```

[Senate Hearing 114-355]
[From the U.S. Government Publishing Office]

                                                     S. Hrg. 114-355

        FEMA: ASSESSING PROGRESS, PERFORMANCE, AND PREPAREDNESS

=======================================================================

                                 HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON FEDERAL SPENDING
                   OVERSIGHT AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 12, 2016

                               __________

                   Available via http://www.fdsys.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs
                        
                        
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Benjamin C. Grazda, Hearing Clerk

  SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT

                     RAND PAUL, Kentucky, Chairman
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska
                     Brandon Booker, Staff Director
                 Marianna Boyd, Minority Staff Director
                      Rachel Nitsche, Chief Clerk
                            
                            
                            
                            
                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Paul.................................................     1
    Senator Baldwin..............................................     3
    Senator Heitkamp.............................................    17
Prepared statement:
    Senator Paul.................................................    25
    Senator Baldwin..............................................    27

                               WITNESSES
                        Tuesday, April 12, 2016

Hon. Timothy Manning, Deputy Administrator, Protection and 
  National Preparedness, Federal Emergency Management Agency, 
  U.S. Department of Homeland Security...........................     5
Hon. John Roth, Inspector General, U.S. Department of Homeland 
  Security.......................................................     7
Chris Currie, Director of Emergency Management, National 
  Preparedness, and Critical Infrastructure Protection, Homeland 
  Security and Justice Team, U.S. Government Accountability 
  Office.........................................................     9
John Drake, Deputy Administrator, Pipeline and Hazardous 
  Materials Safety Administration, U.S. Department of 
  Transportation.................................................    11

                     Alphabetical List of Witnesses

Currie, Chris:
    Testimony....................................................     9
    Prepared statement...........................................    50
Drake, John:
    Testimony....................................................    11
    Prepared statement...........................................    68
Manning, Hon. Timothy:
    Testimony....................................................     5
    Prepared statement...........................................    29
Roth, Hon. John:
    Testimony....................................................     7
    Prepared statement...........................................    38

                                APPENDIX

Responses to post-hearing questions for the Record:
    Mr. Manning..................................................    78
    Mr. Roth.....................................................    90
    Mr. Currie...................................................    95
    

 
                      FEDERAL EMERGENCY MANAGEMENT
       AGENCY: ASSESSING PROGRESS, PERFORMANCE, AND PREPAREDNESS

                              ----------                              

                        TUESDAY, APRIL 12, 2016

                                 U.S. Senate,      
                        Subcommittee on Federal Spending,  
                    Oversight and Emergency Management,    
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 3:03 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Rand Paul, 
Chairman of the Subcommittee, presiding.
    Present: Senators Paul, Ayotte, Ernst, Sasse, Baldwin, 
Booker, and Peters.
    Also present: Senator Heitkamp.

               OPENING STATEMENT OF SENATOR PAUL

    Senator Paul. I call this hearing to order. Good afternoon 
and welcome to the panel, and thanks for joining us today.
    This Committee is charged with oversight over all Federal 
spending, which we accomplish through hearings like this one 
and through regular reports that are provided by various 
agencies that also help us to oversee government and its 
spending. Today we are examining spending at the Federal 
Emergency Management Agency (FEMA) and the need to make reforms 
in that spending.
    Given that our government borrows about $1 million every 
minute and has a $19 trillion debt, we just cannot afford to 
allow waste to persist in government.
    Waste at FEMA and grant programs administered by FEMA has 
been described in detail by Senator Coburn, the Government 
Accountability Office (GAO), and the Department of Homeland 
Security (DHS) Inspector General (IG). One of our witnesses 
today, Inspector General Roth, found in a report issued today 
that Maryland bought nearly $70,000 worth of computer equipment 
that it did nothing with for nearly a year and a half.
    In 2012, Senator Coburn reviewed one FEMA grant program and 
concluded the program is struggling to demonstrate how it is 
making U.S. cities less vulnerable to attack and more prepared 
if one were to occur--despite receiving over $7 billion in 
Federal funding.
    After 10 years, a clear danger for the Urban Areas Security 
Initiative (UASI) grant program is that it would be transformed 
from a risk-based program targeting security gaps into an 
entitlement program for States and cities. I think that risk 
still exists and that many States are supplanting some of their 
typical expenditures that they would commonly pay for 
themselves with Federal money.
    I do not think to this date we have adequately corrected 
the deficiencies that Dr. Coburn found.
    Just last month, Inspector General Roth also released a 
report that had 333 recommendations for reform to the grant 
programs at FEMA, however FEMA only found that four permanent 
changes had been made to FEMA over the time in which these 
recommendations had come forward. Despite recommendations for 
reform over a nearly 5-year period, little in the way of reform 
appears to have occurred.
    We had a hearing on this in 2013 in which we went through 
some of the various forms of waste that were occurring at FEMA, 
but even since that hearing, we still continue to have 
problems: $280,000 was recently spent for a Bearcat armored 
vehicle in Dover. The last time we were around, we complained 
of a $600,000 Bearcat armored vehicle for Keene. I guess New 
Hampshire is ready for the next invasion. We also found 
recently--or the inspectors have found, $1.7 million for unused 
radios and generators in Hawaii and $174,000 for unused radios 
in D.C. This is since we last met to talk about waste.
    Every dollar wasted makes a difference to taxpayers. Right 
now FEMA is more than $20 billion in debt because of the flood 
insurance program. Disaster spending often far outpaces the 
annual funding Congress provides, leading to the need for 
supplemental funding every year or so.
    FEMA has provided more than $40 billion in preparedness 
grants since 2001. These grants flow primarily to State and 
local agencies, who all too often seem to be using these funds 
for things they would never purchase with their own money, such 
as the 13 snow cone machines former Senator Coburn found were 
bought by some Michigan counties. Small communities are using 
these funds to buy armored vehicles.
    Local communities love Federal grants because they do not 
have to tax their local constituents to pay for the spending. 
The Federal Government simply hides the grants in the massive 
$19 trillion debt. For this reason we must be diligent in 
insisting that local communities' needs be largely paid for by 
local taxes.
    A significant amount of this spending is also duplicative 
of grants available from other departments, such as the $650 
million handed out to local police by the Department of Justice 
(DOJ) last year.
    I expect Inspector General Roth will give us much more 
insight into some of these problems today.
    I and my office hear a lot about FEMA from our 
constituents. The most frequent complaints are about flood 
maps. A neighbor of mine has a house out at the local lake, and 
his house is about, oh, I think it is 60 feet above the level 
of the dam. And yet FEMA's map has him in the flood plain and 
requires him to spend money on extra insurance even though it 
is hard to conceive how his house is going to flood when it is 
above the level of the dam that holds the water for the lake.
    I hear that the updated flood maps are not clear enough for 
county officials to make fully informed decisions. I hear that 
it takes far too long for counties to receive reimbursements 
for disaster recovery work. Perhaps if we were not buying 
Bearcat armored vehicles for local police forces, we might have 
more money to take care of some of these problems.
    I am eager to hear what our witnesses have to say, but I 
would certainly welcome any comments at this time from our 
Ranking Member, Senator Baldwin.

              OPENING STATEMENT OF SENATOR BALDWIN

    Senator Baldwin. Thank you, Chairman Paul, for working with 
me to hold this important hearing to examine the Federal 
Emergency Management Agency's efforts to assist States in 
preparing for terrorism and natural disasters. I would like to 
also thank our witnesses for being here today.
    We have learned from the attacks in Brussels, Paris, and 
San Bernardino that we face critical and evolving threats as a 
Nation. Not only do we face new risks of terrorism, we also 
face ongoing threats of natural disasters, including floods, 
hurricanes, and tornadoes.
    FEMA is charged with the critical role of ensuring that our 
first responders have the tools and resources they need to 
prevent, prepare for, and respond to all hazards.
