Disaster Relief: Governmentwide Framework Needed to Collect and Consolidate Information to Report on Billions in Federal Funding for the 2005 Gulf Coast Hurricanes
Published: 2006-09-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Hurricane Katrina devastated the Gulf Coast region of the United States and caused billions of dollars in damage. Hurricanes Rita and Wilma further exacerbated damage to the region. The Federal Emergency Management Agency (FEMA), within the Department of Homeland Security (DHS), was tasked with the primary role of managing the federal relief and recovery efforts. This review was performed under the Comptroller General's authority because of widespread congressional interest in the response to this disaster. GAO examined whether the federal government was adequately tracking and reporting on the use of the funding provided in the four emergency supplemental appropriations acts enacted as of June 2006. GAO analyzed the emergency supplemental appropriations acts and conference reports, reviewed FEMA's required weekly reports, and interviewed federal agency officials.
section_title: What GAO Found
paragraphs: FEMA's required weekly reports to the Appropriations Committees on the use of funds it received do not provide timely information from a governmentwide perspective because FEMA does not have a mechanism to report on the financial activity of the agencies performing work on its behalf. Specifically, when FEMA tasks another federal agency through a mission assignment, FEMA records the entire amount upfront as an obligation, whereas the performing agency does not record an obligation until a later date, thereby overstating reported governmentwide obligations. The opposite is true for expenditures. The performing agency expends the funds, but then bills FEMA for reimbursement. FEMA does not record the expenditure until it has received the bill and reviewed it, thereby understating reported governmentwide expenditures. As a result, while FEMA is reporting as required, from a governmentwide perspective, FEMA's reported obligations are overstated and expenditures are understated. The federal government also does not have a governmentwide framework or mechanisms in place to collect and consolidate information from the individual federal agencies that received emergency supplemental appropriations for hurricane relief and recovery efforts and report on this information. About $88 billion has been appropriated to 23 different federal agencies through four emergency supplemental appropriations acts; however, no one agency or central collection point exists to compile and report on how these funds are being spent. Decision makers need this consolidated information to determine how much federal funding has been spent and by whom, whether more may be needed, or whether too much has been provided. The ability to separately track and report on these funds is important to help ensure better accountability and clearly identify the status of funding provided in direct response to these hurricanes at both the individual federal agency level as well as the governmentwide level. Also, it is important to provide additional transparency so that hurricane victims, affected states, as well as American taxpayers, know how these funds are being spent.

section_title: Letter
paragraphs: Hurricane Katrina struck the Gulf Coast of the United States on   August 29, 2005. It devastated the region and caused billions of dollars in  damage. The hurricane affected about 1.5 million people located within  approximately 90,000 square miles spanning Louisiana, Mississippi, and  Alabama, and was the worst natural disaster in our nation’s history in  geographic scope, extent and severity of destruction and damage, and the  number of persons displaced from their homes. Shortly after Hurricane  Katrina made landfall, Hurricanes Rita and Wilma followed, further  exacerbating damage to the Gulf Coast region. In response to these events,  the Congress has provided nearly $88 billion for relief and recovery  through four emergency supplemental appropriations acts through the end  of June 2006.
As part of its mission under the Robert T. Stafford Disaster Relief and  Emergency Assistance Act (Stafford Act), as reflected in the National  Response Plan (NRP), the Federal Emergency Management Agency  (FEMA), within the Department of Homeland Security (DHS), was tasked  with the primary role of managing the federal relief and recovery efforts  within the affected region. The first emergency supplemental  appropriation act was enacted 4 days after Hurricane Katrina struck the  Gulf Coast and provided over $10 billion. The second emergency  supplemental appropriation act was enacted 6 days after the first  emergency supplemental appropriation act and provided significantly  more funding—$50 billion—to FEMA for its Disaster Relief Fund and  required the Secretary of Homeland Security to provide weekly reports to  the Committees on Appropriations detailing the allocation and obligation  of these amounts. The Congress later called for FEMA to also report on  expenditures over $50 million, among other information.
In creating these reporting requirements, the Congress sent a clear  message that it wanted to know how these funds were being spent and  have updated information on a weekly basis. These reports are publicly  available and at the time of this report were being posted to the House  Committee on Appropriations website. In December 2005, when the  Congress rescinded $23.4 billion from FEMA’s Disaster Relief Fund, FEMA  had obligated about $25 billion, or 42 percent, of the $60 billion it received  in the first two emergency supplemental appropriations. With this  rescission, the Congress distributed the funds as direct appropriations to  other federal agencies. As of June 2006, approximately $88 billion has been  provided to 23 federal agencies for the relief work through four  emergency supplemental appropriations acts.
