	Costs of Providing Disaster Assistance Have Increased, but FEMA Has Not Taken Recommended Action to Control Its Administrative Costs

We reported in September 2012 that FEMA’s administrative costs had  been increasing for all sizes of disasters. According to FEMA,  administrative costs include, among other things, the salary and travel  costs for its disaster workforce, rent and security expenses associated  with establishing and operating its field office facilities, and supplies and  information technology support for its deployed staff. To address these rising costs, FEMA issued guidelines and targets  intended to improve the efficiency of its efforts and to help reduce  administrative costs. Specifically, based on our  analysis of the 539 disaster declarations during fiscal years 2004 through  2011, we found that 37 percent of the declarations exceeded the 2010  administrative cost percentage targets. As a result, in September 2012, we recommended that FEMA implement  goals for administrative cost percentages and monitor performance to  achieve these goals. However, as of July 2014, FEMA had not taken  steps to implement our recommendation. In December 2013, FEMA  officials stated that they are implementing a system called FEMAStat to,  among other things, collect and analyze data on the administrative costs  associated with managing disasters to enable managers to better assess  performance and progress within the organization. As part of the  FEMAStat effort, in 2012 and 2013, FEMA collected and analyzed data  on the administrative costs associated with managing disasters. However,  as of July 2014, FEMA is still working on systematically collecting the  data and utilizing them to develop a model for decision making. As a  result, it is too early to assess whether this effort will improve the  efficiencies or reduce the cost associated with administering assistance in  response to disasters. Opportunities to Increase the Effectiveness of FEMA’s Workforce

We have also reported on opportunities to strengthen and increase the  effectiveness of FEMA’s workforce. More specifically, we previously  reported on various FEMA human capital management efforts (as well as  human capital management efforts across the federal government) and  have made a number of related recommendations for improvement. FEMA has implemented some of these, but others are still underway. We  recommended that FEMA: identify long-term quantifiable mission- critical goals that reflect the agency’s priorities for workforce planning  and training; establish a time frame for completing the development of  quantifiable performance measures related to workforce planning and  training efforts; establish lines of authority for agency-wide workforce  planning and training efforts; and develop systematic processes to  collect and analyze workforce and training data. DHS concurred with  all the recommendations and FEMA is still working to address them. Some of these efforts were highlighted during Hurricane Sandy when  FEMA executed one of the largest deployments of personnel in its history. In 2012, FEMA also created a new disaster  assistance workforce component called the FEMA Corps. FEMA’s deployment of its disaster assistance workforce during the  response to Hurricane Sandy revealed a number of challenges and,  as a result, FEMA is analyzing its disaster assistance workforce  structure to ensure the agency is capable of responding to large and  complex incidents, as well as simultaneous disasters and  emergencies. As part of our ongoing work, we will be evaluating FEMA’s efforts to  address the challenges identified during the agency’s response to  Hurricane Sandy and assessing their impact. Opportunities to Increase the Efficiency of Preparedness Grant Administration

In March 2011, we reported on another area of opportunity for FEMA to  increase the efficiency of its operations—the management of its  preparedness grants. As we again reported in February 2012, four of FEMA’s largest  preparedness grants (Urban Areas Security Initiative, State Homeland  Security Program, Port Security Grant Program, and Transit Security  Grant Program) which have similar goals, fund similar types of projects,  and are awarded in many of the same urban areas, have application  review processes that are not coordinated. In March 2014 in our annual update to our duplication and cost savings  work in GAO’s Online Action Tracker, we reported that FEMA has  attempted to capture more robust data from grantees during applications  for the Port Security Grant Program and the Transit Security Grant  Program—because applicants provide project-level data. FEMA has proposed, through the President’s budget requests to  Congress, to consolidate its preparedness grant programs to streamline  the grant application process, responding to a recommendation we made  in March 2011 by eliminating the need to coordinate application reviews. committees, however, expressed concern that the consolidation plan  lacked detail, and the NPGP was not approved for either fiscal year 2013  or 2014. Federal Disaster Assistance: Improved Criteria Needed to Assess a  Jurisdiction’s Capability to Respond and Recover on Its Own. Disaster Assistance Workforce: FEMA Could Enhance Human Capital  Management and Training.
Why GAO Did This Study

