Department of Homeland Security
 

Opportunities to Improve FEMA's Public Assistance 


Preliminary Damage Assessment Process
 

OIG-12-79 May 2012
 
Assi~tant Inspector General 

OFFICE OF INSPECfOR GENERAL 

Department of Hom eland Security 

MAY 2 2012 

MEMORANDUM FOR: Deborah Ingram 

FROM: 

Office of Emergency Man<lgement Oversight 

SUBJECT: Opportunities To Improve fEMA's Public Assistance 

Prl.!liminary Damage Assessment Process 

Attached for your action is our final report, Opportunities To Improve FEMA's Public 

Assistance Preliminary Damage Assessment Process. We incorpor<lted the formal 

comments from the Office of Policy and Program Analysis in the final report. 

The report contains three recommendations aimed at improving FEMA's Public 

Assistance Preliminary Damage Assessment process. Your office concurred with one 

recommendation. As prescribed by the Department of Homeland Security Directive 

077-1, Follow-Up and Resolutions for the Office of Inspector General Report 

Recommendations, within 90 days of the date of thiS memorandum, please provide our 

office with a written response that includes your (1) agreement or disagreement, 

(2) corrective action plan, and (3) target completion date for each recommendation. 

Also, please indude responsible parties and any other supporting documentation 

necessary to inform us about the current status of the recommendation. Until your 

response is received and evaluated, the recommendations will be considered open and 

unresolved. 

Consistent with our responSibility under the Inspector General Act, we are providing 

copies of our report to appropriate congressional committees with oversight and 

appropriation responsibility over the Department of Homeland Security. We will post 

the report on our website for public disseminat ion. 

Please call me with any questions, or your staff may contact John Kelly, Acting Deputy 

Assistant Inspector General, Office of Emergency Management Oversight, at 

(202) 254-4163. 

Attachment 
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Table of Contents 

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


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


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


Thoroughness of the Preliminary Damage Assessment Process ............................ 3 


State Per Capita Criterion Does Not Adequately Assess a State’s Capability To 

Respond to a Disaster .....................................................................................................5 

Conclusion .................................................. ..................................................................8 

Recommendations ...................................... ..................................................................8 

Management Comments and OIG Analysis ..................................................................8 

Appendices 

Appendix A: Objectives, Scope, and Methodology .............................................. 11 


Appendix B: Management Comments to the Draft Report ................................. 12 


Appendix C: Major Contributors to this Report................................................... 17 


Appendix D: Report Distribution .......................................................................... 18 


Abbreviations 

CFR Code of Federal Regulations 

CPI Consumer Price Index 

DHS Department of Homeland Security 

FEMA Federal Emergency Management Agency 

GAO Government Accountability Office 

JFO Joint Field Office 

OIG Office of Inspector General 

PDA Preliminary Damage Assessment 
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Executive Summary 

The Preliminary Damage Assessment is an important part of the disaster declaration 

process because it is a factor in determining whether an event will become a federally 

declared disaster. The Federal Emergency Management Agency (FEMA) uses the 

Preliminary Damage Assessment process as a mechanism “to determine the impact and 

magnitude of damage [caused by a disaster], and the resulting unmet needs of 

individuals, businesses, the public sector, and the community as a whole.”1 

The process contains two types of assessments, Individual Assistance and Public 

Assistance. This report focuses on the Public Assistance assessment. Preliminary 

Damage Assessments are performed as soon as possible after a disaster strikes, and as a 

result the process has several challenges. Damaged areas may be inaccessible, and 

ownership or insurance coverage data on damaged infrastructure may not be 

immediately available. In addition, once the assessment teams reach the statewide per 

capita indicator, the process often comes to a halt. These factors hamper the ability to 

determine the magnitude and economic impact of a disaster. 

Since 1986, FEMA has used an outdated per capita amount as an indicator that a 

disaster might warrant Federal assistance. The agency selected the per capita amount 

of $1 based on the national per capita income; it did not adjust the amount annually for 

the changes in per capita income, but decided to begin adjusting the amount for 

inflation in 1999. If the agency had continuously updated the indicator for changes in 

economic conditions, many recent disasters would not have met the financial statewide 

per capita indicator for Federal assistance. In addition, there may be a better indicator 

based on a State’s need for assistance than the current financial statewide per capita 

indicators, such as changes in per capita income or the Consumer Price Index. 