    For nearly 40 years, FEMA has implemented robust programs 
to increase States' capabilities to protect against disasters. 
Notably, FEMA provides critical Federal preparedness grant 
funding as well as real-time training and exercises for first 
responders.
    I think all of our States--and, indeed, the country--have 
benefited from this critical assistance. However, as I have 
said in previous Subcommittee hearings, we must continually 
assess and evaluate our programs to ensure that we are 
addressing our Nation's priorities in the most efficient and 
effective manner possible.
    So thank you again for being here, Mr. Manning, to discuss 
ways that FEMA can continue to prepare first responders for new 
and emerging threats, as well as increase oversight of its 
programs.
    One area of particular importance to me and my home State 
of Wisconsin, and certainly many other States across the 
country, is the significant increase in the transportation of 
crude oil by rail. At a higher rate than ever before, we are 
seeing this volatile substance traveling in rail cars past 
homes, schools, and businesses.
    With increased volume comes increased risk, and last 
November, two trains carrying hazardous materials derailed in 
the State of Wisconsin, spilling hundreds of gallons of crude 
oil in one case and thousands of gallons of ethanol in another. 
Fortunately, nothing caught fire and nobody was hurt. However, 
in one of the instances, 35 families were evacuated from their 
homes.
    We have seen other derailments across the country, 
including in Illinois, West Virginia, North Dakota, Alabama, 
and Virginia just in the past year. These instances pose an 
immense threat to communities, people, and the environment.
    For example, this past weekend, a train derailed in 
Wauwatosa, Wisconsin. No one was hurt, and these train cars 
were not carrying hazardous material. But it is not enough to 
rely on luck, and we have to have sufficient plans in place to 
respond to derailments, including the worst-case scenarios.
    Now, I am proud to have included a number of provisions in 
the recently passed highway bill to improve first responder 
access to information about these trains, and it is really 
critical that the Department of Transportation (DOT) implement 
the reforms as soon as possible. However, we must do more to 
address this significant security concern, and it is why I 
requested that the Inspector General audit whether the 
Department of Homeland Security has established sufficient 
plans and coordination efforts to effectively respond to and 
recover from railway accidents involving hazardous materials. I 
look forward to the results of that audit and to hearing from 
our witnesses about what more we can do to respond to this 
emerging threat.
    I am also concerned by a recent Department of Homeland 
Security Office of Inspector General (OIG) report that found 
that FEMA has not adequately analyzed recurring Office of 
Inspector General recommendations to implement permanent 
changes to improve oversight of the Homeland Security Grant 
Program (HSGP). Specifically, the IG found that while FEMA 
tracks specific audit recommendations on a State-by-State 
basis, FEMA has not proactively analyzed its audits to discover 
trends, engage in root-cause analysis, and implement corrective 
action over the entire program.
    Like the IG, I am concerned that States could be repeating 
the same mistakes and that we run the risk of money not being 
spent for its intended purpose.
    Similarly, I am concerned about a GAO report that found 
FEMA does not comprehensively collect or monitor the status of 
corrective actions made by Federal departments that participate 
in national-level exercises. While FEMA has made progress in 
addressing this issue, more needs to be done to track 
corrective action to ensure that FEMA has an up-to-date outlook 
of national preparedness.
    I look forward to hearing from you, Mr. Manning, on how 
FEMA plans to improve oversight of the Homeland Security Grant 
Program and track the status of corrective actions made by 
Federal departments.
    And I want to again thank Chairman Paul for providing us 
this opportunity to discuss these important issues and our 
witnesses for taking part in the discussion. It is my hope that 
when we leave here today, we have concrete ways to improve 
preparedness efforts for first responders, strengthen oversight 
of the FEMA programs, and deliver our Nation's priorities in 
the most efficient and effective ways possible.
    Thank you.
    Senator Paul. Thank you.
    Our first witness today will be Mr. Timothy Manning from 
FEMA. Mr. Manning is the Deputy Administrator for FEMA for 
Protection and National Preparedness. Before his confirmation, 
he was head of the New Mexico Department of Homeland Security 
and prior to that, worked in a number of other emergency 
management and first responder capacities at the State and 
local level.
    Mr. Manning, thank you for your testimony today.

     TESTIMONY OF THE HONORABLE TIMOTHY MANNING,\1\ DEPUTY 
 ADMINISTRATOR, PROTECTION AND NATIONAL PREPAREDNESS, FEDERAL 
   EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Manning. Thank you, Mr. Chairman, Ranking Member 
Baldwin, Members of the Committee. Thank you for the 
opportunity to speak with you today about how FEMA supports 
States in preparing for terrorism and natural disasters.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Manning appears in the Appendix 
on page 29.
---------------------------------------------------------------------------
    As a former first responder at the local and State level, I 
can assure you that we at FEMA remain committed to ensuring 
that our citizens and first responders have the tools they need 
to be prepared for the full range of threats and hazards. In 
the past year alone, the United States has experienced historic 
drought, malicious cyber attacks, extensive flooding, 
widespread wildland fires, mass shootings in Chattanooga, 
Tennessee, and San Bernardino, California, along with numerous 
other events. And the tragic events recently in Paris and 
Brussels show how important it is for us as a Nation to be 
ready to prevent, protect against, respond to, and recover from 
complex, coordinated terrorist attacks.
    With such a wide-ranging array of threats and hazards, we 
must work together to leverage all of our collective resources 
at every level of government in order to achieve our goal of a 
secure and resilient Nation.
    With that in mind, I would like to tell you about some of 
the things we are doing to address these challenges.
    FEMA is working with every State and large urban area to 
identify their specific risks, set outcome-based targets, and 
assess their capabilities. They identify remaining gaps in 
their capability, which then drive investments across their 
jurisdiction and grants, but in local resources and in mutual 
aid planning. This ensures that FEMA's grant funds go to the 
most critical priority areas.
    In 2015, FEMA provided $1.6 billion in preparedness grant 
funds to address priority capability gaps. We analyzed State 
grant information alongside risk and capability data to ensure 
that grant dollars are being used effectively to enhance 
preparedness.
    In addition to providing grant funds, the Agency works to 
help fill capability gaps through our training, exercise, and 
technical assistance programs. These programs aid first 
responders and emergency managers across the protection, 
prevention, mitigation, response, and recovery mission areas.
    In 2015 alone, FEMA achieved over 2 million course 
completions across all of our training programs, which include 
the Center for Domestic Preparedness in Anniston, Alabama; the 
Emergency Management Institute and the U.S. National Fire 
Academy in Emmitsburg, Maryland; and our partnerships with the 
National Domestic Preparedness Consortium, the Center for 
Homeland Defense and Security; and our Continuing Training 
Grant (CTG) partners, such as the Rural Domestic Preparedness 
Consortium in Somerset, Kentucky.
    We provide courses ranging from online introductory level 
to highly specialized hands-on training for responders in fire, 
medical, and other disciplines, including the only federally 
chartered weapons of mass destruction training in the Nation.
    As risks and threats continue to evolve, we must adapt our 
programs to meet those most pressing needs. FEMA continues to 
prepare for complex coordinated terrorist attacks, working with 
State and local jurisdictions, the Federal Bureau of 
Investigations (FBI), and private sector partners to assist 
communities through a series of counterterrorism awareness 
workshops, where participants from multiple disciplines discuss 
and analyze capabilities required to respond to an attack 
involving a coordinated assault against multiple targets. They 
work through scenarios to identify gaps in their current plans 
and capabilities and develop mitigation strategies. To date, we 
have delivered 23 workshops with participation from more than 
5,000 responders and officials, most recently in St. Louis, 
Missouri.
    Another example of how FEMA's preparedness programs adapt 
to address emerging threats relates to the exponential increase 
in the domestic rail shipment of crude oil since 2008, which 
has resulted in an increased threat of spills, explosions, and 
other incidents. FEMA collaborated with the 48 contiguous 
States, the Department of Transportation (U.S. DOT), the 
Environmental Protection Agency (EPA), and other components of 
the Department of Homeland Security to define the biggest 
capability gaps related to crude oil incidents. This allowed us 
to efficiently target Federal resources to the most critical 
needs.
