oversight

Results Act: Observations on the Federal Emergency Management Agency's Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                     United States
GAO                  General Accounting Office
                     Washington, D.C. 20548

                     Resources, Community, and
                     Economic Development Division

                     B-277479

                     July 22, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

                     The Honorable John Kasich
                     Chairman, Committee on the Budget
                     House of Representatives

                     The Honorable Dan Burton
                     Chairman, Committee on Government Reform
                       and Oversight
                     House of Representatives

                     The Honorable Bob Livingston
                     Chairman, Committee on Appropriations
                     House of Representatives

                     Subject: Results Act: Observations on the Federal Emergency Management
                     Agency’s Draft Strategic Plan

                     On June 12, 1997, you asked us to review the draft strategic plans
                     submitted by the cabinet departments and selected major agencies for
                     consultation with the Congress as required by the Government
                     Performance and Results Act of 1993 (the Results Act). This report is our
                     response to that request concerning the Federal Emergency Management
                     Agency (FEMA).


                     Specifically, you asked us to review FEMA’s draft plan and assess
Objectives, Scope,   (1) whether it fulfills the requirements of the Results Act and to provide
and Methodology      our views on its overall quality; (2) whether it reflects FEMA’s key statutory
                     authorities; (3) whether it reflects interagency coordination for
                     crosscutting programs, activities, or functions that are similar or
                     complementary to other federal agencies; (4) whether it addresses major
                     management problems we have previously identified; and (5) whether
                     FEMA had adequate data and information systems to provide sufficiently
                     reliable information for measuring results.

                     We obtained the June 24, 1997, draft strategic plan that FEMA provided to
                     congressional committees. It is important to recognize that FEMA’s final




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             plan is not due to the Congress and the Office of Management and Budget
             (OMB) until September 30, 1997. Furthermore, the Results Act anticipated
             that perfecting the process may take several planning cycles and that the
             final plan will continue to be refined as future planning cycles occur. Thus,
             our comments reflect a “snapshot” of the agency’s plan at this time. We
             recognize that developing a strategic plan is a dynamic process and that
             FEMA is continuing work to revise the draft with input from OMB,
             congressional staff, and other stakeholders.

             Our overall assessment of FEMA’s draft strategic plan was generally based
             on our knowledge of FEMA’s operations and programs, our past reviews of
             the agency, and other existing information available at the time of our
             assessment. Specifically, the criteria we used to determine whether FEMA’s
             draft strategic plan complied with the requirements of the Results Act
             were the Results Act, as supplemented by OMB’s guidance on developing
             these plans (Circular A-11, Part 2). To judge the overall quality of the plan
             and its components, we used our May 1997 guidance for congressional
             review of the plans (GAO/GGD-10.1.16). To determine whether the plan
             contained information on interagency coordination and addressed
             management problems previously identified by GAO and/or others and
             whether FEMA had adequate systems in place to provide reliable
             information on performance, we reviewed the reports on audits of FEMA’s
             financial statements for fiscal years 1995 and 1996, the agency’s fiscal year
             1996 Federal Managers’ Financial Integrity Act (FMFIA) report, and the
             agency’s plans for implementing the Government Management Reform
             Act. We also relied on our general knowledge of FEMA’s operations and
             programs, the results of our previous work, and reports from FEMA’s Office
             of the Inspector General. In determining whether FEMA’s draft strategic
             plan reflects major statutory responsibilities, we coordinated our review
             with the Congressional Research Service and reviewed material in FEMA’s
             1998 budget explanatory notes for an overview of the agency’s primary
             functions and activities. Our work was performed in June and July 1997.
             We obtained comments from FEMA on a draft of this report.


             FEMA is an independent agency charged with helping states and localities
Background   deal with natural disasters. FEMA’s programs and activities encompass all
             four phases of emergency management: preparedness (developing and
             maintaining the capability to respond to disasters), mitigation (reducing
             the risk of loss of life and property from natural hazards), response
             (providing immediate relief to disaster victims), and recovery (rebuilding
             and restoring disaster-damaged communities). Prior to the establishment



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                   of FEMA in 1979, these functions were administered by various federal
                   agencies, including the departments of Defense, Housing and Urban
                   Development, and Commerce. FEMA’s budget is affected by the number and
                   scope of presidential disaster declarations. During the 1990s, the agency’s
                   disaster assistance obligations have averaged about $2 billion annually.