Given the Federal Government’s current economic and budgetary constraints, we 

recommend that FEMA revise the Public Assistance Preliminary Damage Assessment 

process to estimate a disaster’s magnitude and economic impact more realistically. 

Furthermore, the agency should reassess the criteria used to measure a State’s capacity 

to respond to a disaster to better reflect changing economic conditions. The agency 

also should determine whether other Federal data measures would provide a better 

assessment of a State’s response capacity. 

1 44 CFR § 206.33. 

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Background 

Code of Federal Regulations (CFR) Title 44, Section 206, establishes the process that 

FEMA uses for States to request a presidential disaster declaration and provides a 

mechanism for determining the magnitude and economic impact of the damage and the 

resulting unmet needs of individuals, businesses, and the public sector. 

FEMA’s Preliminary Damage Assessment (PDA) process contains two types of 

assessments, Individual Assistance and Public Assistance. This report focuses on the 

Public Assistance PDA assessment. The process starts when a Governor requests a joint 

FEMA-State PDA from the FEMA regional office to determine whether a disaster or 

emergency is beyond the local and State governments’ response and recovery 

capabilities. This process is normally completed before the Governor submits a request 

for assistance; following a severe or catastrophic event, a Governor may request Federal 

assistance before the PDA is completed. Once a Governor’s request for assistance is 

received, FEMA prepares a recommendation letter to the President. The letter is based 

on the PDA assessment, localized impacts, insurance coverage in force, hazard 

mitigation, recent multiple disasters, and programs of other Federal agencies. 

The PDA teams are composed of FEMA, State, and local emergency management 

representatives. Teams interview applicants and survey disaster damage firsthand to 

estimate the potential costs of Public Assistance emergency and permanent work. 

Initial damage estimates in the PDA include the extent, cost, and types of damage to 

facilities and infrastructure, including emergency costs incurred by the State and local 

governments. The PDA teams’ findings are compiled into an overall Governor’s Request 

for Disaster Assistance. The Governor’s request includes the types of damage or 

emergency costs incurred by the units of government; the impact on critical facilities 

such as public utilities, individuals, and businesses; the number of people displaced; and 

the threat to health and safety caused by the event. FEMA officials use this request to 

recommend to the President whether a disaster event is eligible for a presidential 

disaster declaration. 

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Results of Review 

Thoroughness of the Preliminary Damage Assessment Process 

The current PDA process has a number of shortfalls. 44 CFR §206.33 establishes 

the PDA as a mechanism for determining the magnitude and economic impact of 

the damage and the resulting unmet needs of individuals, businesses, and the 

public sector. This regulation requires FEMA to perform a PDA, but it does not 

specify how the PDA is to be conducted. FEMA and State officials said, and we 

observed, that PDA teams stop the PDA site assessment once the statewide per 

capita indicator is met. However, stopping a PDA when the statewide per capita 

indicator is met may breach Section 320 of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act (Stafford Act), which requires that no geographic 

area be precluded from receiving assistance solely by virtue of an arithmetic 

formula or sliding scale based on income or population. 

FEMA’s current PDA process has the State identify damages, which the PDA 

teams assess. FEMA officials said that States are aware that once a PDA team 

assesses disaster damages that equal or slightly exceed the statewide per capita 

indicator, FEMA will recommend that the President declare a disaster. 

During our review, we attended a PDA site assessment where the PDA team 

verified disaster damages until the indicator was reached, and the process was 

stopped as a result. We inquired about the PDAs during our deployments to the 

Joint Field Offices (JFOs) in New York, New Jersey, and Vermont following 

Hurricane Irene. At one of the JFOs, staff said that the State PDA was done by 

three individuals who sat down and assigned costs to affected counties until 

indicators were met. They said that the dollar amounts were not necessarily a 

true representation of the total damage. At another JFO, staff said that 

Hurricane Irene was declared a disaster before the PDA was completed. The 

PDA process was conducted for 3 days after the disaster was declared, and did 

not cover all damages. Since the damage was significant, FEMA officials said that 

it was difficult to make accurate estimates. The estimates were made using 

various methods, including flyovers, and were stopped once indicators were 

met. 