    FEMA offers multiple hands-on and virtual training 
opportunities related to hazardous materials and crude 
incidents through partnership with the Transportation 
Technology Center in Pueblo, Colorado, as well as training on 
the information materials from the Center for Domestic 
Preparedness in Anniston.
    FEMA also worked with the U.S. DOT, the Coast Guard, and 
EPA to design and deliver an exercise series known as 
``Operation Safe Delivery,'' specifically addressing crude oil 
incidents. In total, nearly 1,500 responders from around the 
country participated in either a training or exercise related 
to crude oil incidents in 2015.
    We also recognize that past events are not an accurate way 
to assess future risks. FEMA uses a capability-based approach 
to target resources so that jurisdictions around the country 
will be able to handle a wide range of incidents. We are 
currently analyzing the 2015 risk and capability data gathered 
from our State partners, and we will use that information to 
drive future decisions on training, exercise, and technical 
assistance, ensuring that we are effectively using our 
resources to target the highest priority needs. We look forward 
to working with you all to that end.
    Thank you again for the opportunity to testify, and I look 
forward to any questions the Committee may have.
    Senator Paul. Thank you.
    Our second witness is Mr. John Roth, the Inspector General 
of the Department of Homeland Security. Mr. Roth was confirmed 
in 2014 after 2 years of service as the Director of the Office 
of Criminal Investigations for the Food and Drug Administration 
(FDA). Prior to his work at the FDA, he served with distinction 
for some 25 years at the Department of Justice in assignments 
ranging from counter-narcotics to disrupting terrorist 
financing and in places ranging from eastern Michigan to Paris, 
France.
    Thank you for taking the time for your testimony today.

  TESTIMONY OF THE HONORABLE JOHN ROTH,\1\ INSPECTOR GENERAL, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Roth. Good afternoon, Chairman Paul, Ranking Member 
Baldwin, and Members of the Subcommittee.\1\ Thank you for 
inviting me here to testify today. My testimony today will 
discuss our audit work with regard to FEMA preparedness grants.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Roth appears in the Appendix on 
page 38.
---------------------------------------------------------------------------
    FEMA Homeland Security Grant Programs assist States in 
preparation for terrorist attacks, major disasters, and other 
emergencies. FEMA is responsible for partnering with States to 
coordinate grants, training, and exercise to help ensure 
preparedness. These grant programs fund a range of preparedness 
activities, including planning, organization, equipment 
purchases, training, exercise, and management and 
administration.
    From fiscal years (FY) 2009 to 2014, FEMA allocated $7.6 
billion in these grant funds to assist grantees in achieving 
program goals. We have completed audits of FEMA grants in 58 
States and territories. In most instances, with some notable 
exceptions, the grantees administered the grants effectively in 
conformance with Federal law. However, as with any large, 
diverse program, we continue to identify issues in awarding and 
expenditure, monitoring, and management of the grants. The 
issues we have found are best described in five categories.
    First, poor development of metrics. We found that many 
States did not develop fully measurable and achievable goals 
and objectives. Rather, they had many broad-based goals and 
objectives, with no timelines for completion and few concrete 
measures to determine if the goals and objectives were met.
    Second, incomplete or non-existent State assessments of 
risks and capabilities. To help make smart decisions on how 
best to use their grant funds, States need to do a better job 
of annually assessing the unique risks to preparedness they 
face and develop appropriate capability targets to address 
them. FEMA, in turn, needs to make sure that it reviews the 
State assessments for accuracy and completeness.
    Third, untimely obligation of funds. We found numerous 
instances of FEMA awarding grants, but then the States delaying 
in distributing the money to the recipient of the grant. We 
have had a number of instances in which months and sometimes 
over a year would pass before the States awarded the funds to 
the subgrantees.
    Fourth, insufficient management controls. States are 
required to monitor subgrantees' activities to ensure 
compliance with applicable Federal requirements. However, we 
have found a number of instances in which the State had not 
adequately managed the grant process, leading to a lack of 
assurance that the funds were being spent wisely.
    Last, improper expenditures. Our audits have found examples 
of improper expenditures. These grants are awarded so that 
States and local agencies can prevent, prepare for, protect 
against, and respond to acts of terrorism, major disasters, and 
other emergencies. However, we found that grant funds were not 
always spent for their intended purposes or well supported.
    While FEMA has worked to improve its grant processes and 
oversight, our audits continue to find the same issues in State 
after State. Of our 490 audit recommendations resulting from 
these 58 audits of States and territories, 91 percent of the 
recommendations identified similar challenges year after year.
    Notwithstanding this, FEMA had not taken the lessons from 
our audits to create a systemic and institutional change in the 
manner in which it oversees the program. FEMA simply tracks 
specific audit recommendations but has not taken the extra step 
of proactively analyzing the audits to discover trends, engage 
in a root-cause analysis, and implement corrective action over 
the entire program rather than State by State. Thus, FEMA and 
the States are repeating the same mistakes over and over again, 
and we cannot be assured that the money is being spent 
appropriately.
    FEMA resolved only 4 of the 333 recommendations related to 
program oversight--less than 2 percent--through permanent 
changes to the Homeland Security Grant Program. This shows a 
troubling lack of commitment to program oversight.
    Given the risks and expense of the Department's FEMA 
preparedness grants, we have continued our audit efforts in 
this area. For example, we recently conducted a risk-based 
analysis to determine the highest priority grantees for our 
next round of grant audits.
    Fortunately, FEMA has agreed to develop and implement a 
comprehensive plan for conducting an ongoing analysis of 
recurring audit recommendations. This plan will include clearly 
delineated roles and responsibilities along with policies and 
procedures for determining trends and systemwide problems, as 
well as recommending solutions to improve oversight of grant 
programs. It expects to complete this plan by December 2016.
    Mr. Chairman, this concludes my prepared statement. I 
welcome any questions you or other members of the Subcommittee 
may have.
    Senator Paul. Thank you.
    Our third witness is Mr. Chris Currie from the Government 
Accountability Office. Mr. Currie is the Director of Emergency 
Management, National Preparedness, and Critical Infrastructure 
Protection for the Homeland Security and Justice Team at GAO.
    Thank you for your testimony.

TESTIMONY OF CHRIS CURRIE,\1\ DIRECTOR OF EMERGENCY MANAGEMENT, 
NATIONAL PREPAREDNESS, AND CRITICAL INFRASTRUCTURE PROTECTION, 
      HOMELAND SECURITY AND JUSTICE TEAM, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Currie. Thank you, Chairman Paul, Ranking Member 
Baldwin, other Members of the Committee today. It is an honor 
to be here to talk about GAO's work on national preparedness. I 
think it is important to first talk about the progress FEMA has 
made over the last decade.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Currie appears in the Appendix on 
page 50.
---------------------------------------------------------------------------
    Before 2006, FEMA was not responsible for national 
preparedness. The Post-Katrina Act of 2006 changed that. It 
gave FEMA several broad responsibilities in this area: first 
was to implement the National Preparedness System across all 
levels of government; second was to assess the capabilities and 
preparedness of State and local partners; and third was to 
manage and provide all of the Department of Homeland Security 
preparedness grants to these partners.
    Now, progress across these areas has been mixed. FEMA has 
made progress in establishing the structures necessary to 
coordinate preparedness across Federal departments. For 
example, FEMA re-issued the National Response Framework in 
2013. This set up the 15 emergency support functions (ESFs), 
that deliver response capabilities and designated a lead 
Federal department as coordinator for each ESF as well.
    To test these functions, FEMA has conducted numerous 
exercises to identify capability gaps and identify lessons 
learned from real-world disasters. Challenges still exist in 
this area, though.
