January 25, 2013 Report Number 13-10

Performance Audit Report

The Small Business Administration Did Not Effectively Assess Disaster Assistance

Staffing Requirements, Availability, and Readiness
U.S. Small Business Administration

Office of Inspector General

Washington, D.C. 20416

REPORT TRANSMITTAL

REPORT NO. 13-10

DATE: January 25, 2013

TO: James E. Rivera, Associate Administrator, Office of Disaster Assistance

Steven G. Smith, Director, Office of Disaster Planning

SUBJECT: The Small Business Administration Did Not Effectively Assess Disaster Assistance 

Staffing Requirements, Availability, and Readiness 

This report presents the results of our audit on the Small Business Administration’s staffing and 

mobilization activities. Specifically, this report addresses the SBA’s: (1) assessment of human capital 

needs during the biennial simulation exercise, and (2) ability to accurately identify the total number of 

reserve staff available to respond to disasters. We have incorporated the formal comments from the 

Office of Disaster Assistance (ODA) and the Office of Disaster Planning (ODP) into this report. 

Please provide your response to this report for each recommendation on the attached SBA Forms 1824, 

Recommendation Action Sheet, by February 24, 2013.

Consistent with OMB Circular A-50, your response should include the corrective action(s) taken or 

planned for each recommendation and the target date(s) for completion. If you disagree with the 

recommendations, please fully explain the reasons for disagreement. Please include the legal basis for 

disagreement based on interpretation of law, regulations, or the authority of officials to take or not to 

take action. You may also propose alternative actions to those recommended that you believe would 

better address the issues presented in this report. 

In order to fulfill our responsibility under the Inspector General Act, we are providing copies of our 

report to the appropriate congressional committees responsible for oversight of the Small Business 

Administration. We will also post this report on the Office of Inspector General website for public 

dissemination.

We appreciate the courtesies and cooperation of the ODA and the ODP during this this audit. If you 

have any questions concerning this report, please call me at (202) 205-7390, or Craig Hickok, Director, 

Disaster Assistance Audit Group at (817) 684-5341.

***

/s/

John K. Needham

Assistant Inspector General for Auditing
The Small Business Administration Did Not 

Effectively Assess Disaster Assistance Staffing Requirements, 

Availability, and Readiness

What OIG Audited

We audited the SBA disaster assistance program’s 

staffing and mobilization activities to determine its

readiness to respond to a large scale event. 

Specifically, we examined whether the SBA 

maintained a sufficient workforce to respond to a 

catastrophic event equivalent to the 2005 Gulf 

Coast Hurricanes. We reviewed the Agency’s 

planning and execution of its staffing strategies, 

evaluated the 2008 and 2010 Senior Leadership 

Seminar After Action Reports, interviewed officials 

from the Office of Disaster Assistance (ODA) and 

Office of Disaster Planning (ODP), and analyzed 

personnel rosters. 

What OIG Found

The Agency’s biennial simulation exercise did not 

sufficiently assess whether the SBA could activate 

the human capital necessary to respond to a 

disaster larger than the 2005 Gulf Hurricanes. 

Additionally, the Agency lacked a formal process to 

monitor or verify implementation of simulation 

exercise recommendations. Further, the Agency did 

not have a formalized process to maintain an 

accurate accounting of the reserve workforce and 

their availability. 

If another disaster of a magnitude similar to the 

2005 Gulf Hurricanes occurs, the Agency could 

encounter challenges in meeting staffing needs to 

achieve their mission. Specifically, the Agency 

would need to hire and train approximately 2,400 

new employees to respond adequately to a major 

catastrophic event. During the Gulf Hurricanes, 

training and supervising a large influx of temporary 

staff proved very difficult for the SBA.

OIG Recommendations and Agency Comments

The OIG recommended a total of four actions. We 

addressed two actions to the Director of ODP: 

1. Develop a plan that ensures the biennial 

simulation exercise includes an assessment of 

human capital necessary to respond to the level 

of disaster selected for the simulation exercise 

scenario.

