Disaster assistance involves aid provided both before and after disasters and it involves many federal agencies besides FEMA, including the U.S. Army Corps of Engineers (the Corps), the Small Business Administration (SBA), and the Departments of Agriculture, Transportation, the Interior, Commerce, and Housing and Urban Development. Federal Disaster Assistance Costs Have Grown in Recent Years

For a number of reasons, including a sequence of unusually large and costly disasters, federal disaster assistance costs have increased in recent years. According to data compiled for the Senate Task Force, postdisaster recovery accounted for by far the largest portion of federal disaster assistance (in constant 1993 dollars)—about $87 billion, almost three-quarters of the $119.7 billion total federal disaster assistance from fiscal years 1977 through 1993. Disaster mitigation accounted for the second-largest category of federal disaster assistance obligations—about $27 billion, or 22 percent. In both cases, FEMA accounted for the majority of the costs. Factors Underlying Increasing Costs

The occurrence of large disaster assistance costs in the 1990’s has been attributed to a number of factors. For several of these large disasters, the federal government has borne a larger-than-usual share of the costs. Approaches for Lowering Federal Disaster Assistance Costs

Approaches for lowering federal disaster assistance costs include (1) establishing more explicit and/or stringent criteria for providing federal disaster assistance, (2) emphasizing hazard mitigation through various incentives, and (3) relying more on insurance. The extent to which the implementation of these approaches would lower the costs of federal disaster assistance is unknown. More explicit criteria for disaster declarations could provide a number of potential benefits.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed several approaches for lowering the costs of federal disaster assistance, focusing on: (1) the components and magnitude of federal disaster assistance costs; and (2) approaches that could potentially lower those costs in the future.

What GAO Found

GAO noted that: (1) federal disaster assistance costs billions of dollars annually; (2) according to data compiled for the Senate Bipartisan Task Force on Funding Disaster Relief, federal agencies obligated about $119.7 billion (in constant 1993 dollars) for disaster assistance during fiscal years (FY) 1977 through 1993, the majority of which was for post-disaster assistance; (3) the Federal Emergency Management Agency accounted for about 22 percent of this amount, with the remainder spread across many federal agencies, including the Small Business Administration, the Army Corps of Engineers, and the Department of Agriculture; (4) the federal government provided assistance for an average of nearly 37 disasters or emergencies annually from FY 1977 through FY 1997; (5) the growth in disaster assistance costs in the 1990s has been attributed to a number of factors, including: (a) a sequence of unusually large and costly disasters, for which the federal government has occasionally borne a larger-than-usual share of the costs; (b) a general increase per year in the number of presidential disaster declarations; and (c) a gradual expansion of eligibility for assistance, through legislation and administrative decisions; (6) approaches for lowering federal disaster assistance costs include: (a) establishing more explicit or stringent criteria for providing federal disaster assistance; (b) emphasizing hazard mitigation through various incentives, and (c) relying more on insurance; (7) within these approaches, specific proposals vary; and (8) the extent to which implementation of these proposals would lower the costs of federal disaster assistance is unknown.