Department of Homeland Security
 

Efforts to Expedite Disaster 


Recovery in Louisiana 


OIG-12-30 January 2012
 
u.s. Department of Homeland Security 

Washington, DC 20528 

Homeland 

Security 

MEMORANDUM FOR: Deborah Ingram 

Assistant Administrator, Recovery Directorate 

Federal Emergency Management Agency 

I t/~P- FROM: D. Michael Beard / /" 

Acting AssistanyJ spector General 

Emergency Maf1a.gement Oversight 

SUBJECT: Efforts to Expedite Disaster Recovery in Louisiana 

Attached for your information is our final letter report, Efforts to Expedite Disaster 

Recovery in Louisiana. We incorporated the formal comments from the Federal 

Emergency Management Agency (FEMA) into the report. 

The report contains two recommendations aimed at improving FEMA's public assistance 

program. Your office concurred with both recommendations. Within 90 days of the date 

of this memorandum, please provide our office with a written response that includes your 

(1) agreement, (2) corrective action plan, and (3) target completion date for each 

recommendation. Also, please include 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, as amended, we are 

providing copies of our report to appropriate congressional committees with oversight 

and appropriation responsibility over the Department of Homeland Security. The report 

will be posted on our website. 

Should you have any questions, please call me, or your staff may contact 

John Kelly, Acting Deputy Assistant Inspector General, Office of Emergency 

Management Oversight at (202) 254-4163. 
cc: Jason McNamara, Chief of Staff, FEMA 

David Kaufman, Director, Office of Policy and Program Analysis, FEMA 

William Roche, Director, Public Assistance Division, FEMA 

Audit Liaison, DHS 

Audit Liaison, FEMA 

Attachment 

2
 
 

Background 

The Federal Emergency Management Agency’s (FEMA) Public Assistance (PA) 

program provides funding to repair, replace, or restore disaster-damaged, publicly owned 

facilities and the facilities of certain private nonprofit organizations. The program also 

funds emergency-related activities such as debris removal and emergency protective 

measures. This assistance is provided to state and local governments, federally 

recognized tribes, and certain private nonprofit organizations. 

The PA process starts with a Preliminary Damage Assessment, which is a joint assessment 

by the state and FEMA to evaluate the magnitude and impact of an event’s damage. 

FEMA uses the results of the assessment to determine if the situation is beyond the 

combined capabilities of state and local resources. If there is a need for federal 

assistance, the President may declare a disaster. Once a disaster declaration is made, 

FEMA provides assistance covering at least 75% of the eligible costs. The President has 

the ability to increase the percentage of federal assistance based on the severity of the 

disaster. 

As of July 12, 2011, FEMA had obligated $10.2 billion in PA grants to support 

Louisiana’s recovery from Hurricane Katrina. The hurricane’s landfall and the 

subsequent flooding overwhelmed Louisiana’s capacity to respond to and recover from 

the disaster. The President officially declared a disaster, which allowed FEMA to 

provide financial assistance for disaster recovery. For Hurricane Katrina, the federal 

share of assistance to Louisiana is 100%. 

FEMA is required by Code of Federal Regulations Title 44, Section 206.204(c)(1), to 

establish PA project deadlines that start on the date of a presidentially declared disaster 

and should conclude no later than 48 months afterward. Table 1 shows the regulatory 

deadlines and extensions by project work type. 

Table 1. Public Assistance Deadlines 

PA Categories and Projects 

by Work Type 

Initial PA Project 

Deadlines 

Grantee Deadline for 

PA Project Extension 

Total Months 

To Complete 

PA Projects 

A. Debris Clearance 6 months 6 months 12 months 

B. Emergency Work 6 months 6 months 12 months 

C–G. Permanent Work 18 months 30 months 48 months 

3
 
Results of Review 

Public Assistance Project Closeout in Louisiana 

Only 6.3% of Katrina-related PA projects in Louisiana have been closed in the 72 months 

since Hurricane Katrina made landfall. Projects, especially those in categories A (Debris 

Clearance) and B (Emergency Work), are years past the closeout deadlines. 