2. Implement a corrective action plan to address 

deficiencies identified during the biennial 

simulations. Corrective actions should be 

assigned to responsible parties and have due 

dates. They should also be tracked during 

implementation and then validated during 

subsequent exercises. 

The remaining two actions were addressed to the 

Associate Administrator for Disaster Assistance: 

3. Develop a process that accurately identifies the 

total number of reserve staff available for 

mobilization and specifies the frequency of such 

an analysis.

4. Develop written procedures that define ODA’s 

process for determining the number of reserve 

staff available to respond to disasters.

On January 4, 2013, management submitted formal 

comments. Management concurred with our 

findings and all four recommendations.

Actions Taken

As of report issuance, the ODA has implemented a 

process that identifies the staff available for 

mobilization and has developed written procedures 

for determining the number of reserve staff 

available for disaster response. In addition, the 

ODP and other offices are presently executing a 

plan that incorporates a detailed improvement plan 

with responsibilities and due dates. 
Table of Contents

Introduction ..................................................................................................................................................1

Background ...............................................................................................................................................1

The Small Business Disaster Response and Loan Improvements Act of 2008..........................................2

Biennial Simulation Exercises and SBA’s Disaster Recovery Plans............................................................2

Results...........................................................................................................................................................3

Finding: The SBA’s Biennial Simulation Exercise Did Not Assess Human Capital Needs ...........................3

Post-Exercise Evaluation...........................................................................................................................4

Corrective Action Plans.........................................................................................................................4

Office of Disaster Assistance Lacked a Process for Identifying Available Workforce ...............................5

Availability Testing ................................................................................................................................5

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

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

Agency Comments and Office of Inspector General Response ....................................................................8

Appendix I: Scope and Methodology.........................................................................................................10

Prior Coverage.........................................................................................................................................11

Appendix II: Agency Comments.................................................................................................................12
1

Introduction

Objectives

The objective of this audit was to determine if the Small Business Administration (the SBA or the 

Agency) maintained a sufficient reserve workforce to respond to a catastrophic event equivalent 

to the 2005 Gulf Coast Hurricanes. The focus of this audit was limited to SBA’s staffing and 

mobilization readiness. In meeting our audit objective we reviewed the Agency’s planning and 

execution of its staffing strategies, evaluated the 2008 and 2010 Senior Leadership Seminar 

After Action Reports, interviewed officials from the Office of Disaster Assistance (ODA) and 

Office of Disaster Planning (ODP), and analyzed personnel rosters. 

Background

The Small Business Act permits the Agency to maintain a core staff of at least 800 full-time 

equivalent (FTE) employees to provide assistance following hurricanes and other disasters. 

In addition to FTEs, the Agency maintains a list of reserve staff that could be activated, 

if available, when a disaster occurs. However, immediately following the 2005 Gulf Coast 

Hurricanes, the SBA faced significant challenges in establishing a workforce to process the 

unprecedented demand in disaster loan applications. In the aftermath of the 2005 Gulf Coast 

Hurricanes, the ODA received over 400,000 disaster loan applications. At the time that the 

hurricanes occurred, the ODA employed approximately 800 people. 

By January 2006, the Agency had increased the size of its disaster loan staff to more than 4,300 

primarily through the hiring of temporary employees. Even with the increased staffing level, 

hundreds of thousands of loans were not disbursed within established timelines. Although 

delays in processing and disbursement were not due solely to staffing shortages, the Agency 

experienced significant backlogs in disaster loan application processing and disbursement. 

Specifically, in the nine months after the Gulf Coast Hurricanes, the SBA approved more than 

148,700 disaster loans totaling $9.7 billion to individuals and businesses that suffered losses. 

However, as of May 27, 2006, the SBA had only disbursed $1.4 billion or 14 percent of the loans 

approved.

