[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]


 
  DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, 

                                 AND

          INDEPENDENT AGENCIES APPROPRIATIONS FOR 2000

                                

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                              FIRST SESSION
                                ________

            SUBCOMMITTEE ON VA, HUD, AND INDEPENDENT AGENCIES
                   JAMES T. WALSH, New York, Chairman 

TOM DeLAY, Texas                     ALAN B. MOLLOHAN, West Virginia
DAVID L. HOBSON, Ohio                MARCY KAPTUR, Ohio
JOE KNOLLENBERG, Michigan            CARRIE P. MEEK, Florida
RODNEY P. FRELINGHUYSEN, New Jersey  DAVID E. PRICE, North Carolina
ROGER F. WICKER, Mississippi         ROBERT E. ``BUD'' CRAMER, Jr., 
ANNE M. NORTHUP, Kentucky            Alabama 
JOHN E. SUNUNU, New Hampshire 




 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

Frank M. Cushing, Timothy L. Peterson, Valerie L. Baldwin, and Dena L. 
                                 Baron,

                            Staff Assistants
                                ________

                                 PART 4
                                                                   Page
 Federal Emergency Management Agency..............................    1
 Corporation for National and Community Service...................  591

                              

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 57-609                     WASHINGTON : 1999

 

                 COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                    DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California               JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois          NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky               MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                 JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia               STENY H. HOYER, Maryland
 TOM DeLAY, Texas                      ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                    MARCY KAPTUR, Ohio
 RON PACKARD, California               NANCY PELOSI, California
 SONNY CALLAHAN, Alabama               PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York              NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina     JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                 ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma       JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                  JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan             ED PASTOR, Arizona
 DAN MILLER, Florida                   CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                  DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia                CHET EDWARDS, Texas
 RODNEY P. FRELINGHUYSEN, New Jersey   ROBERT E. ``BUD'' CRAMER, Jr.,
 ROGER F. WICKER, Mississippi            Alabama
 MICHAEL P. FORBES, New York           JAMES E. CLYBURN, South Carolina
 GEORGE R. NETHERCUTT, Jr.,            MAURICE D. HINCHEY, New York
Washington                             LUCILLE ROYBAL-ALLARD, California
 RANDY ``DUKE'' CUNNINGHAM,            SAM FARR, California
California                             JESSE L. JACKSON, Jr., Illinois
 TODD TIAHRT, Kansas                   CAROLYN C. KILPATRICK, Michigan
 ZACH WAMP, Tennessee                  ALLEN BOYD, Florida
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania   


                 James W. Dyer, Clerk and Staff Director

                                  (ii)


DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
              INDEPENDENT AGENCIES APPROPRIATIONS FOR 2000

                              ----------                              

                                            Tuesday, March 2, 1999.

                  FEDERAL EMERGENCY MANAGEMENT AGENCY

                               WITNESSES

JAMES LEE WITT, DIRECTOR
MIKE WALKER, DEPUTY DIRECTOR
GARY JOHNSON, CHIEF FINANCIAL OFFICER

                       Chairman's Opening Remarks

    Mr. Walsh. The hearing of the subcommittee will come to 
order. Our hearing today is with the Federal Emergency 
Management Agency, which has a budget request of $922,300,000 
for fiscal year 2000, an increase of $83,710,000 over the 
fiscal year 1999 appropriation for basic operations.
    In addition, disaster relief contingency appropriations are 
requested in fiscal year 2000 totalling $2,480,425,000, 
compared with $906 million provided in the Omnibus Consolidated 
and Emergency Supplemental Bill for fiscal year 1999.
    The committee would like to welcome back once again James 
Lee Witt, director of the Federal Emergency Management Agency. 
It is good to see you again. And to all of your staff, welcome.
    Mr. Witt, we will include your statement for the record. If 
you would like to summarize your statement, we will then move 
on to questions about your programs and your budget. And once 
again it is good to have you with us. We hope you have had 
enough time to get rest in between disasters, but please 
proceed.