We currently have a large body of ongoing work to address preparation,  response, recovery, and rebuilding efforts related to the hurricanes that  devastated the Gulf Coast region. Due to widespread congressional  interest in these subjects, our work is being completed under the  Comptroller General’s authority to conduct evaluations on his own  initiative. Topics of reports already issued include (1) contract  management; (2) accounting for international assistance; (3) the adequacy  of internal controls to prevent fraud and abuse; and (4) the military’s  response to catastrophic natural disasters. We are sending you this report  on the tracking of hurricane relief funding because of your interest in and  responsibility for oversight of matters related to the hurricane relief and  recovery efforts. Our work focused on the funds designated for hurricane  relief and recovery in the four emergency supplemental appropriations  acts enacted as of June 2006. Our objective was to determine whether the  federal government was adequately tracking and reporting on the use of  this funding. To accomplish this objective, we reviewed the four  emergency supplemental acts to determine which federal agencies were  receiving appropriations, how much each was receiving, what the funds  were intended for, and whether any reporting requirements were  specified. Because the second supplemental, which provided $50 billion to  FEMA, required FEMA to report to the Committees on Appropriations on  a weekly basis on the use of these funds, we reviewed FEMA’s weekly  reports to determine whether the information provided was timely and  useful. We limited our review of these reports to certain aspects of them  that have governmentwide implications. Specifically, our review of  FEMA’s weekly reports focused on the obligations and expenditures  reported for mission assignments that were issued to agencies performing  disaster relief work related to the Gulf Coast hurricanes on behalf of  FEMA. The obligation and expenditure information we present in this  report was obtained from FEMA and certain other federal agencies. To  assess the reliability of the data, we interviewed officials knowledgeable  about the data included in the reports and what the data represented, and  determined that the data were sufficiently reliable for the purposes of this  report. Additional details on our scope and methodology are presented in  appendix I. We conducted our work from October 2005 through June 2006  in accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: On August 29, 2005, Hurricane Katrina devastated the Gulf Coast region,  causing human casualties and billions of dollars in damage. During major  disasters such as this, the Stafford Act authorizes the federal government  to assist in saving lives, reducing human suffering, mitigating the effects of  lost income, and helping repair or rebuild certain damaged facilities. As of  June 2006, nearly $88 billion was appropriated by the Congress through  four emergency supplemental appropriations for relief and recovery  efforts related to the recent Gulf Coast hurricanes. FEMA, the DHS  component statutorily charged with administering the provisions of the  Stafford Act, uses appropriations made to the Stafford Act’s Disaster  Relief Fund to assist relief and recovery efforts.
subsections: section_title: Funding Provided for the Hurricane Relief Effort
paragraphs: Initially, in September 2005, the Congress appropriated $62.3 billion for the  response and recovery effort related to Hurricane Katrina in two  emergency supplemental appropriations acts. Of that amount, (1) FEMA  received $60 billion for the Disaster Relief Fund, (2) DOD received   $1.9 billion, and (3) the Army Corps of Engineers (COE), a DOD agency,  received $400 million. As of late December 2005, FEMA reported that it  had obligated about $25 billion, or 42 percent, of the $60 billion it had  received. In December 2005, the Congress provided additional funds for  the recovery effort related to the 2005 Gulf Coast hurricanes through a  third emergency supplemental appropriation act. This legislation  provided approximately $29 billion to 20 federal agencies and also  rescinded approximately $23.4 billion from the $60 billion appropriated to  FEMA’s Disaster Relief Fund in September 2005. The third emergency  supplemental appropriation resulted in a net increase of about $5.5 billion  in total direct federal funding for hurricane relief and recovery and the  fourth resulted in a net increase of approximately $20.1 billion. Table 1  shows the agencies that received direct funding through the four  emergency supplemental appropriations acts.
section_title: FEMA Uses Federal Agencies to Provide Assistance on Its Behalf
paragraphs: FEMA has authority under the Stafford Act to issue an order, called a  mission assignment, to other federal agencies. A mission assignment is a  tasking issued by FEMA that directs other federal agencies and  components of DHS, or “performing agencies,” to support overall federal  operations pursuant to, or in anticipation of, a Stafford Act declaration.  Once the mission assignment is issued and approved, the mission  assignment document is FEMA’s basis for obligating the portion of  FEMA’s funds allocated to the assigned relief and recovery effort. From a  federal agency standpoint, the mission assignment provides the recipient  agency reimbursable budgetary authority, not the actual transfer of funds,  to perform the agreed upon work. Among other things, mission  assignments include a description of work, an estimate of the dollar  amount of work to be performed, completion date for the work, and  authorizing signatures. Mission assignments may be issued for a variety of  tasks, such as search and rescue missions or debris removal, depending on  the performing agencies’ areas of expertise.