In February 2007, the Government Accountability Office (GAO) reported that the SBA faced 

staffing challenges during the 2005 Gulf Coast Hurricanes.

1

 According to the GAO report, the 

Agency had not taken steps to ensure the availability of additional trained and experienced 

staff. Specifically, the SBA faced difficulties in establishing a workforce, training new hires, and 

managing thousands of temporary employees.

Also during February 2007, the Department of Homeland Security (DHS) developed the Exercise 

and Evaluation Program (EEP). This program provides common exercise policy and program 

guidance that constitutes the national standard for disaster exercises. According to the EEP, 

corrective actions or recommendations resulting from the simulation exercise should be 

 

1 GAO Report 07-114, Additional Steps Needed to Enhance Agency Preparedness for Future Disasters, issued 

February 14, 2007.
2

assigned, with due dates, to responsible parties. The corrective actions should also be tracked 

to implementation and validated during subsequent exercises. In January 2008, the U.S. 

Department of Homeland Security issued an updated National Response Framework (NRF) as 

part of its National Strategy to prepare and provide for a unified national response to disasters. 

The NRF states that government, at all levels, has a responsibility to develop detailed, robust, 

all-hazards response plans. Additionally, the NRF specifies that simulations should test plans, 

identify opportunities for improvement, and contain a mechanism for incorporating corrective 

actions.

The Small Business Disaster Response and Loan Improvements Act of 2008

In June 2008, Congress enacted the Small Business Disaster Response and Loan Improvements 

Act of 2008 (the Act). The Act placed new requirements on the SBA to better ensure it was 

prepared to respond to catastrophic disasters, which included a requirement for the SBA to 

conduct a disaster simulation exercise at least once every two years. The Act further mandated 

that the Agency create a position, independent of the Office of Disaster Assistance, to plan and 

direct the biennial disaster simulation exercise. In response, the SBA created the Office of 

Disaster Planning, which reports directly to the SBA Administrator, and is responsible for 

coordinating with the ODA to prepare for the biennial simulation exercises.

Biennial Simulation Exercises and SBA’s Disaster Recovery Plans

On April 7, 2010, the Agency conducted the Senior Leader’s Seminar and Tabletop Exercise to 

test the Disaster Recovery Plan. According to the After Action Report, the 2010 biennial 

simulation exercise was designed to test the SBA’s readiness to respond to disasters from 

multiple perspectives. The Agency asserted in its last three Disaster Recovery Plans, issued 

November 15, 2009, July 31, 2010, and June 2, 2011 that it was “able to respond to catastrophes 

even larger than the 2005 Gulf Coast Hurricanes.” Although the 2010 After Action Report did 

not adequately address human capital needs, it found the “SBA prepared for its disaster 

mission.”

During May 2011, the ODA issued Staffing Strategy Guidelines (Guidelines) designed to provide 

a prepared and ready staff that could be immediately activated and deployed. The ODA 

estimated that the transition to this new staffing strategy would take place over several years. 

According to the Guidelines, each ODA center, including the Processing and Disbursement 

Center, Customer Service Center, Disaster Verification Center and the two Field Operations 

Centers, would maintain its own disaster reserve list, as required by the Guidelines. 

In a November 2011 report,

2

the GAO credited the SBA with making continued progress to 

reform the Disaster Loan Program. Specifically, the GAO favorably reported that the SBA had 

created an online loan application, increased the capacity of its Disaster Credit Management 

System, and developed and updated a Disaster Recovery Plan. Further, the Agency had taken 

steps to improve the disaster loan application process, develop region-specific marketing and 

 

2

GAO Report 12-253T, Progress Continues in Addressing Reforms to the Disaster Loan Program, issued November 

30, 2011.
3

outreach, report annually to Congress, and regularly issue Disaster Recovery Plans. However, 

we determined the Agency still faced challenges in ensuring the optimum staffing level was 

available and ready to respond to a catastrophic event equivalent to the 2005 Gulf Coast 

Hurricanes

Nature of Limited or Omitted Information

On March 14, 2012, the Agency held its biennial Senior Leadership Seminar. The After Action 

Report resulting from this exercise had not been issued prior to the completion of the OIG’s 

review; therefore, an analysis of the 2012 exercise was not included in this audit report.