                       Director's Opening Remarks

    Mr. Witt. Thank you, Mr. Chairman and good morning. Good 
morning, Mr. Mollohan and members of the subcommittee.
    Congressman Lewis and Congressman Stokes were great friends 
of FEMA, and were truly engaged in emergency management and 
everything that we do. Their advice and support over the years 
were indispensable in the six years that I have been at FEMA. I 
also feel fortunate to be working with you, Mr. Chairman, and 
the rest of the subcommittee because each of you knows the 
importance of what we do to local communities and states.
    Congressman Mollohan helped us kick off Project Impact in 
West Virginia. He knows the success of that program and what it 
is doing at the local level.
    I am looking forward to working with the new members on 
this subcommittee, as well as those who have served before. 
Together, we can continue to change the face of emergency 
management in this country. We have accomplished a lot already, 
but I believe that there is a lot more that we can do.
    With me today is Gary Johnson, our Chief Financial Officer. 
I cannot tell you how proud I am of the job that he, his staff, 
and the rest of the senior staff have done.
    One member of my staff who the subcommittee has not met 
before is our Deputy Director, Mike Walker. We are extremely 
proud to have him with us at FEMA. Mike most recently served as 
the deputy secretary of the Army and prior to that, was a 
member of the staff of the Senate Committee on Appropriations 
for several years.
    Mr. Walsh. And this committee, too, I might add, in the 
early '70s.
    Mr. Witt. He started off working in this room.
    Mr. Walsh. That is right.
    Mr. Witt. Also with us for the next several months is Chief 
Rich Marinucci from Farmington Hills, Michigan. Rich will be 
working with Carrye Brown, U.S. Fire Administrator, to address 
the blue ribbon panel report, and to develop an implementation 
plan for the fire services. The plan will lay out what we are 
going to do for the next two years to take the fire services 
into the 21st century, through our programs and the delivery of 
those programs. We thank Rich and the mayor for letting him 
come and do this work with us.
    Mr. Chairman, our 2000 request is not a ``disaster 
budget,'' I hope. Rather, it is leading in the direction of 
prevention for the future. The keys to saving lives and 
reducing costs are prevention, smart government and community 
responsibility. That is the direction in which we are going.
    This budget is a blueprint for the future, designed around 
the effective and efficient use of techniques and technologies, 
and based on three fundamental principles: prevention works, we 
can work smarter and more efficiently, and communities need to 
be empowered to take more personal responsibility.
    Instead of responding to disasters, we must do more prevent 
them. Instead of waiting to react, we must prepare now for the 
next flood, hurricane, earthquake, or wildfire--whatever the 
risk and threat that may be facing our nation.
    This is the direction that communities, states, and our 
partners and customers are going and it is working. It is 
saving money, cutting costs and serving our customers better.
    Mr. Chairman, we will be happy to answer any of your 
questions.
    [The following is the statement of Mr. James L. Witt:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Walsh. That was a true summarization. Looking at this 
packet here, there are any numbers of pages.
    It would be helpful to us, as I am sure everyone will have 
lots of questions to ask and this gives us an opportunity to do 
that. And if we do not get them all in, we will submit them for 
the record and you will have some time to respond to those.
    Mr. Mollohan, do you have any opening statements?
    Mr. Mollohan. Mr. Chairman, not other than to echo your 
sentiments about the good job that Mr. Witt and his 
organization are doing. We appreciate his efforts in West 
Virginia. He really is doing an excellent job and I know this 
is an agency that the subcommittee is very proud of. I share in 
that pride. Thank you, Mr. Chairman.

              need for supplemental disaster relief funds

    Mr. Walsh. Here, here.
    All right. Let us begin with questions. I will go first and 
we will go to Mr. Mollohan and then we will go back and forth.
    Apparently Thursday we are going to mark up an 
appropriation supplemental bill. Do you foresee any need for 
additional funding for FEMA for disaster relief activities, 
including relocation or buy-out initiatives for fiscal year 
1999?
    Mr. Witt. We have included funds for the relocation and 
buy-out initiatives in our budget request for 2000. At this 
time we do not see a need for a disaster supplemental. That is 
partly because of the close-out efforts that we put in place 
with the help of Gary Johnson and his staff.

                     insurance for public buildings

    Mr. Walsh. Great. A significant portion of disaster relief 
funding goes for repair or replacement of public buildings. 
Recently you have been involved in an effort to get state and 
local units of government to purchase insurance for such 
structures. What has been the reaction? When do you expect to 
finalize rules and regs regarding insurance on public 
buildings?
    Mr. Witt. Reaction has been mixed. We have many different 
variations of insurance on public buildings, from private 
nonprofits to state and local governments.
    So far we have had six meetings throughout the nation. We 
are meeting soon with the state insurance commissioners. We 
hope that in April we will be ready to go forward with the 
federal rule.

