Assistance from the Federal Emergency Management Agency (FEMA) may be provided if the President, at a state governor’s request, declares that an emergency or disaster exists and that federal resources are required to supplement state and local resources. These included changes in (1) the building codes applicable to the repair and restoration of damaged buildings and (2) the damage threshold governing the decision on whether to repair or replace a damaged facility. To determine how FEMA ensures that funds are expended only for eligible items, we reviewed FEMA’s written guidance and procedures for disbursing funds to public assistance grantees. Criteria for Determining Eligibility of Certain Private Nonprofit Applicants Are Unclear

Before 1970, private nonprofits were not eligible for public assistance. Under the uniform requirements, it is the states’ responsibility, rather than FEMA’s, to ensure that all costs applied against FEMA funding are eligible. In commenting on a draft of this report, the Director of FEMA stated that FEMA conducts final inspections and project reviews to verify the actual eligible costs for large projects “in which the grantee is required to make an accounting to FEMA of eligible costs.”
FEMA public assistance program officials generally believe that the states’ reviews are adequate to ensure that disbursements are made only for eligible items; conversely, FEMA’s Deputy Inspector General advised us that the quality of the states’ closeout reviews varies considerably from state to state and that he does not rely on the closeout reviews as adequate assurance that all costs charged against the DSR were proper, especially when many states’ disaster recovery personnel view themselves as advocates for the subgrantees. Following are the options that the FEMA respondents rated most highlywhen considering changes to the eligibility criteria that could reduce the public assistance program’s costs. Restrict eligibility of public facilities to those being actively used for public purposes at the time of the disaster.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the Federal Emergency Management Agency's (FEMA) public assistance program, focusing on: (1) its procedures for determining eligibility for public assistance; (2) its efforts to ensure that funds are spent in accordance with authorized work; and (3) options to modify FEMA eligibility criteria.

What GAO Found

GAO found that: (1) while FEMA must fund the restoration of eligible facilities in accordance with applicable building codes, it is unclear whether the building codes that existed before the disaster or at the time of restoration should apply; (2) the eligibility of certain private, nonprofit facilities that provide essential governmental services to the general public is unclear; (3) without clear eligibility criteria, FEMA cannot control program costs or ensure consistent eligibility determinations; (4) eligibility determinations were not systematically codified and disseminated to FEMA personnel; (5) FEMA relies on states, independent audits, and its inspector general to ensure that federal funds are only spent on eligible restorations; and (6) changing various eligibility requirements in accordance with FEMA program officials' recommendations could reduce FEMA public assistance program costs.