After the agencies perform work under a mission assignment (e.g.,  perform directly or pay a contractor), the agencies bill FEMA, and FEMA  reimburses them for the work performed using the Intra-Governmental  Payment and Collection (IPAC) system. In the case of an IPAC payment  to a performing agency, the IPAC funds transfer occurs immediately upon  request by the agency seeking reimbursement. After the IPAC is made,  FEMA requires that performing agencies provide it documentation  supporting the costs incurred while performing the work under the  mission assignment. FEMA can also reverse or “charge-back” the payment  if it believes the agency did not provide sufficient supporting  documentation. The funding and reimbursement process related to  mission assignments is shown in figure 1.
section_title: The Government Does Not Have a Framework in Place to Collect and Consolidate Information to Report on Hurricane-Related Funding
paragraphs: The federal government is not adequately tracking and reporting on the  use of the $88 billion in hurricane relief and recovery funds provided thus  far to 23 federal agencies in the four emergency supplemental  appropriations acts. First, FEMA does not have mechanisms in place to  collect and report on information from the other agencies that are  performing work on its behalf through mission assignments. As a result,  FEMA’s required weekly reports to the Congress have limited usefulness  from a governmentwide perspective. Second, also from a governmentwide  perspective, the federal government does not currently have a framework  or mechanisms in place to collect and consolidate information from the   22 federal agencies in addition to FEMA that have directly received  funding thus far for hurricane relief efforts and report on this information.  Although each federal agency is responsible for tracking the funds it  received, obligations incurred, and funds expended through it own internal  tracking systems, no mechanisms are in place to consolidate this  information. Therefore, it will be difficult for decision makers to  determine how much federal funding has been spent and by whom,  whether more may be needed, or whether too much was provided.
subsections: section_title: FEMA’s Required Reports Do Not Provide Adequate Information from a Governmentwide Perspective
paragraphs: FEMA is required to report weekly to the Appropriations Committees on  the use of funds it received; however, these reports do not provide timely  information from a governmentwide perspective because FEMA does not  have a mechanism in place to collect and report on information from other  agencies which perform work on its behalf. Specifically, when FEMA tasks  another agency through a mission assignment, which is similar to an  interagency agreement for goods and services, FEMA records the entire  amount upfront as an obligation on its reports to the Congress. The agency  performing the task for FEMA does not record an obligation until a later  date when it has actually obligated funds to carry out its mission, thereby  overstating reported governmentwide obligations. The opposite is true for  expenditures. The agency expends the funds, but then has to bill FEMA for  reimbursement. This may happen months after the actual payment is  made. FEMA does not record the expenditure on its reports to the  Congress until it has received the bill from the performing agency,  reviewed it, and recorded the expenditure in its accounting system,  thereby understating reported governmentwide expenditures.
FEMA’s weekly report as of March 29, 2006, shows that of the $36.6 billion  received as of that date, it had incurred obligations totaling $29.7 billion  and had made expenditures of $15.9 billion related to Hurricanes Katrina,  Rita, and Wilma. Of the $29.7 billion in obligations, FEMA issued mission  assignments to federal agencies totaling $8.5 billion, or 28.6 percent. The  other $21.2 billion includes, for example, obligations that FEMA made for  areas such as the individual and household program ($7.0 billion) and  manufactured housing ($4.7 billion), which are being reviewed in some  respects by other auditors. As of March 29, 2006, FEMA reported  approximately $8.5 billion of obligations for mission assignments and  approximately $661 million of expenditures for Hurricanes Katrina, Rita,  and Wilma as shown in table 2.
While FEMA reports obligations based on the dollar amount of the mission  assignments it has placed with other federal agencies when they are  assigned, these obligation amounts do not represent the amount of funds  that the agencies have, in turn, actually obligated to perform disaster relief  work on behalf of FEMA. In some cases, the agencies have obligated tens  or hundreds of millions of dollars less than the amount reported by FEMA.
Our analysis of FEMA’s reported mission assignments to other federal  agencies to perform work on behalf of FEMA in the amount of $8.5 billion  identified two types of reporting problems, both of which resulted in  FEMA’s obligations being overstated from a governmentwide perspective.  First, some federal agencies recorded obligations in their internal tracking  systems that were much less than the amount of obligations reported by  FEMA. This occurred because FEMA’s recorded obligations are based on  the dollar amount of the entire mission assignment. In contrast, the  amount of obligations recorded by federal agencies is the amount of funds  they actually obligated to perform disaster relief work. The performing  agency does not incur obligations until it actually performs or contracts  for the work. Four examples of this reporting problem follow:    On September 28, 2005, FEMA’s report showed that obligations on  mission assignments issued to DOD related to Hurricane Katrina  totaled about $2.2 billion. As of March 2006, this amount had been  substantially reduced twice. On November 3, 2005, FEMA amended the  mission assignment and reduced the amount to about $1.7 billion, and  it reduced the amount again on March 15, 2006, to about $1.1 billion.  While FEMA was reporting obligations as high as $2.2 billion during  this 6-month period, DOD’s reports show that it incurred only   $481 million of actual obligations as of April 5, 2006—hundreds of  millions of dollars less than what FEMA reported over the same   6-month period. According to a DOD official, it is currently reviewing  the mission assignments and will be returning obligational authority  that was not used to FEMA.