                        morgage transaction fee

    Mr. Walsh. The Flood Map Modernization Fund, the budget 
includes a proposal for a one-time appropriation of $12 
million. Continuing payments into this fund would come from a 
$15 fee assessed on each initial mortgage and mortgage 
refinance transacted in the country.
    Has this proposed legislation to implement the fee been 
evaluated by the House Banking Committee? Are there any 
hearings planned? And does Ways and Means have a say in this?
    Mr. Witt. The staff has been working with the Banking 
Committee staff. I recognize that this may be very difficult to 
get done. I do not think that they have worked with the Ways 
and Means Committee yet. We just started meeting after the 
President sent the budget up.
    It will cost approximately $900 million to update the flood 
maps across the country but, we have to do something to update 
these maps. Communities use these maps for future development, 
surveyors use them, engineers use them, and mortgage lenders 
use them, yet the only ones that are paying to update the maps 
right now are the flood insurance policyholders.
    These maps are very important to the future development of 
communities in order to help cut disaster costs, save lives, 
and strengthen those communities. We have to start somewhere to 
get these maps updated. We need to digitize the maps, and put 
them on the Internet so they can be accessed more easily. This 
is all part of the map modernization plan.
    We are 10 years behind in updating these maps and it is a 
hindrance to local governments.
    Mr. Walsh. This fee, as proposed and if authorized, would 
provide $63 million in fiscal year 2000. How did you arrive at 
that number and how did you derive the $15 figure? Why did you 
decide on $63 million when you were $900 million behind?
    Mr. Witt. It was based on what OMB and the Treasury 
projected from estimated mortgage transactions across the 
nation. If we started now at that rate, it would take us 
several more years to get those maps updated.