                   States and localities maintain primary responsibility for managing
                   emergencies. The principal federal authority for the provision of disaster
                   relief is the Robert T. Stafford Disaster Relief and Emergency Assistance
                   Act. Under this act, FEMA provides financial and technical assistance for
                   both predisaster activities (preparedness and mitigation) and postdisaster
                   activities (response and recovery). Postdisaster assistance may be
                   provided only if the President, at the request of a state governor, declares
                   that an emergency or disaster exists and that federal resources are
                   required to supplement state and local resources.

                   In 1993, FEMA initiated its first agencywide strategic planning effort. As part
                   of that effort, FEMA refocused its mission, comprehensively reviewed its
                   programs and structures, and initiated a major reorganization. In
                   April 1993, FEMA issued its mission statement and, in 1994, published its
                   first strategic plan. The June 1997 draft strategic plan includes revisions to
                   FEMA’s 1994 strategic plan.


                   The Results Act requires that an agency’s strategic plan contain the
                   following six critical elements: (1) a comprehensive mission statement;
                   (2) agencywide long-term goals and objectives for all major functions and
                   operations; (3) approaches (or strategies) and the various resources
                   needed to achieve the goals and objectives; (4) an identification of key
                   factors, which are external to the agency and beyond its control, that
                   could significantly affect the achievement of the strategic goals; (5) a
                   description of the relationship between the long-term goals and objectives
                   and annual performance goals; and (6) a description of how program
                   evaluations were used to establish or revise strategic goals and a schedule
                   for future program evaluations.


                   Overall, FEMA’s draft strategic plan indicates that the agency has made
Results in Brief   good progress towards fulfilling the requirements of the Results Act. It
                   focuses on a few strategic goals that are generally results-oriented and
                   well-linked to a mission that reflects consideration of key statutory
                   provisions. The draft plan, however, is missing two of the six critical
                   elements required by the Results Act and OMB’s guidance: a relationship



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between general goals and annual performance goals and a description of
the role of program evaluations. The plan could be made more useful to
FEMA, the Congress, and other stakeholders by clarifying the linkage
among goals, objectives, and strategies and by making other changes to
better conform to the Results Act and OMB’s guidance. For example, while
the plan identifies some external factors that affect the agency’s ability to
achieve its goals, it does not link the external factors to particular goals or
describe how achieving the goals could be influenced by the factors.

Although FEMA’s draft strategic plan reflects consideration of the key
statutory provisions that authorize FEMA’s programs (such as the Stafford
Act), it does not explicitly reference the major legislation or executive
orders that serve as a basis for its mission statement, goals, and strategies.
The plan might benefit from explicit references to these authorities and
descriptions of how they relate to the agency’s goals and objectives.

FEMA’s draft plan clearly acknowledges that the nation’s emergency
management system is built on a partnership with states, localities, and
individuals. However, it does not reflect the significant role that other
federal agencies play in emergency management, particularly in helping
communities and individuals recover from the effects of disasters. It might
benefit by mentioning the external stakeholders, such as federal agencies
with related missions, and how FEMA coordinated with them in developing
its plan.

The plan does not specifically address certain management issues that we
and others have previously identified. For example, while the plan has a
goal of cost-efficiency, it does not fully address reducing program costs,
which have soared in recent years in the wake of several large-scale
disasters. Furthermore, FEMA’s draft plan does not directly address
financial and information management problems that could hinder the
achievement of its strategic goals and objectives. For example, significant
accounting and financial management deficiencies have precluded FEMA
from producing reliable financial data and statements for the Disaster
Relief Fund, which represents the bulk of the agency’s budget authority.
This situation, coupled with nonintegrated financial systems and
ineffective controls, has prevented FEMA from complying with the statutory
requirements to prepare agencywide financial statements and have them
independently audited.

FEMA’s capacity to provide reliable information on achieving its goals is
uncertain. The performance measures discussed in FEMA’s draft plan



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                        include approaches for long-term measurement processes that have not
                        yet been developed and/or propose to use baseline data that are not yet
                        available. While obtaining information for some performance measures
                        may be difficult, costly, or both, the plan does not discuss what resources
                        may be required to develop the proposed measurement processes and
                        data. Furthermore, FEMA’s financial and information management systems
                        may not have the capacity to generate sufficiently reliable information
                        needed to monitor progress towards its goals.