We also reviewed the PDA estimates for declared disasters in 2009 and 2010 to 

determine whether our observations of PDAs for Hurricane Irene were unique to 

this disaster. Figure 1 shows that 57% of the PDA estimates did not exceed the 

disaster indicator by more than 200%. This adds validity to the interviews and 

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observations noting that the PDA teams often stop estimating disaster damages 

once the indicator is met or slightly exceeded. 

Figure 1. Comparison of the 2009 and 2010 PDAs to Indicators 

Factors Affecting the Accuracy of Preliminary Damage Assessment Estimates 

FEMA officials said that efforts to accurately assess disaster damages are 

affected by the accessibility of damaged areas, availability of records showing 

ownership, responsibilities of other Federal agencies, and the amount of 

insurance coverage held by State and local governments. The following are 

examples of how the unavailability of such information has affected the process: 

•	 PDA teams encounter situations where documentation or knowledgeable 

individuals are not available to determine which State, local, or other Federal 

agency is responsible for repairing and restoring a damaged area or 

structure. This presents challenges in determining eligibility of sites and 

could result in ineligible costs being included in PDA estimates. The project 

worksheets that are prepared after a disaster declaration are intended to 

address information limitations such as the resolution of responsibility of 

repairing or restoring damaged facilities. 

•	 PDA teams face challenges estimating insurance proceeds for eligible 

permanent work projects. If teams can obtain insurance documentation 

during the PDA, adjustments can be made, but insurance policies or 

applicable areas of coverage are not always available. Again, the project 

worksheets that are prepared subsequent to the disaster declarations are 

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intended to address this lack of information regarding potential insurance 

proceeds. 

•	 After a disaster, it is often not possible for a PDA team to access the damaged 

areas. In these cases, PDA teams use flyovers, satellite imagery, or other 

techniques to estimate damage costs. These techniques are effective in 

documenting what infrastructure was damaged (i.e., which building, bridge, 

or road). However, the details of the type of damage (e.g., foundation, 

electrical, plumbing) might be excluded from PDA estimates, thereby 

understating the cost to repair or replace the facility. 

Because of the emphasis on estimating disaster damages to meet the statewide 

per capita indicator and the factors that affect the PDA process, the process is 

not thorough or detailed enough to accurately assess the impact of a disaster or 

predict the funding levels needed for a successful recovery effort. 

Incomplete and Inaccurate PDA Effects on the Federal Government 

Given the government’s current economic and budgetary constraints, Congress 

directed FEMA in the Consolidated Appropriations Act, 2012 (Public Law 112-33, 

September 30, 2011) to provide a full accounting of its Disaster Relief Fund 

budget requirements for fiscal years 2012 and 2013. As PDAs are one of the 

initial factors used to recommend that the President make a disaster declaration, 

a more thorough and accurate PDA process would help implement this 

congressional mandate. 

State Per Capita Criterion Does Not Adequately Assess a State’s Capability 

To Respond to a Disaster 

The $1 inflation-adjusted State per capita amount that FEMA uses to measure 

whether a disaster is beyond the capacity of State and local governments has not 

kept up with inflation, and is not necessarily a realistic measure of a State’s true 

ability to respond to a disaster. 

According to 44 CFR §206.48, when reviewing a Governor's request for major 

disaster assistance under the Stafford Act, FEMA reviews several factors to make 

a recommendation to the President as to whether assistance is warranted, 

including the estimated cost of the assistance. Therefore, it is important that the 

criteria used to develop the estimates be updated and that an accurate measure 

of a State’s capacity to handle disasters be established. 