    FEMA cannot direct other Federal departments' preparedness 
efforts or resources. It relies on coordination to do that. For 
example, FEMA coordinates national exercises, but we found that 
other agencies do not always report back on actions they took 
to close the gaps identified during these exercises, as Senator 
Baldwin mentioned in her opening statement.
    We also found that ESF coordinating agencies like DOT 
lacked guidance from FEMA on what actions they were supposed to 
take to demonstrate preparedness. We recommended that FEMA 
better track these open corrective actions and provide guidance 
to other departments to help them in their respective areas. 
Now, FEMA has implemented some of the recommendations and is 
taking steps to close the rest of them.
    Now, switching to preparedness grants, the story has not 
been quite as positive. First, we found a risk of duplication 
and a need for better coordination across these preparedness 
grants. These grants share similar goals, they fund similar 
projects, and they sometimes provide funds to the same 
grantees.
    To be fair, in some ways they were designed this way, but 
we found that FEMA lacks the data and the controls to review 
and compare grant applications across programs which risks 
unnecessary duplication. We recommended that FEMA collect more 
information to fix the problem.
    FEMA has taken some steps to temporarily patch this problem 
with updates to its current grant management system. However, 
the Agency's long-term solution to this problem really hinges 
on full implementation of its new Non-Disaster Grant Management 
System. However, this system has been delayed for years and is 
now not expected to be in full use until sometime next year. As 
a result, our recommendation likely will not be addressed 
anytime soon.
    I would also like to talk about assessing State and local 
capabilities and measuring the impact of grants. Mr. Roth 
talked about this as well. It is true it is difficult to 
measure preparedness and assess capabilities, but it is not 
impossible. And with over $40 billion provided since 9/11, it 
is also very important.
    FEMA has taken steps to assess capabilities such as 
requiring States to complete annual preparedness reports and 
rolling these all up into one big yearly national preparedness 
report. It has also developed a tool that States can use to 
assess their risks and capability needs. These are good steps 
since States are in the best position to assess their needs and 
risks. However, when it comes to allocating the grants, FEMA 
relies on States to self-report their capability requirements 
and level of preparedness rather than a quantitative standard 
across jurisdictions. This makes it difficult to ensure that 
data are both accurate and comparable across States. It also 
makes it difficult to ensure grants go to the areas of greatest 
need across the country.
    We have recommended that FEMA complete a more quantitative 
national preparedness assessment of these capability gaps at 
each level and direct grant funding accordingly. However, FEMA 
disagrees with this approach and does not plan to address this 
recommendation as we have written it.
    This completes my prepared remarks. I would be happy to 
answer any questions you have.
    Senator Baldwin. I would like to introduce our last witness 
this afternoon. John Drake is Deputy Administrator of the 
Pipeline and Hazardous Materials Safety Administration (PHMSA), 
at the U.S. Department of Transportation. In his work as Deputy 
Administrator, Mr. Drake helps protect people and the 
environment by advancing the safe transportation of hazardous 
materials. PHMSA regulates the operation of 2.6 million miles 
of gas and liquid pipelines and 1 million daily shipments of 
hazardous materials by land, sea, and air.
    Before joining PHMSA, Mr. Drake served as the Deputy 
Assistant Secretary for Transportation Policy at the U.S. 
Department of Transportation where he oversaw policy 
implementation with a specific focus on freight, surface 
reauthorization, and safety policy. Mr. Drake also worked as 
the Director of Governmental Affairs at the Federal Motor 
Carrier Safety Administration.
    Before joining the U.S. Department of Transportation, John 
Drake was a Capitol Hill staffer for nearly a decade, working 
on the Senate Committee on Commerce, Science, and 
Transportation and the House Committee on Transportation and 
Infrastructure. He holds a bachelor's degree in philosophy from 
the University of California at Santa Cruz.
    Thank you so much for being here. We look forward to your 
testimony.

TESTIMONY OF JOHN DRAKE,\1\ DEPUTY ADMINISTRATOR, PIPELINE AND 
 HAZARDOUS MATERIALS SAFETY ADMINISTRATION, U.S. DEPARTMENT OF 
                         TRANSPORTATION

    Mr. Drake. Thank you, ma'am, and good afternoon. Chairman 
Paul, Ranking Member Baldwin, and Members of the Subcommittee, 
thank you for inviting me to testify before you today on the 
Pipeline and Hazardous Materials Safety Administration's 
efforts to ensure the safe and reliable transport of hazardous 
materials by rail and prepare first responders for emergency 
incidents involving derailments.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Drake appears in the Appendix on 
page 68.
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    Every day, more than 6 million tons of energy products and 
other hazardous materials move across our Nation. Many of these 
materials, like lithium batteries, pesticides, fertilizers, 
gasoline, and cleaning products, are essential components to 
our daily lives. But an unplanned release of any one of these 
materials can have deadly consequences to our communities and 
cause unacceptable harm to our environment. That is why it is 
the mission of PHMSA to advance the safe transportation of 
energy and other hazardous materials.
    In recent years, PHMSA, along with the Department of 
Transportation, has been focused on the significant increase in 
the amount of crude oil being transported by rail. This 
increase has affected communities along rail lines in many 
ways--from increased traffic at grade crossings to concerns 
about leaks, spills, derailments, and other incidents. Further, 
these oil trains are also carrying larger volumes of crude oil 
per train than ever before.
    Safety is the Department of Transportation's top priority. 
That is why we have taken more than 30 actions over the last 2 
years to ensure the safe transportation of crude oil. Most 
recently, PHMSA, working in coordination with the Federal 
Railroad Administration, issued a comprehensive rule that 
adopted new requirements designed to reduce the consequences 
and help reduce the probability of accidents involving trains 
transporting large quantities of flammable liquids, like 
petroleum and ethanol products. These new requirements cover 
everything from approved tank car design to new operational 
requirements, including speed requirements, braking systems, 
and routing.
    This work builds on this agency's previous actions to help 
ensure that communities and emergency responders are prepared 
in the event of a derailment. For example, we work closely with 
local law enforcement, emergency responders, and hazardous 
material professionals to share information and support their 
efforts to prepare for and respond to incidents involving 
hazardous materials.
    We also have a grants program that provides approximately 
$28 million per year to States, tribes, and emergency 
responders to help prepare for and respond to hazardous 
material incidents, including pipeline spills and train 
derailments. These grants support critical training for 
emergency responders and other hazardous materials 
professionals who may be called on to respond to an incident.
    We also recently released a document called the 
Transporation Rail Incident Preparedness and Response (TRIPR), 
which is a training document that is a free resource developed 
in coordination with FEMA and other public safety agencies at 
the State and local level that leverages the expertise of 
responders and operators to help better prepare first 
responders to safely manage hazmat incidents.
    Other collaborative emergency training efforts include 
PHMSA's work with FEMA and the U.S. Fire Administration to 
develop Guidelines for Public Sector Hazardous Materials 
Training that establish the most current standards to improve 
the quality and comprehensiveness of hazmat training for local 
and State first responders.
    We also work with Canada and Mexico to prepare the 
Emergency Response Guidebook, the go-to manual for first 
responders that is essentially the first and primary document 
that they will use in responding to a hazmat release.
    Finally, we are grateful for the support to our mission 
provided in the recently enacted FAST Act. This act provides 
provisions that validate many of our most recent actions and 
support to improve the safety of oil trains and also includes 
new provisions that will help us better prepare communities 
going forward. We are working aggressively to implement these 
provisions.
    Keeping communities safe requires constant vigilance, a 
comprehensive approach to safety, and an openness to the use of 
new technology. We look forward to working with you all and the 
other Members of Congress to continue to advance our important 
safety mission and ensure America's communities are well 
prepared to deal with emergencies involving hazmat.
    Thank you again for inviting me to appear, and I look 
forward to your questions.
    Senator Paul. Thank you all.
    Mr. Manning, in the Inspector General's testimony, he 
reports that FEMA only resolved 4 of the 333 recommendations 
related to program oversight, less than 2 percent, through 
permanent changes. His conclusion is that this shows a 
troubling lack of commitment to program oversight. Your 
response?