On September 28, 2005, FEMA’s report showed that obligations on  mission assignments issued to COE related to Hurricane Katrina were  about $3.3 billion. Since then, this amount has increased. On   October 20, 2005, FEMA amended and increased the mission  assignment amounts to about $3.7 billion and on April 5, 2006, to about  $4 billion. However, according to COE’s internal records as of   April 7, 2006, it had actually obligated about $3 billion for Hurricane  Katrina work, a difference of over $1 billion.
Based on information provided by the Coast Guard, FEMA had  recorded mission assignment obligations related to Hurricanes Katrina  and Rita in the amount of nearly $192 million as of April 2006.  However, at that time, the Coast Guard had only actually incurred  about $85 million in obligations. Thus, the difference between what  FEMA reported to the Congress and what Coast Guard information  showed it had actually obligated is approximately $107 million.
Based on information provided by the Department of Housing and  Urban Development (HUD), at the end of March 2006, FEMA had  obligated and reported approximately $83 million for HUD mission  assignments related to Hurricane Katrina. However, HUD had only  incurred about $47 million in obligations for work to be done under  mission assignments. While HUD may eventually utilize the full amount  obligated by FEMA, at that time, there was an approximately   $36 million difference between the amounts FEMA reported as  obligated for HUD and what HUD had actually obligated. HUD expects  final reconciliation to be completed by December 2006.
Second, at least three federal agencies we interviewed did not have  mission assignments recorded in their internal tracking systems that were  recorded in FEMA’s system. According to the officials from certain federal  agencies, this occurred because the agency’s financial management office  was not informed of the mission assignments. FEMA officials informed us  that this problem likely occurred because, while the agencies’ program  offices appropriately received mission assignment information from  FEMA, those agencies’ program offices did not properly provide the  information to their agencies’ financial management offices. Two  examples of this reporting problem follow:    At the Department of Health and Human Services, we noted $90 million  in mission assignment obligations related to Hurricane Katrina or  amendments to those obligations that were reported by FEMA as of  January 18, 2006, but not recorded by the department’s financial  management office as of February 24, 2006. The department told us  that these mission assignments or amendments had been issued by  FEMA, but had not been received by the department’s program or  financial management offices. After we pointed out the discrepancies,  the two agencies reconciled the differences.
In another case, the Environmental Protection Agency had a similar  situation involving $11.5 million in mission assignments and  amendments related to Hurricane Katrina for which it did not record  obligations as of March 2006 because the financial management office  was unaware the mission assignments had been made by FEMA.  According to the Environmental Protection Agency, for $10 million of  the $11.5 million in mission assignments, not only was the financial  management office unaware but the agency had never been informed  that the mission assignment had been issued by FEMA.
subsections: section_title: FEMA’s Reports Do Not Provide Adequate Information on Actual Expenditures Made by Other Federal Agencies
paragraphs: A different set of issues arises with regard to expenditure data. Because of  the nature and timing of payments FEMA makes to performing agencies,  FEMA’s reported expenditures from the Disaster Relief Fund do not  present an accurate status of federal spending for hurricane relief and  recovery from a governmentwide perspective. This is explained in part by  problems with the timeliness and adequacy of billings to FEMA by other  agencies. As previously explained, FEMA reimburses performing agencies  for work they perform on behalf of FEMA in accordance with the mission  assignment agreements. FEMA requires that performing agencies (1) bill it  within 90 days after completion or upon termination of a mission  assignment, and (2) provide a certain level of documentation for its review  in order for the billings to be approved. FEMA does not recognize  reimbursements to other agencies as expenditures in its accounting  system (and therefore in its reports to the Congress) until this approval  has occurred. From a governmentwide perspective, this process results in  FEMA’s expenditures being understated.