            need for increase for emergency food and shelter

    Mr. Walsh. Emergency food and shelter. The president has 
proposed adding $25 million or a 25 percent increase to that. 
There are a couple of ways to look at this. We have high 
employment, low unemployment. Logic would tell you that 
emergency food is not as necessary with that many people 
working.
    On the other hand, I am told that churches and charities 
and local governments are turning people away. What is going on 
out there?
    Mr. Witt. There is a demand to help people that are in 
serious trouble in the local communities across our nation. 
There is still a serious need to help supplement families. 
These are families that are very low-income--families that have 
not benefitted from the great economy that we are having now.
    It will take time for these people to get out of their very 
tough position. Even though we are moving people from welfare 
to work, there is still a demand to help supplement those in 
need.
    This program is probably the most cost-effective, Federal 
program that is beneficial at the local level. The 
administrative costs of this program are just over 2 percent. 
We have only two people devoted totally to this program at 
FEMA. By working with the Red Cross, the United Way, Catholic 
Charities USA and other non-profit organizations, thousands and 
thousands of people have benefitted from this program.
    Mr. Walsh. Do you have an estimate of how many dollars each 
one of these leverages in the private sector from charity and 
otherwise?
    Mr. Witt. I am not sure.
    Kay, do you have anything on that? Kay Goss, is the 
Associate Director for Preparedness, Training and Exercises.
    Ms. Goss. I would like to introduce Brother Joseph Berg. We 
call him our ``founding father'' of the Emergency Food and 
Shelter Board.
    Mr. Walsh. Did you say brother? Is that Christian Brother?
    Brother Berg. Holy Cross.
    Mr. Walsh. Good. We will get along. I had Christian 
Brothers for high school. They were tough. Welcome.
    Brother Berg. Thank you.
    Ms. Goss. Estimates are being compiled and I would be happy 
to provide them to the Subcomittee when they survey is 
completed.
    Mr. Walsh. You would like to submit those for the record? 
Fine. Thank you.
    One last question. One of your initiatives for fiscal year 
2000 will be to address the issue of repetitive loss 
properties. For this effort you have requested $32 million, an 
increase of $12 million over the amount established by the 
Flood Insurance Reform Act of 1994.
    GAO has been critical of your buy-out and relocation plans 
in the past, noting instances of excessive cost. What reforms 
and procedures have you put in place to ensure that if you 
receive this additional funding, it would be used wisely?
    Now this would be in a situation in a floodplain probably.
    Mr. Witt. Right. Let me say something about the repetitive 
losses and also the buy-out relocation program. In 1993, we 
changed the percentage of funds from 10 percent to 15 percent 
in the mitigation program with the Volkmer legislation that was 
passed after the 1993 flood.
    We have bought out and relocated over 20,000 pieces of 
property. That property reverts back to the local government--
city or county--for open land use management. It is 
environmentally good. It moves people out of harm's way and it 
saves money. Every dollar we spend on that program saves $2 in 
future losses. It has helped cut disaster costs. It has saved 
lives, saved jobs and saved property.
    What really got me interested in trying to do something 
more in this area of repetitive losses was when, Joann Howard, 
our Federal Insurance Administrator and her staff, went back 
and looked at program data over a ten-year period.
    It cost the National Flood Insurance Program $200 million 
annually for repetitive loss structures. These property owners 
are in a Catch-22 situation. We have paid claims that equal or 
exceed the value of some of these properties that have had four 
or more losses. The owners are in a situation where they cannot 
sell their properties. Most of this property is under, pre-FIRM 
subsidized policies. About 32 percent of our policies are.
    Targeting these repetitive losses will not only save on the 
claims that we continue to pay on these properties but it will 
also save disaster costs. It will help property owners to get 
out of a bad situation. It will move that property back into 
open land use management for the country and cities.
    The problem we have had is that there are more people 
wanting to be bought out or elevated or relocated than we have 
funds. If we can target the 270 properties with the most losses 
with the $12 million that would save $2.6 million a year.
    The long-term savings of this program is significant. It is 
it is good management, it can cut costs, and it will physically 
help to strengthen communities.
    We have seen this problem in West Virginia and in every 
State that we have been. New Jersey, Texas, Louisiana and New 
York are the highest repetitive loss areas.
    Mr. Walsh. Do people, homeowners, property owners, who 
participate have to be carrying flood insurance?
    Mr. Witt. Most of those property owners will have flood 
insurance because that is the only way they can even continue 
to live in the floodplain.
    Mr. Walsh. Is that a qualification to participate in the 
relocation?
    Mr. Witt. No, it is not.
    Mr. Walsh. It is not?
    Mr. Witt. No. I will give you an example, and I am sure, 
Mr. Chairman, you have seen this. I was in a house in 
Pascagoula, Mississippi owned by Mr. and Mrs. Brown. They lived 
in that house 51 years.
    They are retired people on a fixed income and the husband 
has emphysema. When I walked in that house, they had their 
furniture sitting on three bricks because they knew how high 
the flood water could get. They had flood insurance, they had 
been flooded 41 times in 51 years, and they could not afford to 
sell their house. They could not get out of that situation.
    There are 184 homes in Pascagoula, Mississippi that have 
suffered repetitive losses. It is a serious problem in our 
nation and it is something that we need to address and we can 
do it and it is cost-effective and it makes a difference to 
people. That is something we are to trying to do.
    Mr. Walsh. Have you responded to the GAO, you think, 
constructively?
    Mr. Witt. Well, basically GAO and our inspector general 
both said that we need to do a cost/benefit analysis on each of 
these properties.
    If there is a piece of property that has been damaged over 
50 percent of value of that property, would you repair it, let 
it stay in a 100-year floodplain so that it can flood again?
    I look at the cost-effectiveness of this. If you have a 
block of houses, say there are 10 houses and all 10 houses have 
been flooded four, five, or six times, you know that they are 
going to get flooded again. I would rather try to get all of 
them out of there. We want to stop paying money in disaster 
costs.
    So that is the cost-effectiveness of each individual 
structure. It is like a car. If you have a wreck and damage 60 
percent of that car, do you still want to make car payments on 
that car and get it fixed? It is just common sense to look at 
this in a way that we can save money and make a difference.
    Mr. Walsh. The difference there is that no one from the 
government is going to bail out that car owner.
    Mr. Witt. That is true.
    Mr. Walsh. Mr. Mollohan. Thank you very much.