Review of Internal Controls

To assess the internal controls relevant to our audit objective, we reviewed the SBA's policies 

and procedures regarding the mobilization of staff during disasters. We conducted this audit 

from May 2011 to March 2012 in accordance with Generally Accepted Government Auditing 

Standards. Those standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and conclusions based on 

our audit objectives. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. On March 15, 2012, we briefed 

management on the results of our audit work. 

Results

Finding: The SBA’s Biennial Simulation Exercise Did Not Assess

Human Capital Needs

The Agency’s 2010 biennial simulation exercise, designed by the ODP, did not sufficiently assess 

whether the SBA could activate or acquire the human capital necessary to respond to a disaster 

larger than the 2005 Gulf Hurricanes. This occurred because the agency did not create a 

corrective action plan to implement recommendations from prior simulation exercises, nor did it 

have the processes or procedures to identify the number of staff available to respond to 

disasters. To identify the total number of reserve staff needed, the SBA’s simulation exercise 

should have included: (1) the creation of a scenario of a catastrophe larger than that 

experienced in 2005, (2) determining the anticipated number of disaster loan applications, (3) 

determining the staff necessary to process and disburse the expected disaster loans, and (4) 

determining the amount of staff on board and available from the reserve staff. 

Specifically, the SBA’s 2010 Biennial Simulation Exercise did not sufficiently assess or report 

whether the SBA could activate or acquire the human capital resources necessary to respond to 

a disaster larger than the 2005 Gulf Hurricanes. We found little evidence that the 2010 

simulation exercise performed any of the necessary staffing analyses as described above. 
4

The Agency was unable to provide this data that indicated the number of loan applications 

anticipated for the simulation exercise. Therefore, we were unable to verify that the scenario 

used in the 2010 simulation exercise represented a catastrophe larger than experienced during 

the 2005 Gulf Coast Hurricanes. Since the simulation exercise did not address the number of 

staff required, the exercise did not conclusively demonstrate that the Agency could respond to a 

disaster even larger than the Gulf Coast Hurricanes.

The After Action Report also did not address whether or not the Agency might have a staffing 

shortfall to respond to the simulation exercise scenario. The After Action Report noted that the 

ODA would be able to hire the desired number of staff when deemed appropriate and necessary 

to respond to a large disaster. According to SBA’s report, the SBA demonstrated this capability

for previous disasters when it hired 3,500 employees over a four-month period. However, as 

noted in our September 2006 Audit Report 6-29, the SBA was still facing significant delays in 

disbursing 2005 disaster loans in May 2006. 

Post-Exercise Evaluation 

To assess whether the SBA could activate or acquire the human capital resources necessary to 

respond to a disaster larger than the 2005 Gulf Hurricanes, the simulation exercise should have 

assessed the SBA’s capability to manage, effectively, a significant number of new staff. 

This would include assessing the Agency’s ability to train and supervise a large number of 

temporary employees. According to the EEP, the Agency should conduct a formal post-exercise 

evaluation to: 

identify strengths and areas for improvement in the Agency’s preparedness, as observed 

during the exercise;

develop recommendations related to areas for improvement to help develop corrective 

actions; and, 

provide the basis for conducting improvement planning following the formal evaluation. 