As of March 29, 2006, FEMA reported about $661 million of expenditures  to agencies performing mission assignments for Hurricanes Katrina, Rita,  and Wilma (see table 2). However, performing agencies’ internal tracking  systems showed a significantly higher level of expenditures on their  mission assignments. The process FEMA uses for reimbursing performing  agencies creates timing differences between FEMA’s and the performing  agencies’ records. As a result, FEMA’s reported expenditures are less than  actual expenditures performing agencies have made in support of FEMA’s  hurricane relief and recovery efforts. In the case of a mission assignment,  a performing agency would recognize an expenditure when that agency  pays costs (liquidates obligations) to employees, contractors, or other  outside entities for work performed. However, FEMA does not recognize  the reimbursement of these costs as an expenditure until it has reviewed  and approved a bill from the performing agency. With the exception of  COE, reimbursements to the performing agencies are made using the IPAC  system. While the IPAC funds transfer occurs immediately upon request by  the agency seeking reimbursement, in FEMA’s accounting records the  IPAC transaction would be reflected as a suspense account transaction  until FEMA has received and approved the supporting documentation for  the IPAC billing. Therefore, by virtue of the timing delays, FEMA’s  reported expenditures would be less than expenditures made and reported  by performing agencies and a user of FEMA’s report could incorrectly  infer that a particular agency has received tasks from FEMA but has not  spent any of the funds. Thus, the cost of actual work performed is better  reflected by the performing agencies. Two examples follow:    FEMA’s report as of March 29, 2006, showed that approved mission  assignment expenditures (cash reimbursements) related to Hurricane  Katrina were about $210 million for DOD. However, DOD’s report as of  April 5, 2006, showed that it had already received $324 million in  reimbursement from FEMA for mission assignments related to  Hurricane Katrina.
The U.S. Forest Service had not billed FEMA for any of its work done  under mission assignments even though the agency reported that it had  made close to $170 million in expenditures related to its Hurricane  Katrina mission assignments as of January 31, 2006. Accordingly,  FEMA reported no expenditures for this agency in its weekly report  since FEMA had not yet approved any billings. FEMA’s billing  instructions state that reimbursement requests can be forwarded to  FEMA monthly, regardless of the amount. Also, agencies should submit  the final bill no later than 90 days after completion or upon termination  of the mission assignment. The Forest Service, however, was not doing  this, and as a result, FEMA did not report any expenditures for mission  assignment work performed by the Forest Service as of March 29, 2006,  even though the Forest Service had spent about $170 million. The  Forest Service explained that it billed FEMA in March and June 2006  and planned to issue additional bills in August and September 2006. We  noted that there had been some billing activity reported by FEMA  subsequent to March 29, 2006.
Aside from the timing issues discussed above, some performing agencies  have not provided billing documentation that meets FEMA’s requirements  to support their reimbursements for work performed on mission  assignments. Although performing agencies using the IPAC system receive  funds immediately upon requesting reimbursement, if upon review of  supporting reimbursement documents, FEMA officials determine that  some amounts are incorrect or unsupported, FEMA may retrieve or  “charge back” the monies from these agencies through the IPAC system.  For example, travel charges should be supported by a breakdown by  object class with names, period of performance dates, and amounts.  Failure to submit this documentation may result in FEMA charging back  the agency for the related mission assignment billing. FEMA’s records as  of May 15, 2006, showed that FEMA had “charged back” about $267 million  from performing agencies for costs billed to FEMA for mission  assignments related to Hurricanes Katrina, Rita, and Wilma. About   $260 million, or over 97 percent, of these charge-backs involved five  agencies: the Department of Transportation ($102 million), DOD   ($57 million), the Environmental Protection Agency ($45 million), the  Federal Protective Service within DHS ($32 million), and the Department  of Health and Human Services ($24 million). Consistent with its practice of  only reporting approved expenditures, these amounts were not recognized  as expenditures by FEMA, even though the performing agencies claim they  have expended those amounts. In addition, until FEMA requested the  charge-backs, the billings would have been in a FEMA suspense account,  and would have temporarily depleted monies from the Disaster Relief  Fund since the agencies had already received reimbursement through the  IPAC system. At least one agency, DOD, has indicated that it is trying to  gather additional supporting documentation for the $57 million that FEMA  charged back. Therefore, at least part of these charged back funds may be  reported as expenditures by FEMA at some point in the future. If the  agency cannot provide FEMA the needed supporting documentation, the  agency may not be reimbursed and thus will be required to use its own  appropriations.
FEMA is also experiencing billing problems with COE, which does not use  the IPAC system. According to FEMA personnel, COE had billing and  documentation problems in the past and was not permitted to use the  IPAC system for transactions with DHS. While COE was working on  gaining access to using the IPAC system prior to Hurricane Katrina, this  process was put on hold, and instead COE must manually submit  supporting documentation before FEMA reimburses its mission  assignment costs. This allows for a thorough review by FEMA, but has also  led to payment delays. As of February 6, 2006, COE’s internal accounts  receivable report showed that it had not received reimbursement for about  $1.2 billion of bills submitted to FEMA for Hurricane Katrina mission  assignments even though COE officials stated that they had sent  documentation supporting the majority of the bills. Of that amount, about  $610 million, or over half of the total, was over 60 days old. According to  FEMA officials, as of April 7, 2006, it had not received documentation  supporting about $800 million of the $1.2 billion of outstanding accounts  receivable on COE’s records. None of the $1.2 billion has been reported as  expenditures by FEMA, although COE reports these amounts as  expenditures.