                       success of project impact

    Mr. Mollohan. Thank you, Mr. Chairman.
    A couple of questions about Project Impact, just to catch 
up with this and get your status report on it. Could you 
elaborate on how Project Impact is going? Are you meeting your 
goals? Is it a successful program? What benefits can we expect 
after the program becomes more mature?
    Mr. Witt. Congressman, the success of Project Impact is 
just incredible. Mike Armstrong, Associate Director for 
Mitigation, has compiled some success stories on these 
communities, and we will be happy to provide that to you and 
your staff.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The first seven pilot communities that we started with a 
year ago were funded at a total of $5.7 million. They have 
leveraged that money to more than $26 million.
    The disaster cost savings generated by this program is 
going to be astronomical in the next few years. The success of 
it has just been incredible.
    Mr. Mollohan. When you say ``the success of it,'' at this 
point it is not too much more than a pilot, is it?
    Mr. Witt. It is still in the early stage, but we now have 
118 communities that are Project Impact communities. We have 
700 corporate sponsors that have joined us in Project Impact, 
such as Visa, Fannie Mae, and Washington Mutual. A lot of 
community banks are providing low-interest loans to help people 
do prevention. Fannie Mae has worked up a low-interest 
signature loan program of up to $15,000 for individuals to do 
prevention activities.
    The overall concept of this program is for the communities 
themselves to make the program work, with us providing the 
assistance, and with minimal funding.

                measuring the success of project impact

    Mr. Mollohan. Have you developed some sort of a measurement 
technique to judge success over time? I guess some of these 
communities have to experience a couple of disasters in order 
for you to begin making that judgment, but can you talk with us 
a little bit about that?
    Mr. Witt. One of the successes I can point to is in 
Oakland. They put in place an Adopt-a-Drain program in their 
community, where an individual or a neighborhood adopts a 
drain. The city would give them a rake and a raincoat to use to 
keep the drains cleared during rainy seasons. They estimate 
they saved $8 million by that simple program because they had 
no flooding during the rainy seasons in Oakland.
    The standards and measures that we are going to use for 
what they are doing now are reflected in the cost savings in 
future disasters.
    Mr. Mollohan. Do you have some kind of a matrix that you 
are looking at so that over time, you will be able to judge the 
successfulness of these prevention programs and Project Impact?
    Mr. Witt. That is what we are doing now with the success 
stories of each community. The regional offices are providing 
us with stories about what the communities have accomplished to 
eliminate the risk in that community and what follow through is 
needed. I think by targeting the risk to be eliminated we will 
be able to meet the goals of saving money in the future and 
saving lives.

                  cooperation with corps of engineers

    Mr. Mollohan. Somehow it would be really good to have some 
sort of a dollar savings standard, I guess.
    I was with the Corps of Engineers about a week or so ago 
and they were talking about an initiative that they were 
undertaking to coordinate disaster prevention strategies and to 
develop a predisaster prevention plan and then, once a disaster 
occurs, an action plan.
    I sat there listening to them thinking that this sounds 
like James Lee Witt's Project Impact. So I inquired whether 
they were cooperating with FEMA. They were working with the 
state; that was his entry point for the discussion. But when I 
asked him to what extent is he cooperating with FEMA, I did not 
get the kind of answer I would have hoped for. It sounded like 
the Corps was on a parallel but separate path.
    Mr. Witt. The Corps works very closely with us. The program 
that you are talking about is called Challenge 21, I believe. 
We have talked to them about that program.
    What they are trying to do with their program is to target 
areas in a community for a buy-out relocation to either widen 
the levy or to have more river easement in order to stop future 
flooding.
    It is very similar to what we are doing with Project 
Impact. I believe they asked for funding last year for this 
Challenge 21 program.
    Mike.
    Mr. Armstrong. Mike Armstrong, Associate Director for 
Mitigation.
    The Challenge 21 initiative is based upon the watershed 
approach, as opposed to Project Impact, which is based on 
political subdivisions, such as cities or counties. Ideally, we 
hope the programs occasionally will overlap so we can perhaps 
leverage between the two programs a coordinated approach to 
prevention.
    We have had several meetings with the corps in particular 
Michael Davis. We have had a number of meetings to talk about 
ways to coordinate.

  working with hud on community development block grants for disaster 
                                 relief