                        Overall, FEMA’s draft strategic plan indicates that the agency has made
FEMA’s Strategic Plan   good progress towards fulfilling the requirements of the Results Act. It
Could Better Meet the   focuses on a few strategic goals that are generally results-oriented and
Requirements of the     well-linked to a mission that reflects consideration of key statutory
                        provisions. The draft plan, however, is missing two of the six critical
Results Act             elements required by the Results Act and OMB’s guidance. While it
                        explicitly addresses three elements (mission statement, goals and
                        objectives, and strategies) and implicitly addresses a fourth element (key
                        external factors), the plan does not discuss the remaining two (the
                        relationship between general goals and annual performance goals and the
                        role of program evaluations). Furthermore, as discussed in the following
                        sections, the plan could be made more useful to FEMA, the Congress, and
                        other stakeholders by clarifying the linkage among the goals, the
                        objectives, and the strategies and by incorporating other changes to better
                        conform to the Results Act and OMB’s guidance.


Mission Statement       FEMA’s draft strategic plan defines the agency’s mission as follows:
                        “Reduce the loss of life and property and protect our institutions from all
                        hazards by leading and supporting the Nation in a comprehensive,
                        risk-based emergency management program of mitigation, preparedness,
                        response, and recovery.” Overall, FEMA’s mission statement meets the
                        requirements established in the Results Act, which requires a
                        comprehensive mission statement summarizing an agency’s major
                        functions. FEMA’s mission statement explicitly refers to the four principal
                        phases of disaster management—mitigation, preparedness, response, and
                        recovery—which also encompass the agency’s major functions.

                        Furthermore, the mission statement specifically defines FEMA’s role as
                        supporting and leading rather than implementing emergency management
                        efforts. This role is consistent with the federal policy that places primary
                        responsibility for managing emergencies on states and localities.



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Strategic Goals and                The Results Act requires that each agency’s strategic plan set out
Objectives                         programmatic, policy, and management goals and that the goals and
                                   objectives elaborate on how the agency is carrying out its mission. FEMA’s
                                   draft strategic plan articulates three goals, each with two objectives, as
                                   shown in table 1.

Table 1: Goals and Objectives in
FEMA’s Draft Strategic Plan        Goal                                           Objective
                                   1.Protect lives and prevent the loss of        1.By the end of fiscal year 2002, reduce
                                     property from all hazards.                     by 10 percent the risk of loss of life and
                                                                                    injury from hazards.
                                                                                  2.By the end of fiscal year 2002, reduce
                                                                                    by 15 percent the risk of property loss
                                                                                    and economic disruption from hazards.
                                   2.Reduce human suffering and enhance           3.By the end of fiscal year 2002, reduce
                                     the recovery of communities after disaster     by 25 percent human suffering from the
                                     strikes.                                       impact of disasters.
                                                                                  4.By the end of fiscal year 2002,
                                                                                    increase by 20 percent the ability of
                                                                                    individuals, businesses, and public
                                                                                    entities to recover from disasters.
                                   3.Ensure that FEMA serves the public in a      5.By the end of fiscal year 2002, improve
                                     timely and cost-efficient manner.              by 20 percent the efficiency with which
                                                                                    FEMA delivers its services.
                                                                                  6.By the end of fiscal year 2002, achieve
                                                                                    90 percent overall customer satisfaction,
                                                                                    internal and external, with FEMA’s
                                                                                    services.

                                   The draft plan characterizes the first two goals as mission-related and the
                                   third as organizational. We note that the first two goals are results-oriented
                                   and the third goal, based on customer service and efficiency, is
                                   process-oriented (characterizing how FEMA intends to operate instead of
                                   expressing an outcome resulting from FEMA’s actions).

                                   The Results Act requires that strategic goals and objectives be stated in a
                                   manner that allows a future assessment to be made on whether they were
                                   or are being achieved. By including specific deadlines and targets, FEMA’s
                                   goals meet this criterion. However, the objectives would be improved by
                                   clarifying their intended results—that is, the specific reduction, increase,
                                   or improvement that is intended. For example, it is not clear whether the
                                   second objective is to reduce the risk of property loss and economic
                                   disruption from hazards by 15 percent from the level existing in an earlier
                                   baseline year or to make the risk 15 percent lower in 2002 than the level
                                   that would have prevailed in the absence of FEMA’s programs. (While the



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                           latter interpretation appears to be consistent with FEMA’s mission
                           statement and first goal, the discussion of performance measurement
                           seems to support the former interpretation.) This clarification is important
                           because it could affect which specific strategies to use, levels of resources
                           to require, and specific performance measures to use.