    Mr. Manning. Thank you, Mr. Chairman. I think I would 
respectfully disagree with my colleague from the Office of 
Inspector General. We have made a great deal more changes to 
programmatic design. The entire development of the National 
Preparedness System, and the elements that with the grants are 
designed to achieve were all made with the intent of addressing 
issues that have recurred through audit findings and through 
technical assistance and working with our partners at State and 
local governments with the grantees.
    While maybe four major changes have been made to the 
funding announcements to the grant document, a great deal of 
the findings come, I believe, from matters of training with the 
grantees, a matter of interaction with the grants management 
staff at the grantee level, and we have carried out a great 
number of technical assistance visits and interactions with the 
grantees to account for those issues and to continue to change 
the way we do technical assistance through really all of those 
programs.
    Senator Paul. Is there a way to objectively measure whether 
or not we are achieving our goal or whether or not we are 
wasting less money, Mr. Roth.
    Mr. Roth. It is difficult to do that given the nature of 
the enterprise or the exercise that they are conducting. What 
FEMA has done is put together a process in which they attempt 
to measure what the gaps in the preparedness are and what the 
States can do to meet those gaps. And I know GAO, for example, 
has done some work with regard to that as well.
    Senator Paul. Mr. Currie, you mentioned in your testimony 
that you believe that there did not seem to be an indication 
that FEMA was interested in the reforms. Do you have a 
suggestion for how we would have FEMA become more interested in 
the reforms?
    Mr. Currie. You are talking about the assessment of 
capabilities.
    Senator Paul. Right.
    Mr. Currie. We have been talking with FEMA about this for 
years, and in some ways part of what they are doing is part of, 
I think, a system that we think would work effectively. You 
start at the State and local level. You assess the risks. You 
see what their capability needs are, and then you work your way 
up to some sort of quantitative measure across jurisdictions so 
you can see where the capability gaps are and then give out the 
money accordingly.
    I think one of the things that we have found is that there 
is a lot of reliance on the States' own self-reporting of their 
risks. And as Mr. Roth's work has shown, in looking down into 
the grants, sometimes those risk assessments are not done 
completely and are not identified. So we are not sure how you 
can allocate the money based on risks if those things are not 
identified.
    Senator Paul. Mr. Roth, do you believe that any of the 
money through the grant system is supplanting sort of the 
ordinary costs that police and firemen do and somehow they are 
becoming dependent on that for things that maybe should be 
raised through local taxes?
    Mr. Roth. We certainly have found examples of that in a 
number of the audits that we have conducted, that once you sort 
of dive in and look at what the money was actually spent on, it 
was not justified as part of the grant program. For example, 
overtime for police officers in certain jurisdictions was not 
there to protect critical infrastructure, which would have been 
a permitted cost, but, rather, overtime for other ordinary 
kinds of things. Likewise with asset purchases, many times the 
asset purchases would have a law enforcement utility to it but 
not a preparedness function.
    Senator Paul. Right. I guess the problem is--and I think 
you are all sincere in trying to eliminate waste. I do not 
think anybody is trying to waste the taxpayers' money, so I do 
not question sincerity, but I see this waste throughout 
government. We have a waste report we put out every week. We 
find it everywhere. Every department has got it. And then we 
find people who say, ``Well, we are going to root out military 
waste, but we are going to give the military $100 billion more 
in money.'' I frankly think you are not rooting out any waste 
unless there are limited, finite resources. So if I am the 
mayor of a city of a million people, I only have a certain 
amount of money, so I have to prioritize it. So I am better at 
ferreting out waste because I have an incentive, and I think 
that is part of our problem with government as a whole, is that 
we really do not feel like we have finite resources. And we 
say, well, it is for homeland security so we give more money, 
or it is for emergency management and we give more money. And I 
think maybe it is restricting the amount of money in order to 
find the waste, and then maybe we would listen to those who are 
talking to us about waste because we would have a finite amount 
of money.
    I have another question for Mr. Manning. The government has 
been paying for some of these Stingray cell towers. Are you 
still doing that with FEMA money?
    Mr. Manning. Yes, sir.
    Senator Paul. Do you know how many?
    Mr. Manning. My information is that since the beginning of 
the grants program, 10.
    Senator Paul. OK. A lot of us who are concerned about 
privacy are worried about, watching people and following them 
without warrants. The Maryland Special Court of Appeals ruled 
that people have a reasonable expectation that their cell 
phones will not be used as a real-time tracking device by law 
enforcement. I think the Federal Government has gone in a 
positive direction in that you are only using warrants. It is 
my understanding that local government is still able to use 
these without a warrant. And like many things that were 
intended for terrorism, they wind up being used for all kinds 
of other petty crimes.
    Is there anything that FEMA is doing to protect the civil 
liberties of those from local law enforcement using these 
devices without warrants?
    Mr. Manning. Mr. Chairman, in regards to these particular 
pieces of equipment, they are on the authorized equipment list 
that we have developed with law enforcement and the Department 
of Justice. Their legal use is the responsibility of the law 
enforcement agency that acquires them with the grant, and they 
are subject to the provisions and oversight of the Department 
of Justice. It is their responsibility to use any equipment 
obtained under these grants legally and consistent with 
Department of Justice civil liberties regulations. Where we 
find instances where that has not been the case--we have not in 
the matter of this equipment--we can require them to pay all 
that money back on top of whatever punitive actions the Justice 
Department----
    Senator Paul. I guess the determination would be what is 
legal and what is not legal.
    Mr. Manning. That is correct, sir.
    Senator Paul. The Federal Government decided that, 
according to this one court opinion, it is not, and they are 
not doing it, but it is still left open for local law 
enforcement to do this without warrants. And I think since we 
are using Federal money, there would be no reason why the 
administration could not actually demand that of local law 
enforcement since we are paying for it with Federal money.
    Mr. Manning. Mr. Chairman, that is an interesting 
suggestion, and the matter of the legal use of the equipment is 
one of the Department of Justice, but I will contact my 
colleagues in the Department of Justice and----
    Senator Paul. We will look at it from the legislative 
perspective, but I would appreciate it if you would look at it 
simply from the administrative perspective because it could be 
something--the decision for Federal officers to get warrants 
was done simply unilaterally by the administration. I think 
this could be done as well. And if you would just give us an 
answer from our office, I would appreciate it.
    Senator Paul. Senator Baldwin.
    Senator Baldwin. Thank you.
    Mr. Drake, again, thank you for being here today. As you 
noted in your testimony, there have been significant increases 
in the number of trains carrying crude oil and other hazardous 
materials. I certainly hear a lot from constituents who are 
along the railways that cross Wisconsin.
    As I mentioned in my opening statement, I was proud to 
author a provision in the highway bill that ensures local first 
responders have real-time information when hazardous materials 
are going to be traveling through their communities in their 
jurisdictions of responsibility.
    So you had mentioned in your testimony that PHMSA will 
publish a Notice of Proposed Rulemaking to address this mandate 
in July. And as you know, the FAST Act gives the Department of 
Transportation a year to issue this regulation, so I want to 
ask if you are confident that you will meet the December 
deadline.
    Mr. Drake. Thank you for the question, ma'am. So a lot of 
the work that we have done up-to-date currently has been in 
working with FEMA and other stakeholders involved in trying to 
map out the framework by which this proposed regulation will be 
written. And so at this point in time, my answer to you is, 
yes, we feel confident that we are going to be able to meet the 
December timeline.
    Senator Baldwin. OK. The highway bill also directs the U.S. 
Department of Transportation to implement rules requiring 
railroads to improve their worst-case oil discharge response 
plans as soon as possible. DOT first issued a notice on 
revisions to comprehensive oil spill response plan requirements 
in 2014, and in your testimony you state that PHMSA estimates 
the agency will publish a draft Notice of Proposed Rulemaking 
in June 2016.