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Since 1986, FEMA has used a per capita amount as an indicator that a disaster 

might warrant Federal assistance. FEMA selected the per capita amount of $1 

based on national per capita income, which in 1983 was $11,667. However, 

FEMA did not adjust the amount annually for changes in national per capita 

income. In January 1999, FEMA implemented the $1 per capita amount but 

disconnected it from per capita income, and decided to start adjusting the 

amount for changes in Consumer Price Index (CPI). In September 1999, FEMA 

issued a final rule on factors considered when evaluating a Governor’s request 

for a major disaster declaration under the Stafford Act. In the Federal Register 

notice, FEMA acknowledged that a straight per capita dollar figure “may not be 

the best measurement of a state’s capability” to respond to a disaster, but 

considered it a “simple, clear, consistent, and longstanding means of evaluating 

the size of a disaster relative to the size of [a state].” FEMA also acknowledged 

that “it is time to begin to peg this indicator to inflation since it has been in use 

without change for the past fifteen years.” 

Effect of Current Statewide Per Capita Indicators 

Beginning in 1999, FEMA agreed to adjust the statewide per capita indicator 

amount annually based on the CPI. However, FEMA did not adjust the per capita 

indicator amount for changes in income or purchasing power from 1983 to 1999. 

By not adjusting the per capita amount for 16 years, FEMA’s calculations did not 

take into account a 142% percent increase in per capita income and a 65% 

percent increase in the CPI. 

If FEMA had adjusted the $1 per capita statewide per capita indicator by the CPI 

or by the changes in the national per capita income since 1983, a significant 

number of 2009 and 2010 PDAs would not have exceeded the States’ indicator. 

Figure 2 compares the number of disasters that had PDAs exceeding the 

indicator using three different criteria: 

•	 Using the $1 per capita amount adjusted by the CPI starting in 1999 (current 

method); 

•	 Using the $1 per capita amount adjusted by the CPI starting in 1983; and 

•	 Using the $1 national per capita income indicator adjusted for growth in 

income since 1983. 

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Figure 2. Comparison of 2009 and 2010 Disasters to Indicator*
 

* This chart excludes two disasters in which PDA estimates were not performed. 

The current process, adjusting the statewide per capita indicator by the CPI only 

since 1999, resulted in nearly all of the disasters having PDAs that exceeded the 

States’ indicator. More than 36% of the PDAs would not have exceeded the 

States’ indicators if the $1 per capita amount had been indexed back to the 

change in the CPI since 1983. If FEMA had updated its 1983 national per capita 

income of $1 to reflect 2009 and 2010 national per capita income, more than 

56% of PDAs would not have exceeded the indicator. 

FEMA Needs a Better Way To Assess a State’s Ability To Respond to a Disaster 

In a 2001 report on the need to improve the criteria used to declare major 

disasters, the Government Accountability Office (GAO) criticized FEMA’s use of 

explicit financial indicators as a measure of a State’s ability to respond effectively 

to a disaster. GAO reported that a State’s capacity to respond to a disaster using 

state resources depends on several factors, the most important of which is the 

underlying strength of the State’s tax base and whether that base is expanding 

or declining. GAO argued that a State’s tax base represents the resource base 

against which it can draw to fund its public services needs, including repairs after 

a disaster. In addition, GAO pointed out that an expanding economy also 

provides more potential revenues than one that is flat or in decline. GAO 

recommended that FEMA develop objective and specific criteria to evaluate a 

State’s ability to respond to a disaster, such as a State’s total taxable resources. 

FEMA has not implemented GAO’s recommendation. Given the many demands 

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for Federal resources, the need for FEMA to be able to objectively assess the 

ability of State and local governments to fund disaster-related expenses has 

never been greater. 

Conclusion 

The PDA process does not provide a thorough, accurate assessment of a State’s 

economic capacity to respond to and recover from a disaster. To enhance the 

PDA process, FEMA should improve the Public Assistance PDA to estimate more 

accurately the magnitude and economic impact of a disaster. FEMA should 

reevaluate the State per capita criteria used to measure a State’s capacity to 

respond to a disaster. Furthermore, FEMA should determine whether other 

Federal data measures could better evaluate a State’s capacity to respond to 

disasters. 

Recommendations 

We recommend that the Assistant Administrator, Recovery Directorate: 

Recommendation #1: Improve the Public Assistance Preliminary Damage 

Assessment to estimate more accurately the magnitude and economic impact of 

a disaster. 

Recommendation #2: Update the current statewide per capita indicator criteria 

to better reflect current economic conditions. 

Recommendation #3: Evaluate other Federal data source measures to 

determine whether they provide a better indicator of a State’s capacity to 

respond to a disaster and, if appropriate, replace the current statewide per 

capita indicator measurement. 