                           Furthermore, the strategic plan could be strengthened by acknowledging
                           that the first two goals could be somewhat conflicting. The first goal
                           focuses on reducing risk prior to a disaster’s striking while the second
                           focuses on reducing suffering after a disaster has struck. To the extent
                           that the fourth objective—which focuses on enhanced ability to recover
                           from disasters—means providing more or quicker financial assistance to
                           those with property losses, these two goals could conflict: The better the
                           emergency management partnership is at reducing human suffering and
                           enhancing the recovery of communities after a disaster has struck, the less
                           incentive the public may have to take steps that would help prevent future
                           losses.

                           Also, the OMB circular states that strategic plans are to set out long-term
                           objectives of the agency. One of FEMA’s objectives is to achieve 90 percent
                           overall customer satisfaction with its services by 2002. We note that FEMA’s
                           FMFIA report for fiscal year 1996 cites customer surveys showing that
                           nearly 89 percent of the respondents were either very satisfied or satisfied
                           with FEMA’s overall service. Therefore, this objective may not meet the
                           circular’s emphasis on long-term improvement without a discussion in the
                           plan that explains the significance of a 1-percent improvement target.


Strategies for Achieving   The Results Act requires that each agency’s strategic plan describe how
Goals/Objectives           the agency’s goals and objectives are to be achieved. OMB’s guidance
                           suggests that the plan (1) describe the operational processes,
                           technologies, and resources that will be used to achieve the strategic goals
                           and objectives and (2) provide more detail when achieving the goals
                           depends on a significant change in resources, technologies, or the agency’s
                           operations. The guidance also suggests schedules for any significant
                           actions as well as discussions of the process for communicating goals and
                           objectives throughout the agency and for assigning accountability to
                           managers and staff for achieving them.

                           FEMA’s draft plan provides information on approaches for achieving the
                           goals and objectives in two sections: (1) a discussion of performance
                           measures associated with each objective and (2) a section entitled



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                       “Strategies.” However, neither of these sections fully meets the guidance
                       described above—that is, they do not discuss the resources, the
                       technologies, or the agency operations that will be needed to accomplish
                       the goals and objectives, how the goals and objectives with be
                       communicated throughout FEMA, or how accountability will be assigned.

                       In addition to more fully addressing OMB’s guidance, the plan could be
                       strengthened if the strategies were more integrally linked to FEMA’s
                       strategic objectives. Some of the strategies include 5-year operational
                       objectives that, according to the plan, “contribute” to achieving one or
                       more of the agency’s three strategic goals. For example, one such
                       objective is, “Before 2002, at least 50 percent of all Federal departments
                       and agencies that influence the built environment (including FEMA) will
                       document the annually improved contribution their programs have made
                       in measurably reducing the Nation’s risk from natural hazards.” That
                       objective is shown to be contributing to achieving goals one and two. The
                       plan thus identifies which strategic goal(s) each strategy supports but does
                       not make clear how the strategy will contribute to achieving the goal(s).
                       Furthermore, because the strategies are not linked to specific strategic
                       objectives, the plan precludes assessing the extent to which FEMA’s
                       strategic goals might be achieved by following its strategies, and diffuses
                       accountability for achieving the strategic objectives. This reduces the
                       plan’s value to users in FEMA, the administration, and the Congress. One
                       way that FEMA could improve the linkage would be to clearly describe, for
                       each strategic objective, the key strategies that it intends to use to
                       accomplish that objective. This structure would help make the plan more
                       meaningful to its users, including FEMA employees throughout the agency,
                       and more useful in measuring the achievement of goals and in assessing
                       accountability.


Key External Factors   The Results Act requires that strategic plans identify key factors external
                       to the agency and beyond its control that could significantly affect the
                       achievement of goals and objectives. These factors might be, for example,
                       economic, demographic, or social conditions. In addition to describing
                       each factor, Circular A-11 suggests that the strategic plans indicate how
                       each factor links with a particular goal(s) and describe how achievement
                       of a goal could be affected by the factor. Addressing key external factors is
                       important for evaluating the likelihood of achieving strategic goals,
                       identifying further actions needed to better meet these goals, and
                       assessing the agency’s performance.