    Can you please let me know when we can expect a final rule 
on oil spill response plans for high-hazard flammable trains 
(HHFT)?
    Mr. Drake. So there is currently a regulatory proposal that 
is under review at the Office of Information and Regulatory 
Affairs (OIRA). It is an interagency review, and I think there 
may be some confusion in the testimony I submitted, and if so, 
I apologize. But in 2014, we issued a Notice of Proposed 
Rulemaking (NPRM) looking at the appropriateness of expanding 
the oil spill response plans for the railroad industry. That 
proposal is currently under review with OIRA. They have 
approximately 90 days to review it, and then I hope that we 
should have something out very soon afterwards. But this is 
something that we started along with the HHFT rule, and it is 
something that is very important for us getting done.
    Senator Baldwin. Thank you.
    In your testimony you also discussed that PHMSA is working 
with FEMA to implement and maintain support systems to help 
State and local training offices improve the quality of 
training, including needs assessment and testing. So I would 
like you to elaborate, if you can, on the needs assessments 
that FEMA and PHMSA are working with the States on. What 
specifically goes into those assessments? And how are they 
followed up on?
    Mr. Drake. We do a lot of coordination work with FEMA 
specifically on the hazardous materials release side of things. 
A lot of the materials that we develop, a lot of the 
preparedness planning that we do is done in coordination with 
FEMA because oftentimes they do play a very important role in 
our efforts.
    To your question specifically, there are a number of 
products that we have put forward, for example, the pipeline 
accident spill response plan, also this new document, the 
Transportation Rail Incident Preparedness and Response (TRIPR) 
training resource as well, that is developed very much in 
coordination with them. And the idea there is to provide as 
best we can specific tools and resources that help first 
responders better act and better respond to hazmat releases.
    Senator Baldwin. OK. Mr. Manning, as you know, FEMA serves 
as the coordination and policy agency in response to train 
incidents involving hazardous materials. As I understand it, 
FEMA is currently finalizing its Oil and Chemical Incident 
Annex to the operation, response, and recovery plan to further 
clarify responsibilities in this area. Can you discuss this 
annex and the date you expect it to be complete?
    Mr. Manning. Yes, Senator. The annex is an annex to the 
Federal Interagency Operations Plan, which is a document 
subordinate to the National Response Framework, and these are 
documents that describe how the Federal Government comes 
together to deliver assistance to a Governor when they would 
request it in times of emergency. These plans are executed by 
FEMA, drafted by FEMA on behalf of the interagency, so they are 
a governmentwide plan.
    This particular document is in its last stages of review on 
comments received across the interagency. I do not have a hard 
date, but we expect it very shortly, I would expect maybe in 
the next few weeks, certainly within the month, as I 
understand.
    Senator Baldwin. Within the month, thank you.
    I appreciate the training that FEMA provides to first 
responders. That is why I remain concerned about significant 
proposed cuts to FEMA's preparedness programs in the 
President's Fiscal Year 2017 budget request, particularly a 63-
percent cut to the National Domestic Preparedness Consortium.
    You mentioned this program specifically in your testimony 
as an important component of our preparedness efforts, and as 
you know, this consortium funds the crude by rail training 
program.
    How does FEMA plan to address this gap in training if the 
President's request ends up being enacted?
    Mr. Manning. Well, Senator, the President's 2017 budget 
request reflects difficult decisions, balancing priorities 
across the entire homeland security enterprise. Their training 
regime across the entire homeland security world, with our 
close partners in the National Domestic Preparedness 
Consortium, as you mentioned, but we also have a number of 
other partners and assets between the Center for Domestic 
Preparedness (CDP) and our continuing training grant 
applicants, and a great number of partners in State and local 
governments who are increasingly using grant resources from 
other programs you have heard of before earlier today to do 
more training.
    Just in the last few years, for example, the Transportation 
Technology Center (TTCI), has run 856 people through their 
crude oil training. CDP has had an additional 300 students 
through their crude oil-specific training. The Center, based in 
Kentucky, has had more than 8,000 people go through rail 
training, and the International Association of Fire Fighters 
(IAFF), for example, with grants that they received from us 
have done almost 6,000 offerings of hazardous materials 
training as well.
    We are constantly balancing the requirements against all 
different threats and hazards across the country. You have 
heard a number of references to capability gaps. In our 
evaluation of capability gaps, we look at capability as a 
combination of the people, training to do a job, and the 
equipment to do that job. And when we evaluate those capability 
gaps, it may be the right number of people and the right amount 
of equipment, but the wrong training. So we focus resources on 
getting additional seats available for people to get trained in 
a particular subject matter.
    Other areas, there may be the right number of people in 
training, but they are absent equipment, so we focus the grants 
on particular lines of equipment to build that capability.
    So as we continue to work with these difficult decisions 
across balancing funding priorities, we have to continue to use 
the tools that we have developed through this National 
Preparedness System to apply the resources where we think we 
can get the most effective and most efficient use of those 
funds.
    Senator Paul. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman, and thank you 
for including me in this hearing although I do not sit on this 
Subcommittee, but this is a topic that is near and dear to my 
heart. I want to point out, Mr. Manning, North Dakota was the 
site of a spectacular oil train fire. The first responders 
there were, in fact, volunteers, and our fire chief, Tim 
McLean, when I asked him what was the single most important 
kind of training that you had, he said the preparedness 
training that was done by FEMA.
    I think that when we are looking especially with an 
interstate carrier--and I am sensitive to the Chairman's 
comments about what is the Federal role and what is the State 
role. But as a former tax collector, I know that I ran into the 
4R's Act. You probably do not know much about it, but it 
greatly restricted how States could, in fact, tax railroads and 
other kind of common carriers, whether pipelines or railroads. 
And my point is that they did that because they wanted a system 
of interstate carriers, and they knew that this was a role 
under the Interstate Commerce Clause. But it also means that if 
you are going to restrict the funding sources, you may have to 
rethink, as you said, your tough choices.
    I share Senator Baldwin's concern that this training that 
Chief McLean talked about, which was so critical to his ability 
to respond in a way that not only protected his community but 
protected the lives of his firefighters, is something that is 
on the chopping block, especially in the context of an 
interstate carrier.
    And so I just want to tell you that I have a lot of 
concerns about a budget proposal that does not adequately fund 
these grant programs, and we are going to be fighting pretty 
hard to make sure that especially as it relates to the movement 
of hazardous material in interstate commerce, that the Federal 
Government sees their role a little differently.
    I want to raise an issue that I have been raising since I 
have been here. I probably come to it a little honestly given 
that my father was a volunteer fire chief in a small community 
for about 25 years. The vast majority of land in the United 
States is covered by a volunteer fire force. In fact, in North 
Dakota, about 96 percent of all firefighters are volunteers who 
do not get paid a dime. But we do not want them untrained 
either. What they do is hazardous.
    I want to make sure that we have the tools that we need. 
Some of those tools are these grants, and I am concerned, as 
Deputy Secretary Mayorkas heard, in my State that these 
programs are difficult for volunteers to navigate. And I am 
wondering either for you, Mr. Manning, or you, Mr. Currie, if 
you could respond to how you could fashion a grant program, 
provided we still have it, that could take some of these high 
administrative costs--frequently in these small grants, the 
money does not go where it belongs, in part because you guys 
are holding them accountable, and we applaud that, the two 
gentlemen in the middle [referring to Mr. Roth and Mr. Currie]; 
but we do see high administrative costs, high costs to apply 
for the grants, low dollar amounts, which then get spread out 
over services in a much narrower fashion.
    So I am wondering whether you guys are looking at what you 
can do for the rural firefighters to make those grants more 
accessible.
    Mr. Manning. Thank you, Senator. I myself was a volunteer 
firefighter for most of my life, actually, before I came to 
Washington, and I am very cognizant of how difficult it can be 
to interact with State and Federal Government requirements on a 
part-time basis, manage that nights and weekends on top of a 
full-time job. And that said, as you rightly pointed out, we 
have a responsibility at FEMA and in the Federal Government to 
ensure that grant money is being used appropriately and we are 
reducing or eliminating any possible waste or duplication.
