formally cross-training and preparing 

ancillary workforce members (e.g., contractors, employees in other job 

titles/descriptions, retirees) to maintain daily functionality in the presence 

of anticipated staffing shortages when a disaster strikes. 

Page 24 GAO-07-139 Budget Issues
• In carrying out these recommendations, FEMA should work with Congress 

to ensure that FEMA has provided Congress with the information 

necessary to conduct its oversight role. Specifically, FEMA should work 

with Congress to ensure that its financial information is sufficient for use 

in the following oversight activities: 

• facilitating an understanding of the agency’s operations; 

• informing the development, analysis, and debate of alternative policies; 

• supporting a historical perspective from which to evaluate future plans, 

budgets, and spending proposals; 

• assessing FEMA’s accountability for actual results when compared to 

budgets; and

• evaluating program costs. 

We requested comments on a draft of this report from the Secretary of 

Homeland Security. DHS did not provide formal comments on the draft 

report but did provide technical comments, which we incorporated where 

appropriate. OMB staff also provided technical comments on an excerpt of

the draft that referred to our discussion with OMB; we incorporated these

where appropriate. 

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

Security, the Director of OMB, the Director of FEMA, and other interested

parties. We will also make copies available to others upon request. In 

addition, the report will be available at no charge on GAO’s Web site at 

http://www.gao.gov. 

Agency Comments 

Page 25 GAO-07-139 Budget Issues
If you or your staff have any questions about this report please contact me

at (202) 512-9142 or irvings@gao.gov. Contact points for our Offices of 

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

of this report. GAO staff making key contributions to this report are listed 

in appendix II. 

Susan J. Irving 

Director, Federal Budget Issues 

Page 26 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-to- Appendix I: Analysis of Resources for Day-to- Day Operations

Day Operations 

Given its mission, much of what the Federal Emergency Management 

Agency (FEMA) does is defined by disasters, and FEMA has largely 

divided its operating world into two categories—disaster and nondisaster. 

In this division, much of what FEMA does on a day-to-day basis is 

categorized as “nondisaster.” This masks the fact that many of these 

operations are essential to preparing the agency to carry out its disaster 

relief mission. When asked by the Department of Homeland Security 

(DHS) Office of the Inspector General and later by GAO to identify the 

resources associated with its operations, FEMA divided its annual funding

and full-time equivalent (FTE) data into three categories—operating 

expenses, other FEMA programs, and Disaster Relief Fund (DRF).1

 The 

FEMA Budget Office presented the summary data as: (1) “FEMA without 

DRF” (the sum of operating expenses and other FEMA programs), (2) 

DRF, and (3) total. Because DRF funding is primarily available only in

response to a specific, presidentially declared disaster, we attempted to 

use the “FEMA without DRF”—or “non-DRF”—data as a proxy for day-today operations. However, the non-DRF presents an inaccurate picture of 

FEMA’s day-to-day operations. Using this data skews FEMA’s resource 

trends, because resources not associated directly with its operations, such 

as grants, cannot be disaggregated and resources from the DRF that are 

associated with its day-to-day operations are not included. 

Figure 2 below illustrates this point. If the non-DRF data are used as a 

measure of day-to-day operations, it appears that FEMA’s funding for 

these operations rose significantly from fiscal year 2002 to 2003 and 

declined sharply from fiscal year 2003 to 2004—with the most dramatic 

decline occurring in operating expenses. Over this same period, as shown 

in figure 3, corresponding FTEs remained fairly level. 

 1

From fiscal year 2001 to fiscal year 2003, FEMA’s operating expenses consisted of funding 

from its Salaries and Expenses account and its Emergency Management Planning and

Assistance account. In fiscal years 2004 and 2005, funding from the following accounts

made up FEMA’s operating expenses: Office of the Under Secretary, Preparedness 

Mitigation Response and Recovery, and Administrative and Regional Operations. In fiscal 

year 2005, the following accounts composed FEMA’s “other programs”: Pre-Disaster 

Mitigation, Flood Mitigation Fund, National Flood Insurance Fund, Emergency Food and 

Shelter, Disaster Assistance Direct Loan Program Account, Public Health Programs, and 

Flood Map Modernization. FEMA also reported data on its supplemental funding in two

categories—DRF and Other. FEMA received supplemental DRF funding every year of our 

review, while other supplemental funding was provided only in fiscal years 2002, 2003, and 

2005. 

Page 27 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-toDay Operations

Figure 2: Trends in Annual Funding for FEMA’s Non-DRF Operations, Fiscal Years 

2001–2005 

Note: FEMA’s summary data for “FEMA without DRF” did not include other supplemental funding or

funding for programs that were transferred out of FEMA at any point over this period. However, we 

added funding for these items back in to their appropriate category to present a more accurate picture 

of FEMA’s actual funding for “operating expenses” and “other FEMA programs” over this time period. 

0

500

1,000

1,500

2,000

2,500

3,000

2001 2002 2003 2004 2005

Dollars in millions

Fiscal years

Other programs

Operating expenses

Source: GAO presentation of FEMA data.