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                           FEMA’s draft strategic plan does not fully comply with OMB’s guidance. For
                           example, to better meet OMB’s guidance, the plan should link the external
                           factors to particular goals or describe how achieving the goals could be
                           influenced by the factors.

                           Also, the draft plan does not explicitly mention “key external factors;” a
                           section labeled “Challenges” implicitly addresses such factors. This
                           section discusses three factors that are largely beyond FEMA’s control that
                           could affect its achieving the goals: the extent to which the emergency
                           management community functions effectively; the availability of resources
                           at the local, state, and federal levels; and the unpredictable nature of
                           disasters. To clarify the reader’s understanding of the plan, FEMA could
                           revise the title of this section to more accurately reflect the language of
                           the Results Act.


The Relationship Between   Under the Results Act, each general goal must be linked to an agency’s
General and Annual         annual performance goals. A performance goal is the target level of
Performance Goals          performance expressed as a tangible, measurable objective against which
                           actual achievement will be compared. An annual performance goal has
                           two parts: (1) the performance measure that represents the specific
                           characteristic of the program that will be used to gauge performance and
                           (2) the target level of performance to be achieved during a given fiscal
                           year for that measure. While strategic plans are not required to identify
                           specific performance measures, OMB Circular A-11 suggests that strategic
                           plans briefly relate general goals and objectives to annual performance
                           goals. The guidance suggests that the plans also include descriptions of the
                           type, the nature, and the scope of the performance goals included in the
                           performance plans as well as the relevance and the use of those
                           performance goals to help determine the achievement of the strategic
                           goals.

                           FEMA’s draft plan does not contain an explicit discussion of the type, the
                           nature, and the scope of the performance goals to be included in the
                           annual performance plan. It does implicitly discuss the relevance and the
                           use of performance goals. The plan recognizes the requirement for annual
                           performance measures and states that the agency’s annual performance
                           plan will include performance goals as well as the activities and the
                           resources that directly contribute to accomplishing each objective and
                           strategic goal. Furthermore, by placing a specific time period in its
                           strategic objectives, the plan appears to recognize that progress will be




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                      made incrementally. Also, the discussion of performance measures that
                      follows each strategic objective refers to the use of annual measures.

                      The annual performance plans required by the Results Act should help the
                      Congress and the executive branch make informed decisions by providing
                      a simple, straightforward linkage between an agency’s plans, budgets, and
                      performance results. The Results Act requires agencies to develop
                      performance plans covering the programs and activities used in their
                      budget submissions. FEMA’s draft plan observes that its strategies are
                      directly aligned with budget activities. However, as noted above, we
                      believe the agency’s plan could be strengthened by specifying to which
                      objectives the strategies are linked.


Program Evaluations   The Results Act, as supplemented by OMB’s guidance, requires that
                      strategic plans describe the program evaluations that were used to prepare
                      them and the schedule for future evaluations. FEMA’s draft strategic plan
                      does not include the required program evaluations.

                      The Results Act also requires a discussion of completed and future
                      program evaluations because they are effective at measuring outcomes—a
                      principal purpose of that act. The Results Act defines program evaluations
                      as an assessment, through objective measurement and systematic analysis,
                      of the manner and extent to which federal programs achieve intended
                      objectives. FEMA’s draft plan would be improved by including this element
                      because the use of program evaluations would enhance the agency’s
                      ability to ensure the validity and reasonableness of its strategic goals and
                      objectives. Future program evaluations will be needed to help identify
                      improvement strategies if FEMA’s goals and objectives are not met.


Other Observations    As FEMA continues revising its draft strategic plan, it could be strengthened
                      if the agency considered the following observations:

                      Given the many and varied stakeholders that will have critical roles in
                      determining the extent to which FEMA’s goals are met, the plan should
                      briefly identify the major stakeholders that contributed to its development
                      both inside and outside the agency. Also, by simplifying some of the
                      language, the plan might more clearly communicate FEMA’s strategic
                      direction to make it clearer to readers outside of the emergency
                      management community. For example, such terms as “risk” and “all
                      hazards” have specific meanings in the context of emergency management



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                         that may differ from their meanings in other contexts. To FEMA’s credit, the
                         draft plan explicitly defines such terms as “preparedness,” “mitigation,”
                         “response,” and “recovery.” This change should also make FEMA’s mission
                         statement much clearer to external audiences.

