1). 2). The flooding resulted in  widespread damage for some communities in these states. Scope and Methodology

To identify insights from past disasters we interviewed officials involved in  disaster recovery in the United States and Japan. See  figure 3 for the locations of the six disasters that we selected for this  review. Create a Clear, Implementable, and Timely Recovery Plan

After a major disaster, a recovery plan can provide state and local  governments with a valuable tool to document and communicate recovery  goals, decisions, and priorities. Clear recovery goals  can also help state and local governments prioritize projects, allocate  resources, and establish a basis for subsequent evaluations of the recovery  progress. 4). The recovery plans created by the Hyogo and Kobe governments after the  1995 earthquake also helped to facilitate the funding of recovery projects. Build State and Local Capacity for Recovery

Given the lead role that state and local governments play in disaster  recovery, their ability to act effectively directly affects how well  communities recover after a major disaster. However, state and local governments may need certain  capacities to effectively make use of this federal assistance, including  having financial resources and technical know-how. More specifically,  state and local governments are often required to match a portion of the  federal disaster assistance they receive. Following Hurricanes Ike and Gustav and the Midwest floods earlier this  year, building up these capacities may improve affected jurisdictions’  ability to navigate federal disaster programs. Enhance Local Financial Capacity

After a major disaster, state and local governments may not have adequate  financial capacity to perform many short- and long-term recovery  activities, such as continuing government operations and paying for  rebuilding projects. Soon after the 1997 Red River flood, the   state-owned Bank of North Dakota provided a line of credit totaling over  $44 million to the city of Grand Forks. Implement Strategies for Business Recovery

Business recovery is a key element of a community’s recovery after a  major disaster. Small businesses are especially vulnerable to these events  because they often lack resources to sustain physical losses and have little  ability to adjust to market changes. These strategies helped  businesses adapt to postdisaster market conditions, helped reduce  business relocation, and allowed businesses to borrow funds at lower  interest rates than would have been otherwise available. With funding from the city of Los  Angeles, the state of California, and the Small Business Administration,  VEDC provided guidance on obtaining federal and local governmental  financial assistance, as well as strategies for adjusting to changes in the  business environment. In  an effort to minimize relocations after the Red River flood, the city of  Grand Forks created incentives to encourage businesses to remain in the  community using funds from the Department of Housing and Urban  Development’s Community Development Block Grant program and the  Department of Commerce’s Economic Development Administration. In contrast, officials near Santa Cruz in the city of Watsonville did not  create such temporary locations after the Loma Prieta earthquake, and as  a result, businesses moved out of the downtown area to a newly  completed shopping center on the outskirts of the city. Adopt a Comprehensive Approach to Combating Fraud, Waste, and Abuse

The influx of federal financial assistance available to victims after a major  disaster provides increased opportunities for fraud, waste, and abuse. To help protect its residents from contractor fraud after the Red River  flood, the city of Grand Forks established a required credentialing  program for contractors. Similar to Grand Forks’  program, contractors who pass checks are issued photo identification  cards. Concluding Observations

While receiving millions of dollars in federal assistance, state and local  governments bear the main responsibility for helping communities cope  with the destruction left in the wake of major disasters. Appendix I: Selected GAO Products Related to Disaster Recovery

	Recovery from the 2005 Gulf Coast Hurricanes

Gulf Coast Rebuilding: Observations on Federal Financial Implications. Hurricane Katrina: Planning for and Management of Federal Disaster  Recovery Contracts. Hurricanes Katrina and Rita: Contracting for Response and Recovery  Efforts. GAO Work on Disaster Assistance. Earthquake Recovery: Staffing and Other Improvements Made Following  Loma Prieta Earthquake.
Why GAO Did This Study

This month, Hurricanes Ike and Gustav struck the Gulf Coast producing widespread damage and leading to federal major disaster declarations. Earlier this year, heavy flooding resulted in similar declarations in seven Midwest states. In response, federal agencies have provided millions of dollars in assistance to help with short- and long-term recovery. State and local governments bear the primary responsibility for recovery and have a great stake in its success. Experiences from past disasters may help them better prepare for the challenges of managing and implementing the complexities of disaster recovery. GAO was asked to identify insights from past disasters and share them with state and local officials undertaking recovery activities. GAO reviewed six past disasters-- the Loma Prieta earthquake in northern California (1989), Hurricane Andrew in south Florida (1992), the Northridge earthquake in Los Angeles, California (1994), the Kobe earthquake in Japan (1995), the Grand Forks/Red River flood in North Dakota and Minnesota (1997), and Hurricanes Katrina and Rita in the Gulf Coast (2005). GAO interviewed officials involved in the recovery from these disasters and experts on disaster recovery. GAO also reviewed relevant legislation, policies, and its previous work.

What GAO Found

While the federal government provides significant financial assistance after major disasters, state and local governments play the lead role in disaster recovery. As affected jurisdictions recover from the recent hurricanes and floods, experiences from past disasters can provide insights into potential good practices. Drawing on experiences from six major disasters that occurred from 1989 to 2005, GAO identified the following selected insights: (1) Create a clear, implementable, and timely recovery plan. Effective recovery plans provide a road map for recovery. For example, within 6 months of the 1995 earthquake in Japan, the city of Kobe created a recovery plan that identified detailed goals which facilitated coordination among recovery stakeholders. The plan also helped Kobe prioritize and fund recovery projects, in addition to establishing a basis for subsequent governmental evaluations of the recovery's progress. (2) Build state and local capacity for recovery. State and local governments need certain capacities to effectively make use of federal assistance, including having sufficient financial resources and technical know-how. State and local governments are often required to match a portion of the federal disaster assistance they receive. Loans provided one way for localities to enhance their financial capacity. For example, after the Red River flood, the state-owned Bank of North Dakota extended the city of Grand Forks a $44 million loan, which the city used to match funding from federal disaster programs and begin recovery projects. (3) Implement strategies for businesses recovery. Business recovery is a key element of a community's recovery. Small businesses can be especially vulnerable to major disasters because they often lack resources to sustain financial losses. Federal, state, and local governments developed strategies to help businesses remain in the community, adapt to changed market conditions, and borrow funds at lower interest rates. For example, after the Loma Prieta earthquake, the city of Santa Cruz erected large pavilions near the main shopping street. These structures enabled more than 40 local businesses to operate as their storefronts were repaired. As a result, shoppers continued to frequent the downtown area thereby maintaining a customer base for impacted businesses. (4) Adopt a comprehensive approach toward combating fraud, waste, and abuse. The influx of financial assistance after a major disaster provides increased opportunities for fraud, waste, and abuse. Looking for ways to combat such activities before, during, and after a disaster can help states and localities protect residents from contractor fraud as well as safeguard the financial assistance they allocate to victims. For example, to reduce contractor fraud after the Red River flood, the city of Grand Forks established a credentialing program that issued photo identification to contractors who passed licensing and criminal checks.