Page 28 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-toDay Operations

Figure 3: Trends in FTEs for FEMA’s Non-DRF Operations, Fiscal Years 2001–2005 

Note: FEMA’s summary data did not include FTEs from fiscal years 2001 to 2003 for two programs

that were transferred out of FEMA in fiscal year 2003—the Inspector General and the Working Capital 

Fund. However, we added the FTE for these programs back in to the figure to present a more 

accurate picture of FEMA’s actual FTEs for “operating expenses” and “other FEMA programs” over 

this time period. 

The non-DRF funding category presents an inaccurate picture of resources 

for FEMA’s day-to-day operations for two reasons. First, it includes 

funding, such as grants, that is not available to FEMA for its day-to-day 

operations because FEMA provides it to states and local governments. 

Much of the fluctuation seen in figure 2 can actually be attributed to 

changes in grant programs and associated funding that occurred through 

organizational changes—rather than funding increases and decreases for 

the same set of activities. For example, when FEMA’s Fire Grants program 

grew by $595 million between fiscal years 2002 and 2003, and then left 

FEMA by fiscal year 2004, under FEMA’s categorization this appeared as 

an increase in operational funds in 2003 and a decrease in 2004. In fact, 

those resources were passed on in the form of grants, mostly to state and 

local governments, and, except for the administration of the grants, should 

have had little—certainly much less than shown—effect on FEMA’s 

resource trends for its day-to-day operations. Second, this presentation 

0

500

1,000

1,500

2,000

2,500

3,000

2001 2002 2003 2004 2005

Actual FTEs

Fiscal years

FTEs for other programs

FTEs for operating expenses

Source: GAO presentation of FEMA data.

Page 29 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-toDay Operations

leaves out a key component of FEMA’s day-to-day operations—the 

Disaster Support Activity (DSA). Although part of the DRF, the DSA 

provides funding for ongoing capabilities, such as training, that are not 

readily attributable to any one specific declared disaster.2

 FEMA itself has 

deemed these support expenditures essential to providing (1) timely 

disaster response, (2) responsive customer service, and (3) cost-effective 

program management and delivery. Since the non-DRF funding category 

includes grant resources, which are not spent by FEMA, but excludes 

funding for DSA, which clearly supports day-to-day functions, this 

category does not present an accurate picture of FEMA’s day-to-day 

resources. 

If FEMA were to create a definition of day-to-day operations that 

addresses these issues, changes in FEMA’s resource trends might appear 

less dramatic. In figure 4 below, we used the non-DRF data provided by

FEMA, added funding for DSA, and excluded funding for readily 

identifiable grants (i.e., those that are authorized in separate appropriation 

accounts). We were unable to back out grants that were in appropriations 

accounts that included both grant and other funds, because neither 

FEMA’s Budget Office nor the program offices responsible for grants 

administration were able to tell us how much funding was allocated for 

grants separately from other operating expense funding provided in the 

same account. In these cases, rather than demonstrating that 

consideration had been given to how much of the resources available for 

day-to-day operations should be used instead to fund grants, FEMA could

only report on how much had been obligated for grants, subsidies, and 

other contributions. 

Using this definition, funding for FEMA’s operating expenses and DSA 

appears fairly constant, while funding for FEMA’s other programs rose in 

fiscal years 2002 and 2003 and declined in fiscal year 2005. During this 

same period, as shown in figure 5, FEMA’s FTEs for those day-to-day 

operations also remained relatively constant. 

 2

The following activities are part of disaster support: Fixed Processing and Storage;

Response Readiness; Recovery and Mitigation; Information Systems; Training; Disaster 

Support Operations; Disaster Dependent Management. 

Page 30 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-toDay Operations

Figure 4: Estimate of Funding for FEMA’s Day-to-Day Operations, Fiscal Years 

2001–2005 

0

200

400

600

800

1,000

1,200

1,400

2001 2002 2003 2004 2005

Dollars in millions

Fiscal years

Disaster support activity

Other programs

Operating expenses

Source: GAO analysis of FEMA data.

Page 31 GAO-07-139 Budget Issues
Appendix I: Analysis of Resources for Day-toDay Operations

Figure 5: Estimate of Actual FTEs for FEMA’s Day-to-Day Operations, Fiscal Years 

2001–2005 

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2001 2002 2003 2004 2005

Actual FTEs

Fiscal years

FTEs for disaster support

FTEs for other programs

FTEs for operating expenses

Source: GAO analysis of FEMA data.

Page 32 GAO-07-139 Budget Issues
Appendix I: Analys

Day Oper

is of Resources for Day-toations

Page 33 GAO-07-139

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact Susan J. Irving, (202) 512-9142 or irvings@gao.gov

In addition to the contact named above, Denise Fantone, Tiffany Tanner, 

Amy Rosewarne, Brian Friedman, and Heather Hill made significant 

contributions to this report. Thomas Beall, Carlos Diz, William Doherty, 

Kevin Jackson, Hannah Laufe, John Mingus, and Gregory Wilmoth also 

provided key assistance.

Budget Issues

Acknowledgments 

(450459) 
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