                         Within the context of the third goal, which focuses on ensuring that FEMA
                         serves the public in a timely and cost-efficient manner, or elsewhere in the
                         plan, FEMA may wish to consider specifically addressing the need to
                         minimize disruptions that occur in its operations when a major disaster
                         strikes. FEMA staff are often quickly dispatched to the disaster site to aid in
                         preparation and response activities. While perhaps important to helping
                         achieve the second goal in the draft strategic plan—reducing human
                         suffering from the impact of disasters—this rapid exodus of agency staff
                         could hamper the achievement of other objectives, such as reducing the
                         risk of future losses.


                         Although FEMA’s plan reflects consideration of the key statutory provisions
FEMA’s Strategic Plan    that authorize FEMA’s programs (such as the Stafford Act), it does not
Reflects Key Statutory   explicitly reference the major legislation or executive orders that serve as
Authorities              a basis for its mission statement, goals, and strategies. The plan might
                         benefit from explicit references to these authorities and descriptions of
                         how they relate to the agency’s goals and objectives.1 Describing this
                         relationship throughout the strategic plan would help ensure that FEMA’s
                         stated goals and objectives respond to the entire spectrum of its key
                         statutory authorities.

                         Statutory references to help clarify FEMA’s role in radiological emergencies
                         at commercial nuclear power facilities and its responsibilities for the flood
                         insurance program, the fire prevention and control program, and the
                         earthquake hazards reduction program would also be useful.


                         FEMA’s draft strategic plan clearly acknowledges that the nation’s
Draft Strategic Plan     emergency management system depends on a partnership with states,
Does Not Identify        localities, and individuals. However, it does not reflect the significant role
Crosscutting Program     that other federal agencies, such as the Small Business Administration and
                         the U.S. Army Corps of Engineers, play in emergency management,
Activities               particularly in helping communities and individuals recover from the
                         effects of disasters. The plan would benefit by incorporating some

                         1
                          OMB Circular A-11 suggests that an agency’s mission statement may include a brief discussion of the
                         agency’s enabling or authorizing legislation; this suggestion, however, does not extend to the
                         statement of goals and objectives.



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                       descriptions of other agencies’ programs and their influence on FEMA’s
                       strategic objectives.

                       Numerous federal agencies are involved in providing disaster assistance.
                       The Federal Response Plan—FEMA’s “blueprint” for the federal response to
                       disasters—identifies 27 federal agencies and the American Red Cross as
                       service providers when there is a need for federal assistance following any
                       type of disaster or emergency.

                       Under authorities other than the Stafford Act, federal agencies also
                       provide financial assistance to help communities recover from disasters.
                       For example, other agencies’ assistance to repair or restore certain public
                       facilities is an important factor in determining eligibility for public
                       assistance from FEMA. These agencies include the Federal Highway
                       Administration, whose emergency relief program funds the major portion
                       of the costs to permanently restore federal highways seriously damaged by
                       disasters; the U.S. Army Corps of Engineers, whose flood control and
                       coastal works rehabilitation activities provide assistance for constructing
                       flood control facilities and clearing debris; and the Small Business
                       Administration, which provides loans to businesses and homeowners to
                       rebuild or repair business structures and dwellings.

                       As previously mentioned, FEMA’s draft strategic plan might also benefit by
                       briefly mentioning the external stakeholders involved in its development
                       and how FEMA coordinated the development of its plan with federal
                       agencies that have related missions.


                       One of the three goals in FEMA’s draft plan is directed at better managing
Draft Strategic Plan   the agency—to ensure that FEMA serves the public in a timely and
Does Not Address       cost-efficient manner. However, the plan does not specifically address
Management             certain management issues that we and others have previously identified.

Challenges             One major challenge the plan does not address is containing disaster
                       assistance program costs, which have soared in recent years in the wake
                       of several large-scale disasters. Reducing these costs is an issue that has
                       received considerable congressional attention,2 and several proposals,
                       such as the following, have been made to reduce them:



                       2
                        In the 103rd Congress, the House and the Senate established bipartisan task forces on disaster
                       assistance funding. See Federal Disaster Assistance, Report of the Senate Bipartisan Task Force on
                       Funding Disaster Relief, Document No. 104-4, Mar. 15, 1995.



