SBA has also taken steps to  expedite the process for disbursing approved disaster loans. However,  SBA’s planning approach appears to be limited in that the agency has not  established a time frame for completing key aspects of its comprehensive  disaster management plan, such as cross-training other agency staff to  provide backup support in a disaster and has not assessed whether it  could leverage outside resources—such as the results of disaster  simulations or catastrophe models—to enhance its disaster planning  processes. SBA Did Not Engage in Comprehensive Disaster Planning Prior to Gulf Coast Hurricanes

As was the case with SBA’s limited planning efforts for the implementation  of DCMS, the agency also did not engage in comprehensive disaster  planning for other logistical areas prior to the Gulf Coast hurricanes. However, information  obtained during the course of our review indicates that SBA’s limited  disaster planning process, including the lack of a written plan for staffing  requirements associated with surges in loan applications under varying  disaster scenarios, further impeded the efficiency of the agency’s  response. SBA Utilized a Variety of Outreach Approaches during the Gulf Coast Hurricanes, but Several Factors May Have Limited Their Effectiveness

SBA took a number of steps, under trying conditions, to reach out to Gulf  Coast hurricane victims to provide information and assistance regarding  disaster recovery loan assistance services. For example, the agency  mobilized its staff members to reach out to victims by speaking at  organized events and by advertising in a variety of media including the  Internet. SBA’s Outreach to Gulf Coast Hurricane Victims May Have Been Reduced by the Complexity of Federal Disaster Assistance Programs and the Damage Associated with the Hurricanes

SBA officials told us that they took a variety of steps to explain the  agency’s disaster assistance programs to the victims of the Gulf Coast  hurricanes. SBA Has Initiated an Internal Review of Outreach Provided to Victims of the Gulf Coast Hurricanes

According to SBA officials, the agency has initiated a follow-up internal  review of its outreach to victims of the Gulf Coast hurricanes. SBA officials said that they recognize the  importance of better disaster planning and are in the process of  developing a disaster plan that is designed to addresses key limitations in  the agency’s previous planning approach (e.g, strengthening loan surge  capacity through potential agreements with private sector lenders and  reestablishing the disaster reserve corps). Consequently, SBA should take additional steps to help ensure that it  would be better prepared to provide timely and effective assistance to the  victims of a future disaster. Recommendations for Executive Action

To better position SBA to prepare for and respond to potential disasters,  we recommend that the Administrator of SBA direct the Office of Disaster  Assistance to take the following two actions:    develop time frames for completing key elements of the disaster  management plan and a long-term strategy for acquiring adequate office  space; and   direct staff involved in developing the disaster management plan to further  assess whether the use of disaster simulations or catastrophe models  would enhance the agency’s disaster planning process. Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to (1) assess the Small Business  Aministration’s (SBA) logistical planning efforts prior to the Gulf Coast  hurricanes and current disaster planning efforts and (2) discuss SBA’s  outreach efforts to Gulf Coast hurricane victims. From the survey, among other things, we obtained the loan applicants’  views on how and when they learned of the disaster loan program.
Why GAO Did This Study

The Small Business Administration (SBA) is the federal government's primary provider of disaster loans to businesses, homeowners, and renters. In a previous report (GAO- 06-860), GAO found that SBA's limited information systems planning contributed to delays in processing disaster loans for the victims of the 2005 Gulf Coast Hurricanes (Katrina, Rita, and Wilma). To provide further insight into how SBA's disaster preparedness could be enhanced, this second report, initiated under the Comptroller General's authority, assesses other logistical issues (e.g., staffing and space acquisition) that may have affected the efficiency of the agency's response to the hurricanes. Specifically, this report (1) assesses SBA's logistical planning efforts prior to the Gulf Coast hurricanes and current planning efforts and (2) discusses SBA's outreach services to hurricane victims. GAO reviewed disaster planning reports, interviewed SBA officials, and visited the Gulf Coast region.

What GAO Found

SBA engaged in limited logistical disaster planning prior to the Gulf Coast hurricanes, which, in retrospect, likely contributed to the initial challenges that the agency faced in processing the related surge in disaster loan applications on a timely basis. GAO reports, reports by other investigative agencies, and disaster management experts have stated that comprehensive planning and the supplementary use of sophisticated techniques (e.g., simulations of varying disaster scenarios) can help organizations prepare for potential disasters and mitigate their effects. However, SBA did not engage in or complete comprehensive disaster plans prior to the Gulf Coast hurricanes, in part, due to the view by headquarters agency officials that such planning yielded limited benefits and that local agency officials were in the best position to estimate logistical requirements. With better planning, available evidence suggests the agency could have been better positioned to provide initial disaster assistance to hurricane victims in an organized and efficient manner. In particular, SBA faced challenges in training and supervising thousands of temporary employees hired to process loan applications, had not taken steps to help ensure additional trained staff would be available, and encountered difficulties in obtaining suitable office space for the expanded workforce. In the wake of the Gulf Coast hurricanes, SBA officials said that they recognized the importance of disaster planning and have initiated a planning process designed to address key areas, which includes cross-training other agency staff to provide disaster assistance and recruiting and training a reserve of potential temporary employees. SBA has also taken steps to expedite the process for disbursing approved disaster loans. However, GAO continues to have concerns about several limitations in SBA's current planning process, including the lack of a timetable for competing key elements of its disaster management plan and the fact that the agency has not assessed whether its disaster plan would benefit from the supplemental use of disaster simulations or catastrophe models. SBA took a variety of steps under trying conditions to inform victims of the Gulf Coast hurricanes about its assistance programs, but several factors may have limited the effectiveness of these outreach efforts. SBA staff members reached out to disaster victims by speaking at about 600 organized events and advertising. However, the effectiveness of SBA's outreach efforts may have been reduced by, among other things, both the extensive damage and victim relocations associated with the hurricanes. According to SBA officials, the agency has initiated an internal review of the outreach that it provided to victims of the Gulf Coast hurricanes and is developing a plan to better provide such outreach in future disasters.