The primary reason given by all state, local, and FEMA officials interviewed was the 

catastrophic nature of Hurricane Katrina. As mentioned in our 2006 report,1

 the 

magnitude of the storm and its effects completely overwhelmed state and local 

governments, as well as FEMA’s disaster response system and resources. The hardest-hit 

communities lost all infrastructure: electricity; water and sewer lines; roads and bridges; 

communication systems including telephone lines, cell phone towers, radio capabilities, 

and satellite antennas; and, in some instances, basic government operations, including 

law enforcement. Although FEMA has worked with Louisiana to expedite the recovery 

effort, state and subgrantee officials said that it may take between 10 and 20 years to 

close all PA projects in Louisiana. FEMA regional officials made similar statements. 

Table 2 shows the status of Katrina PA projects in Louisiana, Mississippi, and Alabama. 

Table 2. Public Assistance Projects in Three States 

Public Assistance Project Categories Total Projects Closed 

Projects 

Percentage 

Closed

 Louisiana-DR 1603 

A. Debris Clearance 615 34 5.5 

B. Emergency Work 5,118 413 8.1 

C–G. Permanent Work 12,963 731 5.6 

Totals 18,696 1,178 6.3

 Mississippi-DR 1604 

A. Debris Clearance 1,168 936 80.1 

B. Emergency Work 2,099 1,292 61.5 

C–G. Permanent Work 7,806 6,261 80.2 

Totals 11,073 8,489 76.6

 Alabama-DR 1605 

A. Debris Clearance 260 260 100 

B. Emergency Work 296 295 99.7 

C–G. Permanent Work 1,105 1,097 99.3 

Totals 1,661 1,652 99.5 

1 A Performance Review of FEMA’s Disaster Management Activities in Response to Hurricane Katrina 

(OIG-06-32), March 31, 2006. 

4 
Causes of Delays in Public Assistance Project Closeouts 

Several factors have contributed to the slow progress of completing and closing out PA 

projects. FEMA, Louisiana, and subgrantees provided the following explanations as to 

why the efforts to close PA projects have been delayed. 

100% Financing of PA Projects 

Louisiana officials and our field auditors said that one of the key contributors to the slow 

progress in closing out projects was the federal government’s decision to fund 100% of 

eligible Hurricane Katrina costs. Because the state does not pay the project costs, it has 

no incentive to seek cost-effective replacement or repair solutions, close completed 

projects, or begin reducing the disaster workforce as work is completed. The 100% 

financing also led to applicants continuing to identify new damages 51⁄2 years after the 

event, and asking FEMA to cover eligible costs. 

Project Procurement Process 

Louisiana and subgrantee officials expressed concerns that FEMA’s procurement process 

is complicated and rigid, especially burdensome after a catastrophic disaster. Some 

officials said that early in the PA process, repair projects were delayed because FEMA 

required contracts to be competitively bid. Therefore, the project was delayed until 

additional bids were received. 

PA Program Decisions 

Some subgrantees said FEMA decisions for applicant eligibility and replacement versus 

repair determinations were inconsistent early in the PA project worksheet (PW) 

formulation process. Applicants must document proof of ownership to be eligible for 

assistance. Following Katrina’s landfall, proof of ownership documents were lost or not 

easily located. Subgrantees said FEMA had inconsistent rules as to what documents 

would serve as proof of ownership. 

Subgrantees also said FEMA made inconsistent replacement versus repair 

determinations. The State of Louisiana Legislative Auditor said FEMA’s PA process 

encouraged “false starts” in the development of a PW. A PW might start as a repair, but 

over time it would be converted into a replacement. For example, one subgrantee wrote a 

PW to replace a wall of windows that had 50 windowpanes, 20 of which were damaged. 

FEMA said that it would replace only the 20 damaged panes because the facility did not 

suffer 50% worth of damage. FEMA later reversed its decision and replaced the entire 

wall of windows with a single-pane window. 

Some of these inconsistent decisions were made by transitional FEMA staff. Subgrantees 

said that FEMA now has more continuity of staff in Louisiana and PA determinations are 

more consistent. In addition, to improve repair versus replacement determinations, 

5
 
FEMA officials said they have improved PA standard operating procedures and expect 

changes to the PA cost-estimating format in the near future. 

State Resources for Project Closeout 

Louisiana and subgrantee officials said that some PA projects are eligible for closeout. 