Management Comments and OIG Analysis 

We reviewed FEMA’s response to our draft report and accepted the technical 

comment to change “threshold” to “statewide per capita indicator.” FEMA 

concurred with Recommendation #1, but did not concur with Recommendations 

#2 and #3. With regard to Recommendation #1, we acknowledge that FEMA has 

established a training course to improve the quality and consistency of PDAs. In 

addition, FEMA is in the process of pursuing data collection tools. However, we 

suggest that FEMA ensure that the training course addresses the issues 

discussed in this report and that the data collection tools that FEMA acquires be 

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able to estimate more accurately the impact of the disaster. We also agree with 

FEMA that the PDA process does not establish a final level of eligible funding in a 

declared event; however, it is a factor in establishing the need for Federal 

disaster assistance. As such, it is FEMA’s responsibility to review all Statedocumented damage assessments to ensure that the assessments are as 

accurate and complete as possible prior to the issuance of the presidential 

declaration. In this regard, FEMA should ensure that State and local officials 

provide up-to-date information prior to the joint FEMA/State PDA. We will 

determine the status of this recommendation once we receive the detailed 

corrective action plan in FEMA’s 90-day letter. 

FEMA did not concur with Recommendation #2. We recommended that FEMA 

update the current State per capita indicator to better reflect current economic 

conditions. FEMA stated that its September 1999 rule, which includes annual 

adjustments to the CPI for all Urban Consumers, provides a formal, clear, and 

publicly articulated criterion that applies to all requests for major disaster 

declarations. FEMA did not believe that it was reasonable to retroactively apply 

an adjustment that could result in more than one-third of currently declared 

incidents not being declared major disasters. We did not recommend the 

retroactive adjustment on previously declared disasters. Such a 

recommendation would be inconsistent with the basis of our first 

recommendation that PDAs are not as thorough as they should be because some 

States are aware that, once a PDA team assesses disaster damages that equal or 

slightly exceed the State per capita indicator, FEMA will recommend that the 

President declare a disaster. We used that analysis to illustrate the impact of not 

indexing FEMA’s indicator for more than a dozen years. We do not agree that 

the current statewide per capita indicator used by FEMA reflects a State’s 

capacity to respond to and recover from a disaster. The Stafford Act requires 

that a Governor’s request for a major disaster declaration be based on a finding 

that the disaster is of such severity and magnitude that an effective response is 

beyond the capabilities of the State. We believe this issue is best addressed in 

Recommendation #3. However, in the interim, it is our belief that FEMA should 

update the State per capita indicator by comparing current economic factors 

with those dating back to when FEMA first started to use the index. FEMA is a 

steward of Federal assistance funds and should develop measures that ensure 

that funds are spent effectively and efficiently. In addition, GAO made a similar 

recommendation in reports issued in 2001 and 2012. We will determine the 

status of this recommendation once we receive the detailed corrective action 

plan in FEMA’s 90-day letter. 

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FEMA did not concur with Recommendation #3. We recommended that FEMA 

evaluate other Federal data source measures to determine whether they provide 

a better indicator of a State’s capacity to respond to a disaster and, if 

appropriate, replace the current measurement. FEMA believes that its current 

State per capita indicator is consistent with the intent of the Stafford Act and 

that the arithmetic formula used to develop the statewide indicators does not 

violate Section 320 of the Stafford Act. We disagree with this assessment. 

FEMA’s per capita arithmetic formula has no direct relationship to the Stafford 

Act’s requirement that FEMA measure whether the severity and magnitude of a 

disaster is beyond the capability of the State and its local governments to 

respond effectively. For example, a per capita indicator does not take into 

account the unique circumstances that exist in a State like California, that has a 

large population but also has significant financial difficulties. Thus, we stand by 

the recommendation and believe that FEMA should do this evaluation to 

determine whether it’s State’s capacity to respond. In addition, GAO made a 

similar recommendation in reports issued in 2001 and in 2012. We will 

determine the status of this recommendation once we receive the detailed 

corrective action plan in FEMA’s 90-day letter. 