    Mr. Mollohan. Well, they are going to be spending a lot of 
resources on this. You are spending a lot of resources on 
Project Impact, which I commend you for doing. I think I see 
those two programs--yours and rthe Corps'--really as one in 
West Virginia, because we continuously have the Corps of 
Engineers meeting with our local communities and they do talk 
about watershed issues. And we continuously have you all 
talking to our communities as well. These are both prevention 
programs, so I simply encourage you to work together, to the 
extent possible.
    Speaking about cooperation, the Department of Housing and 
Urban Development has received special appropriations from this 
committee in the Community Development Block Grant program 
specifically for disaster relief.
    Are you all cooperating with them in regard to this 
program? And how do you see what they are doing as being 
different from what you are doing with Project Impact?
    Mr. Witt. The appropriation for unmet needs to which you 
are referring was given HUD, I believe, last year. The language 
specified that the funding be 75/25 cost shared and that FEMA 
would coordinate with HUD in identifying those unmet needs that 
HUD was to fund after a disaster.
    Mr. Mollohan. An unmet need is defined as a need that your 
program cannot reach?
    Mr. Witt. Yes, sir. That is what it is.
    Mr. Mollohan. What would be an example of a situation where 
you had an unmet need?
    Mr. Witt. A good example is if in West Virginia there was 
an area that was flooded or destroyed, and there was a housing 
problem where FEMA could not help. That HUD program would then 
be used to meet the housing problem.
    Mr. Mollohan. You mean in developing housing for peoplewho 
had been wiped out?
    Mr. Witt. Yes, or buying-out and relocating homes in a 
floodplain.
    Mr. Mollohan. Do you see that as complementary with your 
program?
    Mr. Witt. Yes, it could be. It helped us in Grand Forks, 
Minnesota, North Dakota and South Dakota.
    Mr. Mollohan. What do you mean by ``could be''? Is it or is 
it not?
    Mr. Witt. The problem we have had is that there are more 
unmet needs than there is money.
    Mr. Mollohan. Well, when I think of Project Impact, I think 
of that. It needs to be scaled up.
    Mr. Witt. I agree with that.
    Mr. Mollohan. So you are saying the problem with the HUD 
program is that there are not enough resources in that program?
    Mr. Witt. Yes. The reason the program is good is that a lot 
of states or local governments may not have the money to meet 
the cost-share, that could help meet that cost-share in a large 
disaster, and the CDBG dollars are flexible for that purpose, 
where our programs are not.
    We collect the information from the state and local 
community on unmet needs. Then what we do is advise HUD of the 
unmet needs in that community, or in that state. Then HUD tries 
to fund the unmet needs.

             Continuing to work with the corps of engineers

    Mr. Mollohan. Well, you are really good about looking at 
programs in new ways, and this area of cooperating and 
complementing resources seems to me to be something that we 
ought to explore aggressively and see where the interfaces are. 
The examples that come to mind are the Department of Defense, 
with its terrorism activities, and with regard to disasters, 
the Corps and HUD. I encourage you to use your good instincts 
to look and see where the synergisms are. We certainly need it.
    I will repeat the chairman's comment about your good 
program. I would just like to express appreciation on behalf of 
my constituents for your efforts.
    We have experienced a lot of flood disaster, Mr. Chairman, 
and not only is FEMA there but James Lee Witt is somehow there 
for every disaster. We really appreciate that personal 
attention and look forward to working with him. Thank you, Mr. 
Chairman.
    Mr. Witt. I agree with looking at different programs to 
coordinate efforts. Mike Walker is leading the federal family 
in looking at programs, including FEMA's programs to see if 
there may be duplication of efforts, and find ways to 
streamline in order to complement each other.
    Mr. Walker. We will have a report on that in a few weeks.
    Mr. Mollohan. Well, the Corps sounded like they had their 
own program. It was kind of an ownership discussion.
    Mr. Witt. I accused them of copying ours.
    Mr. Walsh. It probably took six or seven years to get them 
together. You cannot expect them to abandon it that quickly.
    Mr. Walker. Mr. Mollohan, if I might add something about 
the Corps program, it started when I was the undersecretary of 
the Army. James Lee and I worked very closely to make sure that 
it was a complementary program and not a competing program.
    Let me say we worked very hard at the level of the 
assistant secretary for civil works and the chief of the Corps 
of Engineers.
    Now as it gets through the bureaucracy of the Corps, 
perhaps we need to do some more coordination.
    Mr. Mollohan. Thank you, Mr. Chairman.
    Mr. Walsh. Mr. Knollenberg.