Corrective Action Plans

According to the standards set by DHS, corrective actions identified in the evaluation phase 

should be assigned, with due dates, to responsible parties during the improvement planning 

phase. The Agency should then track the corrective actions to implementation, and validate 

them during subsequent exercises. Based upon the guidance specified in the EEP, the Agency’s 

2010 biennial simulation exercise should also have addressed deficiencies noted in the 2008 

biennial simulation. Although the 2008 simulation identified human capital deficiencies and 

provided recommendations to correct them, our review found that the SBA did not have a 

corrective action plan to implement the recommendations. For example, the After Action 

Report for the 2008 simulation exercise recommended the Agency refine modeling so that the 

SBA could accurately project impacts of a disaster in order to quickly request funding. The 2008 

After Action Report also recommended ongoing monitoring and a complete test of the reserve 

list on a regular basis. Due to the lack of a formalized method of addressing deficiencies, 

however, the Agency did not assign the recommended actions to responsible parties with due 

dates and did not take corrective action. 
5

Office of Disaster Assistance Lacked a Process for Identifying Available Workforce

The Office of Disaster Planning relied upon staffing estimates provided by the ODA to prepare 

for biennial simulation exercises. However, we found that the ODA did not have a process or 

written procedures to identify the number of reserve staff available to respond to disasters. 

The ODA did not: (1) routinely test the availability of the reserve workforce; (2) obtain the 

number of available reserve staff from lists maintained at its centers; or (3) determine the total 

number of individuals who would be available to report for duty in the event of a disaster. 

As part of pre-disaster preparation, the ODA has scalability models to project estimated staffing 

levels needed to respond to disasters of varying magnitudes. The scalability models the ODA 

provided to us indicated that the Agency would require 4,722 employees to timely and 

effectively process a number of loan applications comparable to those received during the 2005 

Gulf Coast Hurricanes. We calculated that as of October 22, 2011, the Agency could provide 

approximately 2,300 employees to respond to a disaster of that same magnitude. To reach the 

level of 4,722 employees as projected by the staffing model, the Agency would be required to 

hire approximately 2,400 additional employees. Ensuring the training and supervision of this 

large influx of temporary staff previously proved very difficult, as GAO indicated in its 

February 14, 2007 report.

3

On May 31, 2011, the ODA issued Staffing Strategy Guidelines, which required SBA 

Headquarters to maintain a consolidated list of staff reserves. We obtained the consolidated list 

of 2,685 personnel from the ODA; however, not all of the personnel on this list would actually 

be available to assist in the event of a disaster. The ODA did not identify the total personnel 

available, or the percentage of personnel available to support disasters of varying magnitudes. 

We determined, however, that approximately 2,300 reserve staff could be available to respond. 

Absent the total number of personnel actually available to respond in the event of a disaster, 

the SBA could not determine its own capability of providing timely and effective disaster 

assistance. 

Availability Testing

The ODA’s Staffing Strategy Guidelines also indicated that each Disaster Center is responsible for 

developing its own plan for managing its reserve pool of employees. We obtained the records 

of each center’s availability test results for 2011, only, as the ODA could not provide us with 

those conducted prior to 2011. Although the results of each center’s 2011 availability tests 

indicated the number of staff available, they did not indicate whether the number of available 

reserves was adequate, or whether the center needed to acquire additional reserves. 

This occurred because the Guidelines did not specify how the centers would determine whether 

it had sufficient available reserves. 

 

3

GAO Report 07-114, Additional Steps Needed to Enhance Agency Preparedness for Future Disasters, issued 

February 14, 2007.
6

Additionally, there is no requirement in the Staffing Strategy Guidelines that each center should 

ascertain whether the reserve personnel are permanently unavailable, or unavailable at the 

time of contact. Therefore, some personnel could remain on the reserve list that should not, 

leading the ODA to believe that it has a larger pool of reserves than it actually has.

We also determined that the centers did not test reserve workforce availability frequently 

enough. While most of the operations centers contacted personnel on its reserve list at least 

once during 2011, the ODA was unable to provide records documenting availability testing 

conducted prior to 2011. Since the Staffing Strategy Guidelines state that personnel should be 

removed from the reserve list when they have indicated unavailability on three consecutive 

occasions, current annual testing practices could allow unavailable personnel to remain on the 

list for three full years before they are removed. If the operations centers do not conduct 

availability testing on a more frequent basis, the accuracy of the reserve workforce availability 

could be questionable.