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Appendix A 

Objectives, Scope, and Methodology 

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

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

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

The objective of this audit was to assess the thoroughness and accuracy of FEMA’s 

Public Assistance major disaster declaration PDAs from fiscal years 2009 through 2010. 

We compared these PDAs with FEMA’s statewide per capita indicator, based on 

guidance issued annually in the Federal Register. 

We interviewed FEMA Public Assistance Senior Management officials and Disaster 

Comptrollers from headquarters, Region III, Region V, and Region IX. We performed 

fieldwork in Washington, DC, and Oakland, CA. We observed Region III in the 

formulation of the Maryland PDA for Hurricane Irene. In addition, we reviewed current 

PDA policies, processes, and procedures; reviewed applicable Federal regulations and 

FEMA guidelines; and performed other procedures considered necessary to accomplish 

our audit objective. We did not assess the adequacy of the internal controls applicable 

to PDA activities because it was not necessary to accomplish our audit objective. 

However, we did gain an understanding of the how the PDA process affects the 

accounting for disaster-related costs. 

We conducted this performance audit between July 2011 and November 2011 pursuant 

to the Inspector General Act of 1978, as amended, and according to 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 upon our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions based upon our 

audit objectives. 

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Appendix B 

Management Comments to the Draft Report 

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activity and proh'Tams n:g,mling olher FC41eral assistance. Tht: ohjective of the PDA is to provide 

information on the impacts of an incident for the consideration of these factors in making a 

recommendation to the President as to whether Federal assistance is warranted. The PDA is not meant 

or designed to serve as an estimate of final program expenditures for budgetary purposes. 

Preliminary damage assessments are conducted jointly, with the participation of FEMA, the 

State, atfected local jurisdictions, and other Federal agencies. PDAs are requested by the State 

and are conducted according to a schedule coordinated by the State based on availability oflocal 

jurisdictions. The results ofth!! joint PDA <Ire submitted by the Governor in support of his or her 

request for a major disaster declaration. 

As indicated in the OIG report, there are factors that may limit the information that can be 

collected as part of a PDA. This may include a PDA team's inability to access certain areas due 

to the impact of the incident and the lack of knowledgeable local personnel or documentation, 

such as insurance coverage, which may not be immediately available after a disaster. All or 

some of these factors may limit the ability to collect detailed infonnation on affected facilities 

and result in POA informatioTl that dues nutl:OITdate pret:isely to ultimate program funding 

levels once full infonnatiol:1 is collected and reviewed, and eligibility detenninations are madc. 

Again, the purpose of the PDA is not to serve as a determination on "final" elJgible funding, but 

to estimate costs to assess whether a major disaster declaration is warranted. 

The OIG also indicated that the review found in certain instances the PDA assessments ceased 

once the statewide per capita indicator had been met Two importWlt considerations balance this 

assertion. First, a State has responsibility for all impacted areas and local officials in all 

jurisdictions have an interest in ensuring damage in their communities is fully assessed and 

documented. Second, decisions on major disaster declaration requests must be made 

expeditiously in order to authorize Federal assistance that may be necessary to meet immediate 

needs of disaster survivors and initiate the recovery of impacted communities. Once again, the 

PDA provides informa tion needed to detennine whether a major disaster declaration should be 

made. More detailed and precise funding levels will result later in the process when eligible 

scopes of work are determined based on complete intormation on the disaster impacts. 

The DIG cites Congressional requirements in the Consolidated Appropriations Act of2012 for a 

full accounting of the Disaster Relief Fund (DRF) budget needs for fiscal years 2.012 and 2013. 

FBMA is actively pursuing these requirements and has implemented a number of initiatives to 

improve the management of the DRF. PDAs may serve as an initial estimate of funding in a 

major disaster; however, PDAs are quit:kly superseded by refineu estimates as more detailed 

information becomes available from the affected applicants. Sound management of the DRF is 

being achieved through the initiatives FBMA is putting in place to improve disaster budgeting 

and program management once a major disaster declaration has been made. 

As a technical comment, the DIG report refers to the statewide per capita impact indicator as a 

"threshold". This is inaccurate, as the per capita figurc is not a threshold, but is an "indicator" of 

the estimated cost of assistance, which remains one of the factors considered by FEMA v.:hen 

evaluating a request for a mHjor disHster declaration (44 CPR 206.48(a)(1». 