However, state-level efforts to close these projects are limited because state officials have 

assigned staff resources to other projects that are considered more important. In contrast, 

our field auditors and FEMA officials said that $196 million has been given to the State 

of Louisiana to manage Katrina PA projects. 

Conclusion 

In the 72 months since Hurricane Katrina made landfall, only 6.3% of all Katrina-related 

public assistance projects in Louisiana have been closed. FEMA, state officials, and 

subgrantees said the catastrophic damage caused by the hurricane is the major cause of 

delay in completing and closing PA projects. The same officials also said several factors 

delayed efforts to close PA projects: the federal government commitment to reimburse 

Louisiana 100% percent of all PA project costs, FEMA’s complicated project procurement 

process, PA decision inconsistencies, and Louisiana’s staff resources. FEMA is working 

to address the PA program decision inconsistencies by assessing PA operating procedures, 

developing disaster staff continuity, and improving the PA cost-estimating format. 

FEMA needs to develop policies, procedures, and timelines to specifically address the PA 

project management process for projects that are 100% federally funded, coordinate with 

the State of Louisiana and local governments to evaluate the status of PA projects, and 

develop a process to expedite the closure of completed projects. 

Recommendations 

We recommend that the Assistant Administrator, Recovery Directorate: 

Recommendation #1: Develop and implement specific policies, procedures, and 

timelines to ensure that projects with 100% federal funding are closed timely. 

Recommendation #2: Evaluate the status of all Public Assistance projects in 

Louisiana associated with Hurricane Katrina. Develop, in conjunction with the 

State of Louisiana, a process to close completed projects and expedite the 

completion of open projects. 

6
 
Management Comments and OIG Analysis 

We received written comments on the draft report from FEMA’s Office of Policy and 

Program Analysis. FEMA concurred with both recommendations. We included a copy 

of the comments in appendix B. 

We analyzed FEMA’s comments and agree with actions that FEMA is taking. With 

regard to Recommendation 1, the development of an updated draft Public Assistance 

Program Management and Grant Closeout Standard Operating Procedure will move 

FEMA toward better oversight of federal disaster fund management and will provide 

grants with clear guidance to ensure that federal funds are spent timely and within the 

scope of work required. We will determine the status of this recommendation once we 

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

With regard to Recommendation 2, FEMA, in conjunction with the State of Louisiana, 

developed a plan to expedite the closure of Public Assistance projects related to 

hurricanes Katrina, Rita, Ike, and Gustav; however, FEMA must remain diligent in its 

efforts to ensure that the state and its subgrantees are educated on the process and 

regulations associated with federal disaster funding. We will determine the status of this 

recommendation once we receive the detailed corrective action plan in FEMA’s 90-day 

letter. 

7
 
Appendix A 

Purpose, Scope, and Methodology 

The objective of this inspection was to establish the current status of all FEMA PA 

projects in Louisiana associated with Hurricane Katrina and to determine why the 

projects are still open. Our analysis focused specifically on Hurricane Katrina project 

closeout in Louisiana because of the large number of projects and continued congressional 

and public interest in Hurricane Katrina recovery activities. 

We interviewed officials from FEMA’s Region VI Public Assistance Division, the 

Louisiana State Governor’s Office of Homeland Security and Emergency Preparedness, 

the State of Louisiana Legislative Auditor, and subgrantees in New Orleans. We 

performed fieldwork in Washington, DC, and Baton Rouge and New Orleans, Louisiana. 

Our analysis is based on a review of applicable documentation and interviews. We 

conducted this inspection between January and May 2011, in accordance with Quality 

Standards for Inspections, President’s Council on Integrity and Efficiency, January 2005. 

The standards require that we plan and perform the inspection to obtain relevant evidence 

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

inspection objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on our inspection objectives. 