The After Action Report noted that during the 2008 simulation, the ODA based the number of 

reserve workforce solely on projected numbers, and recommended the ongoing monitoring of 

the reserve list. However, due to the lack of a formalized method of addressing deficiencies, the 

Agency did not take corrective actions by assigning them to responsible parties, with due dates, 

tracked to implementation, and then validated during subsequent exercises. After the 2010 

simulation, however, the ODP tracked the key analysis from the report and immediately began 

incorporating changes. As a result of this audit, for example, the ODA revamped the Reserve 

Readiness Assessment in February of 2012. Additionally, the ODA subsequently conducted two 

successful Reserve Readiness Assessments.

Conclusion

Based upon current staffing and reserve workforce levels, should another disaster of a 

magnitude similar to the 2005 Gulf Hurricanes occur, the SBA is likely to face staffing challenges. 

The Agency’s staffing models indicated it would be required to hire and train approximately 

2,400 new employees to respond adequately to an event similar to the 2005 Gulf Coast 

Hurricanes. 

In addition, we believe the Agency also did not have a formalized process to maintain an 

accurate accounting of the reserve workforce and their availability. Further, the Agency lacked a 

formal process to monitor or verify implementation of simulation exercise recommendations. 

Due to these limitations, the SBA could have trouble in providing timely and quality assistance to 

disaster victims during a catastrophe similar to the 2005 Gulf Coast Hurricanes. 

During the audit, management acknowledged that its process for determining availability of 

reserve staff was not well-documented. As a result of this audit, management took steps to 

improve its method for assessing reserve workforce availability and for recording the results of 

these assessments. We believe that continued management attention concerning staffing and 

mobilization is required. 
7

Recommendations

We recommend the Director, ODP:

1. Develop a plan that ensures the biennial simulation exercise includes an assessment of 

human capital necessary to respond to the level of disaster selected for the simulation 

exercise scenario. Specifically, coordinate with the ODA to:

a. Identify the number of personnel necessary to respond to the scenario;

b. Determine the personnel available; 

c. Identify the number of new hires required to support this scenario, and

d. Determine the feasibility of hiring, training, and supervising the required 

number of new hires.

2. Implement a corrective action plan to address deficiencies identified during the biennial 

simulations. Corrective actions should be assigned to responsible parties and have due 

dates. They should also be tracked during implementation and then validated during 

subsequent exercises.

We recommend the Associate Administrator for Disaster Assistance:

3. Develop a process that accurately identifies the total number of reserve staff available 

for mobilization and specifies the frequency of such an analysis.

4. Develop written procedures that define ODA’s process for determining the number of 

reserve staff available to respond to disasters.
8

Agency Comments and Office of Inspector General Response

On December 5, 2012, we provided a draft of this report to the SBA’s Office of Disaster 

Assistance (ODA) and the Office of Disaster Planning (ODP) for comment. On January 4, 2013, 

the Agency submitted formal comments, which are included in their entirety in Appendix II. 

The Agency provided comments on each of the four recommended actions. The ODA and ODP 

concurred with our findings and recommendations. Additionally, the Agency has implemented 

processes and procedures to improve SBA’s staffing and mobilization activities. We consider 

management’s comments to be responsive to the recommendations. A summary of 

management’s specific comments, followed by our responses are below. 

Recommendation 1 – We recommend the Director of the Office of Disaster Planning develop a 

plan that ensures the biennial simulation exercise includes an assessment of human capital 

necessary to respond to the level of disaster selected for the simulation exercise scenario. 