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•   In a May 1996 report, we presented several proposals, which had been
    identified by FEMA regional officials, to reduce the costs of its public
    assistance program.3 (This program provides financial and other
    assistance to restore or rebuild disaster-damaged facilities that serve a
    public purpose, including government buildings and water distribution
    systems.) For example, FEMA officials suggested limiting the impact of
    building codes and standards and eliminating funding for some water
    control projects.
•   In March 1995 testimony, we discussed three broad approaches to
    potentially reduce the costs of federal disaster assistance.4 These included
    (1) establishing more explicit and/or stringent criteria for providing federal
    disaster assistance, (2) emphasizing hazard mitigation through incentives,
    and (3) relying more on insurance.
•   In a September 1995 report, we noted that the flexibility and generally
    subjective nature of FEMA’s criteria had raised questions about the
    consistency of providing federal disaster assistance.5 These criteria
    directly affect FEMA’s costs for providing disaster assistance.
•   In July 1995, FEMA’s Office of the Inspector General (OIG) issued a report
    identifying ways to reduce the costs of federal disaster assistance by
    eliminating or restricting eligibility or by replacing existing grants with
    loans.6
•   Similarly, in 1993, the National Performance Review recommended that
    FEMA propose comprehensive federal policies to reduce the total cost of
    disasters and minimize federal costs of disaster assistance.7

    FEMA’s draft strategic plan mentions cost reduction in several places. For
    example, the plan recognizes the importance of mitigation—which
    includes minimizing the risk of property losses from hazards—for
    reducing the future societal costs of disasters. Also, the plan’s third goal
    acknowledges the importance of operating in a cost-efficient manner.
    However, the objective associated with this goal implies reducing FEMA’s
    administrative costs, which are small relative to program costs. For
    example, in fiscal year 1996, FEMA’s obligations for salaries and expenses

    3
     Disaster Assistance: Improvements Needed in Determining Eligibility for Public Assistance
    (GAO/RCED-96-113R, May 23, 1996).
    4
    Disaster Assistance: Information on Expenditures and Proposals to Improve Effectiveness and
    Reduce Future Costs (GAO/T-RCED-95-140, Mar. 16, 1995).
    5
      Disaster Assistance: Information on Declarations for Urban and Rural Areas (GAO/RCED-95-242, Sept.
    14, 1995).
    6
     Options for Reducing Public Assistance Program Costs (Inspection Report I-02-95, July 1995).
    7
    National Performance Review, Creating a Government That Works Better and Costs Less: Federal
    Emergency Management Agency (Washington, D.C.: U.S. Government Printing Office, 1993).



    Page 13                                               GAO/RCED-97-204R FEMA’s Strategic Plan
B-277479




totaled about $164 million while obligations for the Disaster Relief Fund
were about $3.6 billion.

In addition, FEMA—like many federal agencies—faces a major challenge in
managing information resources to ensure that information technology
tools and resources are consistent with the agency’s mission. While FEMA’s
draft plan cites improvements in the delivery of telecommunications, in
data infrastructure, and in information technology projects, it does not
discuss the agency’s strategy for information technology. This strategy
should include how FEMA intends to address the “year 2000 problem,”
which involves the need to change computer systems to accommodate
dates beyond the year 1999 as well as any significant information security
weaknesses—two issues that we have identified as high risk across the
government. In addition, FEMA’s information technology strategy should
contain information on how the agency intends to comply with the
Clinger-Cohen Act of 1996. This act calls for agencies to implement a
framework of modern technology management based on practices
followed by leading private-sector and public-sector organizations that
have successfully used technology to dramatically improve performance
and meet strategic goals.

Furthermore, FEMA’s draft strategic plan does not directly address financial
and information management problems that could hinder the achievement
of its goals and objectives. For example, significant accounting and
financial management deficiencies have precluded FEMA from producing
reliable financial data and statements for the Disaster Relief Fund, which
represents the bulk of the agency’s budget authority (about 76 percent in
fiscal year 1996). This situation has resulted in FEMA’s inability to comply
with the Government Management Reform Act’s requirements to prepare
agencywide financial statements and have them independently audited.
Although FEMA’s draft plan includes a core value that emphasizes
“commitment to prudent management of the taxpayers’ money,” it does
not address correcting the accounting deficiencies related to the Disaster
Relief Fund that would enable FEMA to account for how the funds were
used—a logical first step towards determining whether those funds were
prudently managed.