section_title: Lack of Framework to Collect and Consolidate Agency Data and Report on This Information Limits Ability to Assess Status of Hurricane Funding
paragraphs: From a governmentwide perspective, since Hurricane Katrina made  landfall, about $88 billion through four emergency supplemental  appropriations has been appropriated to 23 federal agencies. We found  that no one agency or central collection point exists to compile and report  on how these funds are being spent. Without a framework and  mechanisms in place to collect and consolidate information from these  agencies and report on a periodic basis, decision makers will not have  complete and consistent information on the uses of the funding that has  been provided thus far. Information on the amount of obligations and  expenditures made on the actual relief and recovery effort would provide  decision makers information they can use to determine, for example, if   (1) additional funds should be provided for the relief and recovery work,  (2) the funds already provided could be deemed excess and used for other  disaster relief and recovery work, (3) funds should be rescinded, or   (4) duplicate programs are providing similar assistance. As a result, in  order to have governmentwide information on actual obligations incurred  and expenditures made on the relief and recovery effort, the agencies  would have to use their own internal tracking systems to extract this  information and provide the information to a central point, where the data  could be consolidated and reported. The ability to separately track and  report on these funds is important to help ensure better accountability and  clearly identify the status of funding provided in direct response to these  hurricanes at both the individual federal agency level as well as the  governmentwide level and to provide additional transparency so that  hurricane victims, affected states, as well as American taxpayers, know  how the government is spending these funds. At the same time, we  recognize the substantial challenge in balancing the need to get money out  quickly to those who are actually in need and sustaining public confidence  in disaster programs by taking all possible steps to minimize fraud and  abuse.
Although each federal agency is responsible for tracking the funds it  received, obligations incurred, and funds expended through its own  internal tracking systems, no mechanisms are in place to consolidate and  report on this information. Of the approximately $88 billion provided as of  June 2006, FEMA received about $42.6 billion ($66 billion appropriated  less the $23.4 billion rescinded) for the Disaster Relief Fund and 22 other  agencies received the remaining $45.4 billion. Once these funds are  appropriated, they are merged into, and commingled with existing  appropriation accounts. OMB Circular No. A-11 requires agencies to  report obligations and outlays on a quarterly basis at the appropriation  level; however, those reports on budget execution and budgetary  resources do not call for separately identifying amounts on a  programmatic basis, such as hurricane relief and recovery efforts. Thus,  reporting under this Circular will not provide the information needed to  monitor the status of hurricane-related funding. Although FEMA was  required to provide weekly reports to the Congress on obligation and  expenditure information on the $42.6 billion it received (although with  limited usefulness as discussed previously), most of the other 22 agencies  that received over $45 billion would only be responsible for tracking this  information internally.
While there are some reporting requirements included in the emergency  supplemental appropriation acts, overall reporting requirements differ  greatly. Also, the reporting requirements do not call for consolidating  information on obligations and expenditures on a governmentwide basis  and, therefore, do not facilitate governmentwide reporting on hurricane- related spending. The reporting requirements that were included for the  various agencies ranged from very detailed reporting to no reporting at all.  For example, while FEMA was required to report obligations and  expenditures, 16 other federal agencies did not have any reporting  requirements. See appendix II for more information on the reporting  requirements included in the first four emergency supplemental  appropriations acts.
Given that consolidated governmentwide reporting will require that  financial information be compiled from 23 different agencies, an entity  that regularly collects and compiles information from different agencies,  such as OMB or the Department of the Treasury, would likely be in the  best position for requesting this information and preparing consolidated  governmentwide reporting on hurricane-related funding. Other options  would be for either FEMA or the Office of the Federal Coordinator for  Gulf Coast Rebuilding to compile this information.
section_title: Conclusions
paragraphs: Success in the rebuilding efforts of the Gulf Coast area is critical. The  federal government has already invested billions of dollars for this effort  with more likely to come. Although FEMA is required to report on  obligations and expenditures, these reports do not provide timely  information from a governmentwide perspective. In addition, there is no  framework or mechanisms in place to collect and consolidate information,  and to report on the $88 billion in hurricane relief and recovery funds  provided thus far to 23 federal agencies in the four emergency  supplemental appropriations acts on a governmentwide basis. The  government’s progress in the rebuilding efforts will be difficult to measure  if decision makers do not know how much has been spent, what for, how  much has been obligated but not yet spent, and how much more is still  available. Without consistent, reliable, and timely governmentwide  information on the use of this funding, the agencies and the Congress  could lose visibility over these funds and not know the extent to which  they are being used to support hurricane relief and recovery efforts. With  rebuilding efforts likely to take many years, it is important that the federal  government fulfill its role as steward of taxpayer funds and provide  transparency to the affected states and victims, and account for and report  on all funds received for the hurricane-related efforts.
section_title: Recommendations for Executive Action
paragraphs: To improve the information on the status of hurricane relief and recovery  funds provided in FEMA’s weekly reports to the Appropriations  Committees from a governmentwide perspective, we recommend that the  Secretary of Homeland Security direct the Director of FEMA to take the  following four actions:    Explain in the weekly reports how FEMA’s reported obligations and  expenditures for mission assignments do not reflect the status from a  governmentwide perspective.