    But we are absolutely committed to making the programs as 
efficient and easy as possible while balancing those needs and 
those requirements. We are constantly evaluating all of our 
policy, the promulgation of new rules and policy and grant 
applications and the grant processing and the things like the 
Biannual Strategy Implementation Reports (BSIRs) and all of the 
reporting things you have to do with getting a grant, with how 
can that be done by somebody, potentially, in the wee hours of 
the morning, on an old computer, with maybe a poor Internet 
connection. It would be very easy to just have a system where 
everybody, just kind of interacts online, but the reality is 
most fire departments in the United States and most emergency 
management organizations and most communities do not have that 
infrastructure.
    So we are absolutely committed to balancing both the 
oversight requirement and making sure that we appropriately 
adjudicate all of the audit findings and the things that our 
colleagues find when they are doing site visits with the 
efficiency with which the grantees can interact with us in 
those matters.
    Senator Heitkamp. I think many times for the smaller 
agencies, it becomes a non-starter, and as a result, we see old 
equipment, unless the community steps up, as many communities 
in my State have, to provide the resources. But we should all 
be thinking about what the fire service looks like into the 
future, because we are seeing fewer and fewer volunteers 
stepping up. We are seeing fewer and fewer folks willing to, 
leave their work or they do not work where the fire service is 
in their community. And this is going to be a challenge going 
forward, and if we reduce the training support that we receive 
from FEMA and from PHMSA, if we reduce the incentives--because 
no one is going to want to fight a fire without training, or 
they should not want to fight a fire without training--we will 
be jeopardizing kind of a critical piece of infrastructure in 
this country that we have relied on for a lot of years.
    I want to thank the Chairman and the Ranking Member for 
holding this hearing, and put on everybody's agenda the 
volunteer fire service and the challenges that we have. The 
vast majority of area in this country is covered by a volunteer 
fire service, and if we are going to continue to maintain that 
critical first response, we are going to need to work together 
to fashion opportunities for the future.
    Thank you, Mr. Chairman.
    Senator Paul. Thank you, and we will ask a few more 
questions and wind up here.
    We have so much waste throughout government. I have a great 
deal of admiration for the Inspectors General and the GAO to 
look at the waste, but I find that it continues and that I do 
not see a lot of connection to actual reform, that we actually 
fix things. For years now, watchdogs have said that there is as 
much as $10 billion worth of duplicate spending in government, 
and yet it continues.
    I get back to sort of what I said earlier. Is there really 
a mechanism by which we can enforce reform and actually make it 
work? Do you have suggestions on how we would fix government 
from the standpoint of getting those who are watching over 
government to actually get policy implemented? Why don't we 
start with you, Mr. Roth?
    Mr. Roth. Thank you for that. One of the things that we 
have found in the course of doing a number of these audits with 
FEMA is that we will make a finding of questioned costs, for 
example, against a subgrantee. The FEMA Administrator has the 
ability to waive our finding, basically not go against the 
State or the locality to recollect the money that was misspent. 
We think that authority is being used in a fashion that really 
is counterproductive in that the States and the localities 
really have no incentive to spend the money correctly. So we 
will find an instance, for example, where a bid was not put out 
for competitive bidding, for example, it was a sole-source 
contract or was a contract where it was cost plus a percentage 
of cost that was simply let. And, when you do not have the 
money at stake, it is, frankly, quite easy to do that. So we 
will make a finding----
    Senator Paul. Would you say this is common across agencies 
then, not just FEMA? Are there other agencies that have the 
same kind of waiver system for making either mistakes on no-bid 
contracts or overpaying for something or paying for something 
that was inappropriate? Would that be a bigger problem than 
just with FEMA?
    Mr. Roth. Well, certainly in the grant area, I think it is 
a significant problem.
    Senator Paul. OK.
    Mr. Roth. And, again, I was speaking directly about the 
Administrator's authority to simply waive those costs and those 
findings. But, certainly, in our other sort of acquisition 
work, we have found those kinds of things to be problematic, 
although I will have to say that DHS as an entity is improving 
in those areas. For example, sole-source contracts for DHS have 
actually decreased over time in a fairly significant way.
    Senator Paul. Mr. Currie.
    Mr. Currie. Yes, sir. In general, I think part of the 
problem is a lot of these problems are so large and complex and 
they are not easy to fix. It is not that folks do not want to 
fix them. And I will give an example.
    When FEMA was given all of the preparedness grants that 
used to be scattered throughout DHS after 2006, it had to 
figure out how it was going to manage all these, and it did not 
have the information technology (IT) systems to do that. So one 
of the things we found, obviously, is that they do not have a 
way to review across grant applications because they were all 
separate grant programs. And so implementing a new system is 
challenging, it is expensive, and it is complex.
    But because of that, these issues require sustained, long-
term oversight and attention, and that is one of the things we 
have seen in our work. It is not until it is said over and over 
and over again and the Congress says it over and over and over 
again, and an agency starts paying attention to it and 
dedicating resources and effort to it that oftentimes it 
changes. But it does not happen quickly, and I think this is a 
good example.
    Senator Paul. Right. I like the idea on the waivers, and 
when you finish up your reports and you do it, do you come up 
with conclusions like that on legislative ways? Or is that not 
your mandate, legislative ways to fix problems?
    Mr. Roth. We typically do not. We recommend certain things 
to the Department because that is our oversight capability. 
Sometimes we will recommend that the Department try to get 
legislative fixes, but it is largely mostly recommendations to 
the Department to change the way they operate.
    Senator Paul. Mr. Manning, do you have a comment on the 
waiver idea?
    Mr. Manning. Well, Senator, I think that we use the waiver 
judiciously and appropriately. When we are made aware of 
examples from the IG or become aware on our own accord of 
matters of intentional or malicious--or fraud or waste or where 
there are cases where regulations were flaunted by a grantee, 
we recoup those funds. We have many examples of when we do 
that, probably more often than when we waive them. The example 
I heard I believe is probably from the public assistance 
program where there is more contracting in disaster rebuilding 
programs. In those cases, it is a much more complicated web of 
authorities and responsibilities and grantees and subgrantee 
relationships. I would be happy to speak with the IG on 
specific examples, but there are many that we go back and forth 
on, absolutely.
    But I want to say that we are absolutely committed to 
adjudicating audit findings as they come along. The 596 
recommendations you heard referenced earlier, we have closed 93 
percent of those. We were focused on closing those audit 
findings as they came up over the course of the 9 years of 
those audits that led to that number. Along the way we made 
programmatic changes. We continually make programmatic changes 
to both the training to the grantees on how to carry out the 
Federal requirements and the way the regulations are 
structured, but also the way the larger government policies 
that are being carried out by these grants are structured to 
make them more easily achieved by the grantees, to make the 
audit findings fewer. Absolutely committed.
    Senator Paul. Are either of the Inspectors General or those 
who are auditing aware of recent instances where there have 
been inspections that have been done where we have actually 
gone forward with legislative overhaul and significantly used 
your recommendations to actually reform any agency?
    Mr. Roth. We have in a number of areas, for example--and 
this is one just off the top of my head--radio 
interoperability. DHS did not have the ability, the 
subcomponents within DHS, to talk to each other on a common 
radio channel, notwithstanding the fact that one of the reasons 
that DHS exists is to, in fact, have that unity of effort.
    We have done two separate audits of those. The first audit 
showed a 99.8-percent failure rate in the ability to talk to 
each other. Two years later, we came and saw that the situation 
was not particularly improved. As a result of that, legislation 
was passed at the end of last year mandating essentially 
congressional reports, so enhanced oversight by Congress, as 
well as specific guideposts to try to get toward 
interoperability.
    Senator Paul. Thank you, and thank you to the panel. 
Senator Baldwin.
