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. 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 This legislation provided approximately $29 billion to 20 federal agencies and also rescinded approximately $23.4 billion from the $60 billion appropriated to FEMA’s Disaster Relief Fund in September 2005.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. 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. 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. 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.