On an established basis (e.g., monthly or quarterly), request and  include actual obligation and expenditure data from agencies  performing mission assignments.
Include in the weekly report amounts reimbursed to other agencies  that are in suspense because FEMA has not yet reviewed and approved  the documentation supporting the expenditures.
Reiterate to agencies performing mission assignments its policies on  (1) the detailed information required in supporting documentation for  reimbursements, and (2) the timeliness of agency billings.
To help ensure better accountability, provide additional transparency, and  clearly identify the status of the hurricane-related funding provided by  emergency supplemental appropriations at both the individual federal  agency level as well as the governmentwide level, we recommend that the  Director, Office of Management and Budget, establish a framework for  governmentwide reporting on the status of the hurricane-related funding.  OMB could either collect and consolidate this information itself or  designate another appropriate agency, such as the Department of the  Treasury, to do so and report to the Appropriations Committees on a  periodic basis.
section_title: Agency Comments and Our Evaluation
paragraphs: We requested comments on a draft of this report from the Secretary of  Homeland Security and the Director of OMB. These comments are  reprinted in appendixes III and IV, respectively. While DHS concurred with  our recommendations, it also stated that it believes our recommendation  to periodically request and include actual obligation and expenditure data  from agencies performing mission assignments is subsumed by our  recommendation to OMB to establish a framework for governmentwide  reporting on the status of hurricane-related funding. We believe our  recommendation is still valid for FEMA since, as stated in the agency’s  response, its mission assignments are a significant component in the  establishment of a framework for governmentwide reporting on the status  of hurricane-related funding. However, as the intent of our  recommendation is to help ensure the Congress is receiving complete,  timely, useful, and reliable reports, we agree that other alternatives could  be considered to achieve the same objectives. OMB agreed that there  should be clear accountability and transparency on the spending of  emergency funds for hurricane relief and indicated it will fully consider  our recommendation to establish a new framework for governmentwide  reporting on the status of disaster-related funding.
We also provided excerpts of the report to those agencies cited in  examples for their review. They provided technical comments, and we  made revisions as appropriate.
We are sending copies of this report to other interested congressional  committees and to affected federal agencies. Copies will be made available  to others upon request. In addition, this report will also be available at no  charge on GAO’s home page at http://www.gao.gov.
If you or your staff have any questions regarding this report, please  contact me at (202) 512-9095 or at williamsm1@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made contributions to this  report are listed in appendix V.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine whether the federal government was tracking and reporting  on the use of funding provided in the four emergency supplemental  appropriations acts, we obtained and analyzed the four emergency  supplemental appropriation documents and conference reports. We also  obtained the reports prepared by the Federal Emergency Management  Agency (FEMA) and the Army Corps of Engineers (COE) in response to  the second emergency supplemental appropriation act. We did not obtain  the reports required by the third or fourth emergency supplemental  appropriations acts since this was a new requirement for the federal  agencies. In addition, we obtained and analyzed guidance on reporting of  estimates of hurricane-related funding budget authority, outlays, and  receipts, issued by the Office of Management and Budget (OMB) in 2005  and discussed this guidance with officials from OMB.
To determine whether FEMA’s reports to the Appropriations Committees  required by the second emergency supplemental appropriation act  provided timely and useful information, we obtained and analyzed the  weekly reports prepared by FEMA, specifically focusing on the obligations  and expenditures reported for mission assignments to agencies performing  disaster relief work related to Hurricane Katrina on behalf of FEMA  because they have governmentwide implications. We met with FEMA  officials to discuss (1) the definitions of the terms obligations and  expenditures used in the report, (2) the process of FEMA issuing mission  assignments to agencies and the obligation of FEMA’s funds related to the  mission assignments, and (3) the process of agencies seeking  reimbursement for goods and services provided in response to the disaster  relief work including FEMA’s billing procedures. We also obtained and  analyzed certain federal agencies’ reports that provide information on  mission assignments, obligations incurred and expenditures made in  performing disaster relief work on behalf of FEMA, amount of bills  submitted to FEMA, and amount of bills paid by FEMA. Because the  majority of FEMA’s mission assignment obligations related to Hurricane  Katrina, we focused our review at the agencies on the Hurricane Katrina  mission assignments. We met with officials from certain federal agencies  to discuss the information contained in these reports.
In performing our work, we obtained information from the    OMB,    Department of the Treasury,    FEMA,    Department of Defense,    COE,    Department of Transportation,    Environmental Protection Agency,    Department of Health and Human Services,    U.S. Forest Service,    General Services Administration, and    Department of Housing and Urban Development.