    Senator Baldwin. I have a question regarding metrics and 
standards. FEMA obviously is the Federal leader in assessing 
our Nation's capability to respond to disasters, and it is 
vital that FEMA have end-to-end standards and metrics and 
assessments for how actions taken by Federal, State, and local 
partners contribute to the National Preparedness Goal (NPG).
    I think you did a good job, Mr. Manning, in your testimony 
of laying out the threat and risk assessment that FEMA requires 
States to conduct as the State and national preparedness 
reports that come from those assessments. However, I want to 
make sure that we are continuously evaluating the metrics and 
that we have in place, to make sure that we are always making 
progress toward our National Preparedness Goal.
    So I want to start actually with you, Mr. Currie. In your 
assessment, how effectively has FEMA integrated grant program 
metrics with its evaluation of progress toward the National 
Preparedness Goal? And what recommendations specifically would 
you have for FEMA to improve its metrics structure?
    Mr. Currie. Well, one of the things that we have found is 
most of the metrics are what we would call output-based metrics 
versus the real outcome measures, and FEMA would probably 
debate that point. But output meaning we gave money to this and 
this jurisdiction, we know this jurisdiction purchased this, it 
was on the improved products list.
    Now, I think there has been some effort from FEMA to try to 
tie those purchases and those investment justifications and 
grant applications to the core capabilities, those 32 core 
capabilities. But as I mentioned before, a lot of that is based 
on self-reported information and self-reported assessments by 
the State, which is not a bad thing. The State is in a good 
position to assess their own capabilities.
    I think what we would like to see and what we have not seen 
so far is a more quantitative assessment by capability of each 
level so we can compare that across jurisdictions so we know 
when we have to give out $1.6 billion across the whole country 
that we are giving it out to the areas where we need the 
capabilities the most.
    Senator Baldwin. Mr. Roth, I know you may not have looked 
into this issue specifically, given the timeframe of your 
audits. But if you do have information generally, how would you 
assess FEMA's overall metrics structure?
    Mr. Roth. We have not done that. What we have done really 
was take a look at the States, the grantees. What were their 
metrics? That is a requirement of the grant program to 
understand sort of what does success look like, how do you 
measure it, how do you get there. It has to be specific, time-
bound, achievable, those kinds of things. And what we found 
almost universally is that the metrics that the States were 
using were none of those things, and FEMA had not been 
enforcing those kinds of metrics. So that is the only thing 
that we looked at. I know that we tried to separate some of our 
duties to not overlap.
    Senator Baldwin. Avoiding duplication is a worthy goal.
    Mr. Manning, do you think there is room for FEMA to improve 
its metrics? If so, how? And, again, I am specifically 
referring to metrics for FEMA's individual programs and metrics 
for how those programs feed into the National Preparedness 
Goal.
    Mr. Manning. Thank you, Senator, and I can start with 
saying that, with a temporal caveat, I do not disagree with 
anything my colleagues here said. They are describing a 
situation that I think is accurate circa 2009 into 2010, which 
is why we developed the system that is put in place, this 
National Preparedness System where we are trying to achieve the 
goal.
    There was no policy linkage between the outputs that the 
grants were achieving. States had individual homeland security 
strategies. Each State had a strategic plan for what they were 
trying to achieve. But there was no national overarching kind 
of arc over all of those. You had 56 different strategies for 
the States, territories, and the District. And there was no 
linkage, and you could not compare.
    Separately, there were national preparedness programs; 
there were things like the Target Capability List where there 
was an idea, as suggested by Mr. Currie, where there is a 
common set of metrics: Every jurisdiction should be able to do 
this much hazardous materials response, and everybody was 
working toward that.
    The problem was they were divorced. There was no linkage 
between the two. The grants were allowed to be used to achieve 
those target capabilities--this X number of resources--but it 
was not specific to the jurisdiction. So to Senator Heitkamp's 
examples earlier, we would expect the same of a small community 
in North Dakota that we would of New York City or Chicago by 
that formulation of kind of standard targets.
    So we developed an interconnected National Preparedness 
System, one of the goals being the capabilities that we use to 
define these things. Then the National Incident Management 
System is the language. Those are the words we use to commonly 
describe the resources across the country. And then the 
frameworks and the grants are kind of how we put those 
together. So this threat hazard identification process, the 
Threat and Hazard Identification and Risk Assessment (THIRA) 
that you hear so much about, that notion is that we know that 
risk does not aggregate across the country. We cannot look at 
the individual risk to Wisconsin and Michigan and Kentucky and 
Missouri and North Dakota and say here is the national risk. 
Those are individual risks. There is a different strategic 
level of risk to the Nation. But the capabilities do aggregate. 
Resources aggregate. So if we can look at what is important, 
what is valuable, what is the highest level of risk, the 
greatest threat to a community, and help that community build, 
that is the outcome we are trying to achieve, using the 
resources, the people, the training, the equipment, and time it 
takes to do it, that they can do a job in a certain amount of 
time against the threats that they have, that is this whole 
system--I am happy to provide more detail--then we can look at 
the Nation, what we have achieved, and we can aggregate those 
capabilities and apply them anywhere. We can take mutual aid 
resources--by ``we,'' I mean the Nation--from the west coast to 
the east coast, from Florida to North Dakota. We can come 
together as a Nation, leverage what we have built with these 
programs. No one jurisdiction will ever have enough. There is 
not enough money to ever build enough capability to deal with 
everybody's worst day. But we as a Nation can come together to 
deliver those resources, and that is the system we have put in 
place, and those are the outcomes that we are trying to 
achieve.
    Senator Baldwin. Thank you.
    Senator Paul. I had one final question. Is there a formal, 
oral, in-person presentation of inspector reports to the agency 
that you are inspecting?
    Mr. Roth. It is a process, but, yes, the answer is yes. We 
will have an entrance conference where we will sort of discuss 
with them what it is that we are going to try to do. During the 
course of the audit, we will have constant communication with 
the agency or the component that is involved. At the end of it, 
there will be what we call an exit conference in which we 
describe what it is that we find and discuss what the potential 
recommendations would be. Then we write a draft report, which 
then goes to the component, and the component will take a look 
at it and decide whether or not it is factually accurate and 
whether our recommendations make sense and whether they are 
going to accept those recommendations or not.
    That then gets turned into a final report, which is issued, 
given to Congress, and made public.
    Senator Paul. So the agency actually will respond in 
writing to your findings?
    Mr. Roth. Correct.
    Senator Paul. And so you present it to the head of FEMA. 
The head of FEMA will hear an oral presentation on your 
findings or----
    Mr. Roth. Typically not the head of FEMA. It is typically 
somebody who is a subject matter expert within sort of whatever 
component that we are looking at. I do brief the Secretary and 
the Deputy Secretary on our significant reports, and I 
typically try to have regular meetings with the component heads 
to discuss what work we are doing.
    Senator Paul. Right. And what is, I guess, your impression, 
either of you or any of you really, on--I understand it 
probably has to be somewhat adversarial because you have to be 
independent. In the end, does it always end up that way? Or is 
there a collaboration in trying to fix the problems based on 
the reports?
    Mr. Roth. Well, what we try to do is balance engagement and 
independence. So we will always be independent, and what I 
always say is that I am of no use if I am not independent. That 
is the whole purpose behind my existence.
    That being said, we want to be able to work with the 
component, listen to the component, understand exactly what the 
challenges are before we make the recommendations, because it 
does not do anybody any good to have a recommendation that will 
be rejected out of hand by the component. But there is lots of 
disagreement, as you can imagine there would be. But we think 
that is an appropriate sort of level of engagement.
    Senator Paul. OK. I think we have learned a lot from it, 
and thank you all for your testimony.
    The record for this hearing will remain open until 5 p.m., 
Tuesday, April 26, for any Members who wish to submit 
additional questions. And with that, the hearing is adjourned. 
Thank you very much, panel.
    [Whereupon, at 4:16 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

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