Page 14                                 GAO/RCED-97-204R FEMA’s Strategic Plan
                         B-277479




                         FEMA needs reliable data to measure its progress in achieving its goals. The
FEMA’s Capacity to       performance measures discussed in FEMA’s draft strategic plan (1) include
Provide Reliable         approaches for long-term measurement processes that have not yet been
Information on the       developed and/or (2) propose to use baseline data that are not yet
                         available. The plan does not discuss what resources may be required to
Achievement of           develop the proposed measurement processes and data. Obtaining
Strategic Goals Is       information for some performance measures may be difficult, costly, or
                         both. For example,
Uncertain
                     •   Data may be scarce for some of the plan’s proposed proxy measures. For
                         example, one proxy uses, as its universe, communities that have
                         (1) experienced a presidentially declared disaster, (2) implemented
                         mitigation measures, and (3) experienced a similar type disaster within a
                         10-year period. Communities that meet all three criteria might be rare.
                     •   One measure includes quantifying access to roads and transportation,
                         educational institutions, medical facilities, utilities, water treatment, and
                         businesses following a disaster. Depending on data availability and
                         reliability, this measure may be difficult to quantify.
                     •   In several cases, surveys are proposed as the methodology to measure
                         performance. Depending on their size, scope, and rigor, surveys may be
                         costly.

                         Also, as we and others have found, FEMA’s financial and information
                         management systems may not have the capacity to generate sufficiently
                         reliable information to monitor progress towards its goals. For example,
                         the 1996 financial statement audit indicated that FEMA’s Integrated
                         Financial Management Information System (IFMIS) was not fully
                         implemented; the data conversion from the legacy system to IFMIS was
                         insufficiently documented, tested, and approved; and FEMA had no written
                         security policies and procedures for portions of that system. IFMIS is the
                         source of information pertinent to certain cost-efficiency performance
                         measures contained in the agency’s draft strategic plan. Also, FEMA’s fiscal
                         year 1996 FMFIA report identified several financial information system
                         weaknesses, including a lack of data standardization and system
                         documentation. Until FEMA corrects these problems, the agency will be
                         hindered in its ability to produce reliable data needed for developing and
                         reporting useful performance measures.

                         Once FEMA develops its final performance measures, it may need to
                         consider appropriate system modifications to capture needed data. Key
                         requirements of the Chief Financial Officers Act of 1990 are the
                         development of cost information to enable the systematic measurement of



                         Page 15                                   GAO/RCED-97-204R FEMA’s Strategic Plan
                  B-277479




                  performance and the integration of systems—program, accounting, and
                  budget systems.


                  On July 18, 1997, we provided FEMA with a draft of this report for review
Agency Comments   and comment. On July 21, 1997, we obtained comments from officials from
                  the Office of Policy and Regional Operations. Overall, FEMA officials agreed
                  with our observations and our facts, indicating that the report provided
                  helpful information. FEMA officials were concerned that if they
                  incorporated all our suggestions, the document would be too voluminous.
                  They stated that other documents, such as 5-year plans and annual plans,
                  would contribute to fully meeting the requirements of the Results Act. We
                  agree and believe that the strategic plan should be a document that is
                  useful to the Congress and FEMA in implementing the Results Act but
                  should not be so voluminous and detailed so as to impede its utility. The
                  intent of our report is to provide suggestions for FEMA’s consideration.
                  FEMA officials also reiterated that they believe they are making good
                  progress in meeting the intent of the Results Act because they have been
                  incorporating strategic planning in FEMA’s operations since 1993. We
                  incorporated, where appropriate, changes suggested by the officials to
                  clarify certain information presented.


                  As arranged with your offices, unless you publicly announce its contents
                  earlier, we plan no further distribution of this report for 30 days. At that
                  time, we will send copies to the Minority Leader of the House of
                  Representatives; the Ranking Minority Members of your committees; the
                  Chairmen and the Ranking Minority Members of other committees that
                  have jurisdiction over FEMA’s activities; the Director of FEMA; and the
                  Director, Office of Management and Budget. Copies will be made available
                  to others on request.




                  Page 16                                  GAO/RCED-97-204R FEMA’s Strategic Plan
           B-277479




           Major contributors to this report include Dave Wood, Carole Buncher,
           Paul Bryant, Mark Connelly, Dianne Langston, James Hamilton, and Mike
           Volpe. If you or your staff have any questions concerning this report,
           please contact me at (202) 512-7631.




           Judy A. England-Joseph
           Director, Housing and Community
             Development Issues




(385688)   Page 17                               GAO/RCED-97-204R FEMA’s Strategic Plan
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