To assess the reliability of the data, we interviewed officials  knowledgeable about the data and determined that the data were  sufficiently reliable for the purposes of this report. We conducted our  work from October 2005 through June 2006 in accordance with generally  accepted government auditing standards.
We provided a draft of this report to the Department of Homeland Security  (DHS) and OMB for comment. DHS and OMB provided written comments,  which are presented in the Agency Comments and Our Evaluation section  of this report and are reprinted in appendixes III and IV, respectively. We  also provided excerpts of the report to those agencies cited in examples  for their review. They provided technical comments, and we made  revisions as appropriate.
section_title: Appendix II: Reporting Requirements Included in the Four Emergency Supplemental Appropriations Acts
paragraphs: The four emergency supplemental appropriations acts enacted as of   June 2006 provided funds to 23 federal agencies for the hurricane relief  and recovery effort and included different reporting requirements. In  addition, of the 23 agencies receiving appropriations in the four emergency  supplemental appropriations acts, 16 agencies did not have any reporting  requirements.
The first two emergency supplemental appropriations acts provided  funding to the Federal Emergency Management Agency (FEMA),  Department of Defense (DOD), and Army Corps of Engineers (COE), and  included the following reporting requirements:    The first emergency supplemental appropriation act did not contain  any requirements for FEMA to report on the $10 billion it received. The  second emergency supplemental appropriation act required the  Secretary of Homeland Security to provide, at a minimum, a weekly  report to the Appropriations Committees detailing the allocation and  obligation of the $50 billion in appropriated funds it received for  Hurricane Katrina in the second emergency supplemental  appropriation act. The fiscal year 2006 Department of Homeland  Security Appropriations Act further explained that this weekly report  was to include other information such as obligations, allocations, and  expenditures, categorized by agency and state.
COE was not provided any funding in the first emergency supplemental  appropriation. The second emergency supplemental appropriation act  required COE to provide a weekly report to the Appropriations  Committees detailing the allocation and obligation of $400 million in  appropriated funds it received under that act.
There was no requirement for DOD to report on the $1.9 billion it  received in the first and second emergency supplemental  appropriations acts.
The third emergency supplemental appropriation act provided $29 billion  directly to 20 individual federal agencies and rescinded approximately  $23.4 billion from the amount initially appropriated to FEMA’s Disaster  Relief Fund in September 2005. The third emergency supplemental  appropriation act included differing reporting requirements for each of the  20 federal agencies ranging from none to very detailed. Illustrative  examples from the third emergency supplemental appropriation act and  the conference report accompanying this legislation include the following  specific reporting requirements:    The third emergency supplemental appropriation act required each  state receiving monies through the Community Development Fund  from the Department of Housing and Urban Development (HUD) to  report quarterly to the Appropriations Committees for all awards and  uses of funds. The supplemental appropriation language also required  some additional reporting from HUD, such as reporting quarterly to the  Appropriations Committees with regard to all steps taken to prevent  fraud and abuse of funds made available.
The conference report accompanying the third emergency  supplemental appropriation act directed the Secretary of Defense to  submit quarterly reports to the congressional defense committees  including, among other things, the expenditures of funds it received for  hurricane relief and recovery operations. This did not include  retroactive requirements for the first and second emergency  supplemental appropriations. The conference report also directed the  Secretary of Agriculture to provide quarterly reports including, among  other things, the expenditures of funds received for hurricane relief. It  also requested the Department of Education to submit a report by  March 1, 2006, on the obligation and allocation of funds it received for  hurricane relief and provided to assist college students under the  Higher Education Act. The reporting requirements for some agencies  were more detailed than others. Also, these reporting requirements do  not cover funding authority of approximately $8.5 billion that agencies  received through FEMA’s mission assignment process for Hurricanes  Katrina, Rita, and Wilma as of March 29, 2006.
The fourth emergency supplemental appropriation act provided  approximately $20.1 billion directly to 22 individual federal agencies. This  legislation did not include any new reporting requirements for the  agencies receiving funding; however, the act contained reporting  requirements for HUD that were consistent with the requirements outlined  in the third emergency supplemental appropriation act.
section_title: Appendix III: Comments from the Department of Homeland Security
section_title: Appendix IV: Comments from the Office of Management and Budget
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, the following individuals also  made significant contributions to this report: Christine Bonham, Richard  Cambosos, Thomas Dawson, Francine DelVecchio, Heather Dunahoo, Abe  Dymond, Gabrielle Fagan, Casey Keplinger, Stephen Lawrence, Greg  Pugnetti, Lori Ryza, and Natalie Schneider. Other contributions were made  by Felicia Brooks, Eric Essig, Lauren Fassler, Barry Grinnell, John Hong,  James Maziasz, Patrick McCray, Shalin Pathak, and Chanetta Reed.