Specifically, coordinate with the ODA to:

a. Identify the number of personnel necessary to respond to the scenario;

b. Determine the personnel available; 

c. Identify the number of new hires required to support this scenario, and

d. Determine the feasibility of hiring, training, and supervising the required 

number of new hires.

Agency Comments

Management concurred with this recommendation. The Director stated that through the ODA 

and ODP action, human capital requirements for a scenario even more demanding than the 

2005 Gulf hurricanes were addressed as part of the March 2012 Senior Leadership Seminar.

OIG Response

We consider management’s comments to be responsive to this recommendation. 

Recommendation 2 –We recommend that the Director of the Office of Disaster Planning 

implement a corrective action plan to address deficiencies identified during the biennial 

simulations. Corrective actions should be assigned to responsible parties and have due dates. 

They should also be tracked during implementation and then validated during subsequent 

exercises.

Agency Comments

Management concurred with this recommendation. The Director stated the after action 

reporting for the March 2012 exercise incorporated a detailed improvement plan with 

responsibilities and due dates. This plan was coordinated through applicable program offices 

and approved by the Administrator. The ODP and other offices are presently executing this 

plan. 
9

OIG Response

We consider management’s comments to be responsive to this recommendation.

Recommendation 3 –We recommend the Associate Administrator for Disaster Assistance 

develop a process that accurately identifies the total number of reserve staff available for 

mobilization and specifies the frequency of such an analysis.

Agency Comments

Management concurred with this recommendation. The Associate Administrator stated that 

the ODA has implemented a process that identifies the staff available for mobilization. This 

process is conducted on a quarterly basis. 

OIG Response

We consider management’s comments to be responsive to this recommendation.

Recommendation 4 – We recommend the Associate Administrator for Disaster Assistance

develop written procedures that define the ODA’s process for determining the number of 

reserve staff available to respond to disasters.

Agency Comments

Management concurred with this recommendation. The Associate Administrator stated that 

the ODA has developed written procedures for determining the number of reserve staff 

available for disaster response.

OIG Response

We consider management’s comments to be responsive to this recommendation. 

Actions Required

Please refer to the transmittal letter for specific instructions on providing your corrective 

action(s) and target dates for completion or reasons for disagreement on the final audit report.
10

Appendix I: Scope and Methodology

The objective of this audit was to determine if the Small Business Administration (the SBA or the 

Agency) maintained a sufficient reserve workforce to respond to a catastrophic event equivalent to the 

2005 Gulf Coast Hurricanes. To address this objective, we reviewed the Agency’s staffing strategy 

guidelines, Disaster Recovery Plans, personnel rosters, biennial simulation After Action Reports, and 

related audit reports. 

We analyzed the SBA’s 2011 Staffing Strategy Guidelines and Disaster Recovery Plans to understand the 

existing guidance provided to staff involved in identifying, testing, and maintaining a sufficient reserve 

workforce. We also interviewed the Office of Disaster Assistance (ODA) officials and human resource 

staff to discuss their process for identifying available reserve workforce. Specifically, we interviewed 

SBA management in headquarters as well as six of ODA’s field offices, which included directors, human 

resource officials, and department managers. Additionally, we interviewed Office of Disaster Planning 

(ODP) officials to determine their role and responsibilities in the disaster planning, as well as the extent 

of their interaction with ODA management.

To evaluate program requirements and guidelines, we reviewed the Small Business Disaster Response 

and Loan Improvements Act of 2008 and the Department of Homeland Security’s Exercise and 

Evaluation Program (EPP). We analyzed the 2008 and 2010 Senior Leadership Seminar After Action 

Reports to understand the simulation scenario as well as the observations and recommendations 

pertinent to ODA’s human capital. To identify previous concerns and recommendations with ODA’s 

preparedness, we examined SBA OIG’s 2006 report on production following 2005 Gulf Coast Hurricanes 

Katrina, Rita, and Wilma. We also examined reports from the Government Accountability Office that 

pertain to establishing and maintaining a sufficient workforce. A detailed list of all of the reports 

reviewed is included in this Appendix, under Prior Coverage.

