FEMA’s PA grant program is a  significant federal tool to support longer-term recovery efforts. Cost and Scope of PA for Gulf Coast Rebuilding Is Very Large and Will Likely Increase

Federal funding for the PA program in the Gulf Coast has already  surpassed that of any previous disaster, and the total cost will likely be  higher than FEMA’s estimate. 2). Large Rebuilding Projects in Louisiana and Mississippi Account for the Vast Majority of PA Funds Made Available to Gulf Coast States

As of September 2008, the states of Louisiana and Mississippi have  received about 90 percent of all PA funds distributed to the four Gulf  Coast states. These challenges resulted in slowing rebuilding progress. These  difficulties were exacerbated by the amount of damage from the 2005 Gulf  Coast hurricanes and the sheer number of rebuilding projects initiated in  their wake. In the  Gulf Coast large PA projects faced several challenges during the project  development and start up process including difficulties in: (1) determining  how much of the damage was disaster related, (2) assessing project scope  including the decision to repair or replace structures, (3) estimating  project costs in the postdisaster environment, (4) using program  flexibilities to rebuild to post disaster needs, and (5) obtaining resources  to initiate projects. For example, although much of the New Orleans water and sewer system  sustained damage as a result of the disaster, FEMA and city officials had  difficulty agreeing on the amount of damage due to the storm as opposed  to that due to deferred maintenance. For instance, FEMA’s Public Assistance Catastrophic  Disaster Recovery Concept Plan, finalized in May 2008, recognizes the  need for PA regulations to allow applicants to more easily tailor projects  to meet postdisaster needs. These temporary measures have already cost the federal  government more than $60 million. According to federal and state officials, it was difficult to develop  rebuilding estimates because of uncertain labor and material costs after  the storms. Initiating projects was a special challenge in Louisiana. Challenges in Sharing and Tracking Project Information

Because the PA process is complex and requires collaboration among  federal, state, and local officials, effective sharing of project information is  particularly important. Although  Louisiana and FEMA employed the use of a Web-based system to track the  status of PA project funding, it did not facilitate the day-to-day exchange  of documents related to project development. However, applicants reported that project appeal decisions were  often not made within the time frames required under the Stafford Act. Human Capital Challenges Contributed to Delays

Human capital challenges at the federal, state, and local level underlie  many of the operational difficulties faced during Gulf Coast rebuilding. Human capital limitations at the federal, state, and local level  underlie many of these operational difficulties as well as present  challenges of their own. Recommendations for Executive Action

To help DHS improve the operation of the PA grant program and build on  some of the actions taken to date, we recommend that the Secretary of  Homeland Security direct the Administrator of FEMA to take the following  four actions:  Improve PA reporting by better defining information presented in FEMA’s  periodic reports to Congress and the public; specifically provide the  number of unique PA projects in addition to figures that include changes  to projects. To address our first objective, we obtained and analyzed funding data  from September 2005 though September 2008 from the Federal Emergency  Management Agency’s (FEMA) Global Reports on Public Assistance in the  Gulf Coast, and for September 2005 though July 2008 from FEMA’s  National Emergency Management Information System (NEMIS). We also interviewed and obtained  information from the Louisiana Recovery Authority, which was the policy  advisor for Gulf Coast rebuilding and, as of January 2008, became the  state’s lead agency working with FEMA on recovery operations, including  PA; the Office of the Legislative Auditor, which assisted in the reviewing of  PA grant applications; and the State Department of Education, which was  a major applicant in the PA process.
Why GAO Did This Study

The devastation caused by the 2005 Gulf Coast hurricanes presented the nation with unprecedented rebuilding challenges. The Federal Emergency Management Agency's (FEMA) Public Assistance (PA) grant program is a key tool for providing funds to support recovery, including rebuilding public schools, roads, and utilities. GAO was asked to examine the amount of PA grants FEMA has provided for rebuilding the Gulf Coast; challenges in the day-to-day operation of the PA program; and human capital challenges; as well as actions taken to address them. Toward this end, GAO reviewed relevant laws, PA regulations and procedures, and analyzed data from FEMA's National Emergency Management Information System. GAO also interviewed federal officials from FEMA and the Department of Homeland Security's (DHS) Office of the Federal Coordinator for Gulf Coast Rebuilding as well as more than 60 officials from state government and eight localities in Louisiana and Mississippi.

What GAO Found

Funding for PA grants related to the 2005 Gulf Coast hurricanes is already more than $11 billion, surpassing that of any previous disaster, and will likely be higher than FEMA's total cost estimate of $13.2 billion. About 90 percent of these funds have gone to the states of Louisiana and Mississippi, about half of which have passed from the states to grant applicants to date. GAO identified challenges in the following broad areas, many of which contributed to slowing down rebuilding projects. (1) Project Development: Challenges in the development of PA projects included difficulties determining the amount of damage that was disaster-related, using PA program flexibilities to rebuild in a way that meets postdisaster needs, assessing project scope including whether to repair or replace damaged structures, estimating project costs, and having sufficient resources to initiate projects. For example, assessing the damage to New Orleans's water and sewer system was complicated by the difficulty distinguishing disaster-related from preexisting damage. Estimating the cost of PA projects presented special challenges because of unusual market conditions for labor and materials in the postdisaster economy. (2) Information Sharing and Tracking: GAO identified challenges in sharing information among federal, state, and local participants in the PA process as well as in tracking the status of projects. For example, in Louisiana, information sharing was made more difficult in the absence of an effective document-sharing system and because key FEMA and state officials who review PA applications are located in different cities. (3) Project Approvals and Appeals: FEMA's approval decisions on some projects were reversed after applicants had already moved ahead with construction. In addition, decisions on appeals were often not made within required time frames due to the large number of rebuilding projects. (4) Human Capital: Human capital challenges at all levels of government underlie many of the above challenges and also slowed rebuilding projects. Shortages of experienced and knowledgeable staff were particularly problematic during the initial stages of rebuilding. FEMA's early reliance on temporary rotating staff did not provide the level of continuity needed for the complex demands of Gulf Coast rebuilding. Among the actions DHS has taken to address these challenges are the finalization of a PA catastrophic disaster recovery concept plan that recognizes the need to more easily tailor projects to meet postdisaster conditions; the development of new management information systems to better track and manage projects and increase the transparency of PA funding; and the creation of a credentialing program for employees.