8
 
Appendix B 

Managements Comments to the Draft Letter Report 

l. '. I",p'''"''.' "I lI o",d.~~ '«u.j" 

'''II ( "" ... 1. ,II 

1I",hl ,"'. IX '.1': 

DEC I 9 1011 

MEMORA~DU1'." FOR: Chark'S K. Edwards 

Acting Inspcctor Gencral 

Ollice oflhe [nsi'CC1or General 

FRON!: ,:,- D:lI'idJ. Kauli-nan '1(c;,::: 

Director 

Officc of Policy ~lJ1d Program Analysis 

SUBJECT: I'E1'.'IA Response to Oflice of InspL'dor General (OIG) 

Draft Report. /:.jfims 10 E.'1}edil(' Disaster RecQ\'('ry in 

Louisiana 

Thank you for the opportunity to comment on your dr .. n report. Eifo/"ls ro Elpcdi/e DiSlls/a 

HecOI'ery ill Louisialla (l'rojL"<:t il I O-OI3-EMO-FEMA). 'nle finding,; in the repon will be used 

to strL'lgthcn the efti. .. etiveness and eflieieney of how we execute and measure our prognuns. We 

recogni:!e the need to continue to improve our prOCL'Sses. including addressing the 

recornrn.:ndations rais.::d in this rq)()rt. Our rcsponsL'S to your two rt.'<:Ollllllcndations arc as 

follows: 

o rG RCCOlnnlcllti:llion #1: De\"dop :Irld impl<:mc1l1 spttifie poli.::k'S. proc(.'dufes. and tnnelincs 

to ensurc that projects II'lih 100"-" (L"tieral funding arc closed tllllely . 

• -EMA Rcsponse: FEMA coneurs with this recommendation. 

FEMA has completed Ihe draft of an updated Standard Operatmg Procedure (SOP). Public 

Assistallce Program Managemenl and Grant Closeout (SOP 95711.14). This updated SOP 

describes the process FE\>1A staff will follow to efficiently 3nd elTectillely close out disasters. 

The purpose of the SOP is 10: (I) define and standardize the aetiviti .. 'S associated with the 

closeout phase; (2) promote consistency in delivering and monitoring the Public Assistance (P A) 

Program; and (3) create a common understanding o(the e:tpectations and requirements for the 

asststanc.:: provided. The document outlines the roles and rcsponsibilities. objectiVes. milestones . 

.... ".rCID».~ .. ' 

9
 
Appendix B 

Managements Comments to the Draft Letter Report 

2 

n.:quirclllcm$, and pcrfornlancc 1l1casurt'1i associat<.'d with the Program Manugcmcnl and Grant 

close out pluiscs of the P A process. In some insl:mccs. unique or S~'{;i31 circumstances may 

1\.'tJuirc deviations from the process described in this SOP. The draft includes input from FEMA 

Regions and stakeholders :md is currently in the concurn.:ncc process: it is schcdl.lkd for rcic;)sc 

in FY 2012. After oompletion of the concurr('ncc process. the final SOP will be fOfwardlxilo the 

QIG. 

Additionally. a training course is in dCI'.::!oprncnllhal will address the Pf\ Program procCl)S, roles and 

responsibilities as rc1attxl to close out acti\'itic~. The training course is tentativciy scheduled for 

implementation in I'Y 2012. 

FEMA r .. -quests thallhis Tl'CQlllll1Cfldation be resolved and open pending implemt'l1tation of the 

stat ... -d eorr ... 'Ctivc action. 

OIG Recommendation #2: Evaluate the status of all Public Assistance projt'Cts in Louisiana associat ... -d 

w ith Hurricane Katrina. Develop. in eonjum;tion with the State of Louisiana. a process to close 

completed projects and eX[l<."1lite the cornp!ction o f open projects. 

FEi\IA Response: FEMA concurs with this recommendation. 

FEMA has devcloped a procedure thut tracks the progress o f r ... 'Covery and the movement toward 

proJ;l"arnrnatic clost'Out of Hurricanes Katrina. Rita. Gllstav and Ike projects. The procedure is 

docurnL'I1ted in a wct:kly Louisiana Recovery Status Rt""[lQ" that surnrnarizt-s the current status of 

metries such as projt'Ct worksheets. funding. appeals. arbitration as well as financi al obligation 

projl'Ctions and progrcss towards closeout. l'roJ;l"ess towards closL'Out is documented through thc 

completion of exit briefings. milestones of construction completions. inspections. recu\"CT)' of 

excess funds. financial recunciliations. and projcct, applicant and disaster closeouts. 

Once all initiall'rojec\ Worksheets (I'W) for a speeific Applicant afC created. FEMA initiatL"S an 

e.lit briefing. This IIlL"i.o1ing allows all pank-s to agree Ihat C\'L'fY identifk-d proj ... 'Ct has been 

captun.-d on a I'\\'. To this cnd. the Louisiana Recovt'fy Ollicr.: (lRO) is aggmlsivcly pursuing 

the complelion o f e.\it briefings of all Applicant.-;. 