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Tbe OIG includes three recommendations in the draft report. FEMA's response to the proposed 

recommendations follows. 

Recommendation #1: Improve the Public Assistance Preliminary Damage Asses51uent to more 

accurately estimate the magnitude and economic impact of a disaster, 

FEMA com.:urs with this recommendation. FEMA endeavors to support a joint FEMA-Stale-local PA 

PDA process that provides the most accurate and complete assessment of an incident's impact as 

possible. As noted by the OIG, the post-disaster environment may be a limiting factor in the completion 

of a PDA. At times, certain areas may be inaccessible due to the impact of the incident. Collection of 

infnnnalion must also he hal anced with the need lo complete a PDA expeditiously ill order fix a 

determination to be made on thc authorization of Federal assistance that may be necessary to meet 

critical needs of communities affected by the incident. 

In onler tu pnJvide guidam.:e and training un the PA pnA proce~~, FRMA devdllped th e «Pn:liminary 

Damage Assessment" course in 2009. This training course specific to PA PDAs was developed to 

improve the quality and consistency ofPA PDAs. The class provides instruction on worldng with State 

and local governments to perform damage assessments, accurately document damage, fannulate sound 

cost est.imates, and t:Tlsun:: that appropriate eligibility is."ut:,.o; are cIlTlsidered fur the a~sessmt:Tlt u f the 

work scope and overall project costs. The course is taught on a regular basis, and often includes 

participation by State representatives. FEMA also provides States with copies of the course for training 

of local government personnel. 

Further, FEMA is pursuing data collection tools that will provide enhanced capabilities to pcrfoml 

PDAs and record infonnation in an efficient and consistent manner. FEMA is currently assessing the 

best available options for development of such a tool for PA PDAs, based on previous efforts to explore 

development I,f such a tool and in li ght of currently re fined technologies. 

The PUA process provides FEMA officials the information that they would consider in evaluating 

whether a major disaster declaration is warranted. The PDA process does not establish a final level of 

e1i gihle funding in a declart::d evt::nL FRMA is implemenling olher initiatives to impmve disasler 

b udgeting and program management once a declaration has been made that will enhance f-EMA's ability 

to manage and budget for expenditures from the Disaster Relief Fund. This includes improved monthly 

budgeting in disaster operations, and better financial management of grant funding tlrrough enhanced 

quarterly reporting on proj ects through the Statcs as grantces f(]f the Puhlic Assistance Program. 

Recommendation #2 : Update the current state per capita threshold criteria to better reflect 

current economic conditions. 

FEMA does not concur with this recommendation pertaming to the per capita indicators. In 

1999, FEMA issued a regulation outlining the factors considered when evaluating a Governor's 

request for a major disaster declaration. The proposed mle, published on January 26, 1999, 

stated that the factors represent, "a simple, clear and reasonable means to measure the severity, 

magnitude and impact of a disaster, while at the same time ensure that the President can respond 

quickly and effectively to a Governor's request for assistance." The final regulation, published 

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on September 1, 1999, provided tormal, clear and publicly articulated criteria that would be 

applied to all requests for major disaster declarations. In this way, all parties, Federal, State and 

local, are now infonned of and have an lmderstal1ding of the criteria for the consideration of 

requests for assistance. It is important to reiterate that the rcgulation established factors for 

consideration ohequests, and did not establish "thresholds", as stated by the OrG. Further, the 

factors pertain to FEMA making a recommendation to the President on wbether Federal 

assistance is warranted, while the President maintains final discretion on the dec1amtion of a 

major disaster. 

FEMA initially proposed establishing fonnal major disaster declaration criteria in 1986. The 

notice in the Federal Regisler srated that, "Based on a per capita income of$11,687 it appears 

reasonable that a State would be capable of providing S 1.00 for each resident of that State to 

cover the cost of State efforts to alleviate the damage which rcsults from a disaster situation. 