To determine the number of employees needed to timely and effectively process the amount of loan 

applications comparable to those received during the 2005 Gulf Coast Hurricanes, we obtained the 

ODA’s current scalability model scenarios. We also obtained ODA’s 2011 staffing levels, as well as

records of each center’s availability test results for reservist in 2011 – as the ODA could not provide us 

with those conducted prior to 2011. We compared the ODA’s current scalability model to the number 

of employees available as of October 22, 2011. We determined the difference to be the number of 

additional employees ODA would need to effectively respond to a disaster similar to the 2005 Gulf Coast 

Hurricanes. 

We conducted this audit from May 2011 to March 2012 in accordance with Generally Accepted 

Government Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on 

our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives
11

Appendix I: Scope and Methodology

Prior Coverage

U.S. Small Business Administration, Office of Inspector General Report:

SBA OIG (2006). Audit of Loan Disbursements Following the 2005 Gulf Coast Hurricanes Katrina, Rita, 

and Wilma, Report Number 06-29, September 19, 2006. Retrieved from http://www.sba.gov/office-ofinspector-general/869/365101

U.S. Government Accountability Office Audit Reports:

GAO (2007). Additional Steps Needed to Enhance Agency Preparedness for Future Disasters, Report 

Number GAO-07-114, February 14, 2007. Retrieved from http://www.gao.gov/products/GAO-07-114 

GAO (2011). Progress Continues in Addressing Reforms to the Disaster Loan Program, Report Number 

GAO-12-253T , November 30, 2011. Retrieved from http://www.gao.gov/products/GAO-12-253T
12

Appendix II: Agency Comments

U.S. SMALL BUSINESS ADMINISTRATION

WASHINGTON, D.C. 20416

Date: January 4, 2013

To: John K. Needham

 Assistant Inspector General for Auditing

From: James Rivera

Associate Administrator, Office of Disaster Assistance

From: Steve Smith

Director, Office of Disaster Planning

Subject: OIG Draft Report – The Small Business Administration Did Not Effectively 

Assess Disaster Assistance Staffing Requirements, Availability, and Readiness 

(Project No.11803)

We have reviewed the Draft Report regarding the Small Business Administration staffing and 

mobilization activities. Our response indicates concurrence with your recommendations. Our 

comments are noted below: 

Recommendations and Agency Response: 

Office of Disaster Planning

Recommendation 1: “Develop a plan that ensures the biennial exercise includes an assessment 

of human capital necessary to respond to the level of disaster selected for the simulation exercise 

scenario.”

ODP Response: ODP concurs with this recommendation. Through ODA and ODP action, 

human capital requirements for a scenario even more demanding than the 2005 Gulf hurricanes 

were addressed as part of the March 2012 Senior Leadership Seminar.

Recommendation 2: “Implement a corrective action plan to address deficiencies identified 

during the biennial simulations. Corrective actions should be assigned to responsible parties 

and have due dates. They should also be tracked during implementation and then validated 

during subsequent exercises.”

ODP Response: ODP concurs with this recommendation. After action reporting for the March 

2012 exercise incorporated a detailed improvement plan with responsibilities and due dates. 

This plan was coordinated through applicable program offices and approved by the 

Administrator. ODP and other offices are presently executing this plan.
13

Office of Disaster Assistance

Recommendation 3: “Develop a process that accurately identifies the total number of reserve 

staff available for mobilization and specifies the frequency of such analysis.”

ODA Response: ODA concurs with this recommendation and has implemented a process that 

identifies the staff available for mobilization. This process is conducted on a quarterly basis. 

Recommendation 4: “Develop written procedures that define ODA’s process for determining the 

number of reserve staff available to respond to disasters.

ODA Response: ODA concurs with this recommendation and has developed written procedures 

for determining the number of reserve staff available for disaster response.