Preparing for, responding to, and recovering from disasters is becoming increasingly complex and costly. GAO reported that from fiscal years 2002 through 2013, the federal government appropriated about $41 billion for preparedness grant programs and $6.2 billion to FEMA's Disaster Relief Fund in fiscal year 2014. In addition, FEMA obligated over $80 billion in federal disaster assistance for major disasters declared from fiscal years 2004 through 2011 and responded to more disasters than in any other year in its history during fiscal year 2011.
The larger number and size of disasters has required increasingly complex and costly FEMA operations and processes to prepare for and respond to these events. For example, Hurricane Sandy in September 2012 required one of the largest deployment of disaster personnel in FEMA's history. Similarly, FEMA's own administrative costs—such as the cost to house and deploy its disaster personnel—have also increased.
This testimony discusses GAO's work on opportunities to enhance efficiencies in FEMA's operations in three areas: (1) disaster administrative costs, (2) workforce management, and (3) preparedness grant management. This testimony is based on previous GAO reports issued from 2008 to 2014 with selected updates and preliminary observations from GAO's ongoing work on disaster administrative costs and workforce management issues in response to Hurricane Sandy.

What GAO Found

GAO's recent and ongoing work examining the Federal Emergency Management Agency's (FEMA) administrative costs of providing disaster assistance highlights opportunities to increase efficiencies and potentially reduce these costs. In September 2012, GAO reported that FEMA's administrative costs for disaster assistance had doubled in size as a percentage of the overall cost of the disasters since fiscal year 1989, and often surpassed its targets for controlling administrative costs. GAO also concluded that FEMA's administrative costs were increasing for all sizes of disasters and for all types of disaster assistance. FEMA issued guidelines intended to improve the efficiency of its efforts and to help reduce administrative costs. However, FEMA did not make this guidance mandatory because it wanted to allow for flexibility in responding to a variety of disaster situations. In 2012, GAO recommended that the FEMA Administrator implement goals for administrative cost percentages and monitor performance to achieve these goals. However, as of June 2014, FEMA had not taken steps to implement GAO's recommendation. GAO's ongoing work indicates that FEMA is implementing a new system to, among other things, collect and analyze data on the administrative costs associated with managing disasters to enable managers to better assess performance. However, according to officials, FEMA is still working on systematically collecting the data. As a result, it is too early to assess whether this effort will improve efficiencies or reduce administrative costs.
GAO has also reported on opportunities to strengthen and increase the effectiveness of FEMA's workforce management. Specifically, GAO reviewed FEMA human capital management efforts in 2012 and 2013 and has made a number of related recommendations, many of which FEMA has implemented; some of which are still underway. For example, GAO recommended that FEMA identify long-term quantifiable mission-critical goals and establish a time frame for completing the development of quantifiable performance measures for workforce planning and training, establish lines of authority for agency-wide efforts related to workforce planning and training, and develop systematic processes to collect and analyze workforce and training data. FEMA concurred and is still working to address these recommendations. For example, FEMA's deployment of its disaster assistance workforce during the response to Hurricane Sandy revealed a number of challenges. In response, according to agency officials, FEMA is, among other things, analyzing its disaster assistance workforce structure to ensure the agency is capable of responding to large and complex incidents. GAO will continue to evaluate these efforts to assess their effectiveness.
In March 2011, GAO reported that FEMA could enhance the coordination of application reviews of grant projects across four of the largest preparedness grants (Urban Areas Security Initiative, State Homeland Security Program, Port Security Grant Program, and Transit Security Grant Program) which have similar goals, fund similar types of projects, and are awarded in many of the same urban areas. GAO recommended that FEMA coordinate the grant application process to reduce the potential for duplication. FEMA has attempted to use data to coordinate two programs and also proposed to consolidate its preparedness grant programs, but FEMA's data system has been delayed, and Congress did not approve FEMA's consolidation proposal for either fiscal year 2013 or 2014.