Based on $1.00 per capita, the capability indicators developed for States correlate closely to 

about 0.1 of one percent of the estimated General Fund expenditures by States. Using $1.00 per 

capita multiplied times lhe population of a State and then multiplying that figure by the ratio of a 

Statc's per capita pcrsonal income to the oationw nverage per capita personal income (to provide 

an adjustment for State that have per capita incomes above or below the National average), an 

objective indicator, which can be usee! in the declararion process will be developed for eaeh 

State." This proposal was not adopted. 

In 1998, FEMA issued a notice in.the Federal Register proposing to adjust the $1.00 per capita 

figure to $1.51 based on inflation since 1986. FEMA received comments from the public 

expressing concern about adjusting the indicator for inflation retroactively to 1986. FEMA did 

not implement this proposal. 

FEMA issued a proposed rule on January 26,1999, to formally establish the factors considered 

when evaluating a Governor's request for a major disaster declaration. The rule included a 

statewide indicator of $1.00 per capita for the evaluation of the estimated cost of Public 

Assistance. The final rule, published on September 1, 1999, did not adjust the per capita 

indicator for inflation retroactively. Rather, the rule did establish that the statewide per capita 

indicator would he adjusted annuall y from that point forward based on the Consumer Price Index 

for all Urban Consumers. The statewide per capita indicator currently in use (S1.35) is based on 

the indicator established in 1999 and reflects annual adjustments based on the Consumer Price 

Index (CPI) since the regulation went into effect. 

Based on the DIG's findings, if the S1.00 pcr capita figurc had becn adjusted retroactively based 

on CPI since 1983, over 36% of major disasters declared in 2009 and 2010 would not have 

reached the statewide per capita indicator. FEMA does not believe that it is reasonable to 

relrnacti vely apply such an adjustment th at could result in over one third of currently declared 

incidents not being declared major disasters. FEMA is fully cognizant of currcnt constraints on 

the Federal budget, and is implementing measures to closely manage the Disaster Relief Fund 

(DRF) in particular. However: many State and local govenunents are likewise experiencing 

significant budgetary (.;onsLraints, which onen makes Federal disaster assistance dollars all the 

more important to communities recovering from the impact of major disasters. 

4 

www.oig.dhs.gov 15 OIG-12-79 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Recommendation #3: K"a luate other federal data source measures to dctermine whether the}' 

provide a better indicator of a state's capacity to respond to a disaster and, if appropriate, replace 

t.he current threshold measuremcnt. 

FEMA does not concur. with this recommendation. FEMA reviewed other sources of data in 200 I for 

potential use as major disaster declaration criteria and chose not to propose changes to tht! current 

factors outlined in FEMA regulations. FEMA does not plan at this time to propose changes to the 

factors or indicators tor assessing requests tor the authorization of Public Assistance as part of a major 

disaster declaration. 

The CUlTent cliteria for disaster declarations, as outlined in FEMA regulations, are consistent with the 

intention of the Statlord Act, and the use ofthe Statewide indicator as one of the tactors tor 

consideration is not contrary to the Section 320 of the Stafford Act prohibiting the use of an arithmetic 

fonnu la as the sole basis for precluding assistance to any geographic area. FEMA believes, a<; stated in 

1999. that the current fac tors provide, "a simple, clear and reasonable means to measure the severity, 

magnitude and impact of a disaster, while at the same time ensure that the President can respond quickly 

and effectively to a Governor's request for assistance." 

Once again, thank you for the opportunity to comment on the draft rCJXlrt. Please fcel free to 

provide any comments/concerns to our Chief Audit Liaison, Mr. Brod Shetku, 202-646-1308. 

5 

www.oig.dhs.gov 16 OIG-12-79 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

 

Appendix C 

Major Contributors to This Report 

Kaye McTighe, Director 

Nigel Gardner, Audit Manager 

Christine Alvarez, Auditor in Charge 

Nathaniel Nicholson, Auditor 

www.oig.dhs.gov 17 OIG-12-79 
 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Federal Emergency Management Agency 

Administrator 

Chief of Staff 

Associate Administrator, Response and Recovery 

Deputy Associate Administrator, Response and Recovery 

Assistant Administrator, Recovery 

FEMA Audit Liaison (Project Number 11-128-EMO-FEMA) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as appropriate 

www.oig.dhs.gov 18 OIG-12-79 
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