10
 
Appendix B 

Managements Comments to the Draft Letter Report 

3 

As shown in the ~harts below. exit briefings ~lrc 92 percent LXllllplctc for Ilurri1;ancs Katrina/Rita 

and 98 percell! complete for Hurricanes Gustav Ike as of Dcccmbcr 16. 201 J. 

,_. 

'" .. 

The Governor's Olliec of Homeland Security und EmcrgL'ncy Pn.:parl-dncss (GOHSEP) has 

dcvclo]>LxI a CIOSL"Out process 10 ensure Ih~'1 each Applicant and prujLx:t Ille<:i the eligibility 

TL"quircmCllls and documentation standards mandatL-d by Fl-dcml and State regulations. The 

process is Stalc-dri,'C!l wilh approval from the FEMA Regional olliee. FEMA and the 513\C 

mcct regularly to cnsurc continuing progress. As projects reach construction completion and 

obligated moncy is drawn down by the S1a(c \0 reimburse the Applicant for all eligible work. the 

Applicant may request that the Stale initiale project closeout. The following graph df.'scrim.'S the 

current status of project closeouts as of D .. :ecmbcr 16. 2012, 

........ ,."" K' ... . " ~ .. J 

...... "'."" ,~~. 

• . ... , , ..... 

.. ".rl,. .. 

.. ' .... 

lUll 

f--

, 

j 

... II"" - h;m-

,-

',IItJ 

- ". I- f-

, " Ji. • 

.. 

,,1M 

_. -

1.1'-'1 1.117 

....... ' .flO 1::- " • " 

FE\1A recently participated in a Globa! Issuc Summit with GOHSEP held In Louisiana on 

October 18-19. 2011 Thc summit focosed 00 ongoing efforts by FE\1A and the State regarding 

11
 
Appendix B 

Managements Comments to the Draft Letter Report 

4 

outstanding closeout issues Following Ihe Summit, additional meetings were held the w(,'Ck of 

October 24, 2011 with the LRO, FE:-'IA Region and the Stale \0 dl'Vclop target dates for 

t'Omplcting oblig:l1ions and c1os<-'Ou\s of Louisiana projt:cts. At those meetings, Region VI and 

the PA staff orlhe LRO prcscntt-d the current st3lUS of c!O~CQuIS and proje<:ls for Hurricant'S 

Gustav and Ike. It was d~.:cidcd that working groups will be cslablish .. -d \0 develop a strategic 

plan for moving projccts 10 closeout. GOHSEr committt-d \0 making ciOSl"Out a priority and to 

providing additional resources 10 this elTort. GOIISEI' also committed to working with rEMA 

10 dctcnninc if FEMA might Ix: able to augment their slaff in the CIOSl'()UI effort. It is ClIp!-"Ctoo 

thatlhc strategic plan for procl'CCiing with the Gustav l Ike closeouts will be complc\ed by the 

end ofDecembcr 2011. 

While these m~1ings were focused on closeout activities for Gustav and Ike, FEMA continues to work 

with GOHSEI' to develop a closeout strategy for Katrina/Rita Category A and B proje<:ts. FEMA wi!! 

r.:main engaged in this process with the State of Louisi:lIla in order to close completed proj~'Cts and to 

expcclite the completion of open projects. 

We thank you. agam, fOf the opportunity to provide our comments to your recommendations 

contained in your draft report. Should you have further questions regarding our response. please 

do not hesitate to call FEMA's Chief Audit Liaison. Brad Sheth. at 202-646-1308. 

12
 
Appendix C 

Major Contributors to this Report 

Kaye McTighe, Director 

Nigel Gardner, Audit Manager 

Christine Alvarez, Auditor-In-Charge 

Nathaniel Nicholson, Auditor 

Aaron Naas, Independent Referencer 

John Woo, Independent Referencer 

13
 
Appendix E 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

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 10-013-EMO-FEMA) 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

14
 
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our OIG Office of Public Affairs at DHS-OIG.OfficePublicAffairs@dhs.gov. For 

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@dhsoig. 

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