                         cover America program

    Mr. Knollenberg. Mr. Chairman, thank you very much.
    Mr. Witt, welcome to all of your group. During my tenure in 
Congress, this is the one agency I think that stands out among 
all agencies, and many do stand out but yours stands out in a 
big way. I commend you for the work that you have done and all 
of you, all those that participate.
    I want to point out that my good friend Rich Marinucci, who 
is the fine chief in Farmington Hills, is from my district and 
I think you made a wise choice there, too. I do not know who is 
watching the fires, though, Chief. There is somebody in place 
of you, I am sure. But I think that is a great appointment, so 
I commend you.
    I wanted to talk about first the Cover America program and 
how that is working. I think there is something like 8.3 
million households that are still unprotected in those areas. I 
know you use radio and television, you have a 1-800 number and 
I presume there is advertising of one kind or another and 
through the agents themselves, the word is getting out.
    And I know that you made an impact on that but tell me in 
just a few words, how is that working? You are still not 
getting to all of them and maybe you never will and some of 
those homes are going to stay uninsured because there is 
probably no debt, no mortgage obligation, so there is no force 
that you can put on the drive to get them insured. Could you 
give us a status on that?
    Mr. Witt. Congressman, it is going extremely well. As you 
say, I do not think we will ever get everyone covered that 
needs to be covered, no matter what we do. But the one good 
thing is the 1994 legislation, the Flood Reform Act, has a 
clause that says if you are affected by a flood disaster once 
and you get federal help, then you are required to have flood 
insurance the next time or you will not be eligible for most 
disaster assistance.
    Mr. Knollenberg. This is brand new?
    Mr. Witt. 1994.
    Mr. Knollenberg. Does it affect pre-FIRM and post-FIRM? It 
affects everybody?
    Mr. Witt. Everybody that does not have flood insurance. If 
they have received federal disaster assistance once in the form 
of grants and so forth, then they will be required to maintain 
flood insurance. SBA has that, as well, for homes and 
businesses.
    Since 1993, I think, we have increased flood insurance 
policies by 30 to 40 percent.
    Ms. Howard. We have over a million new policies in the last 
three years.
    Mr. Knollenberg. I did not get that.
    Ms. Howard. Joann Howard, Federal Insurance Administrator.
    We have about a million new policies since 1995. However, I 
will be quick to add that part of that is a result of the 1994 
Flood Reform Act, which made it mandatory for lenders to 
require flood insurance for federally backed mortgages in flood 
plains. That accounts for about 66 percent of the one million 
new policies. The rest we feel is due to Cover America and our 
aggressive marketing.
    Mr. Witt. We have $492 billion in coverage now.
    Mr. Knollenberg. How does that compare with, say, 1994?
    Mr. Witt. How much over is it now?
    Ms. Howard. About 44 percent above. This is the largest 
single line property and casualty insurance in the United 
States.

                       Subsidized Flood Policies

    Mr. Knollenberg. Let me go to this whole question about 
subsidized policies. I know that the pre-1974 were subsidized 
and the post-1974 are not. Apparently there has been an 
actuarial kind of thinking that has gone on since that time, in 
recent years and particularly under your leadership.
    I think I heard you say that about 32 percent are still 
subsidized. Last year it was 36, I believe, so you are making 
some in-roads. Do you ever see that phasing out? Do you have 
any target? You have policies, I know, that have been on the 
books for years and years and you never get to ground zero on 
that.
    Mr. Witt. When Congress established the program the intent 
was to eliminate the subsidized pre-FIRM policies in about 20 
or 25 years. They have been reduced but not as much as they 
should have been.
    Since Joann and her staff and I have been looking at this, 
we are trying to do the buy-out relocations in repetitive flood 
loss areas to not only move people out of harm's way but also 
to get rid of the subsidized policies as well.
    Mr. Knollenberg. If I understand it, when you move somebody 
out of harm's way in this particular situation, with the 
requirement obviously that they get flood insurance on the new 
building----
    Mr. Witt. Well, hopefully they will not be in the 
floodplain.
    Mr. Knollenberg. Well, that is right. That is a whole other 
bag, which we could spend an hour on. But if, for example, they 
do remain in the neighborhood, shall we say, they would have to 
start a new policy that is not subsidized, that is, in fact, 
post-1974, right?
    Mr. Witt. Right. But if they built a new house, then it 
would have to be built according to the standards that move 
them out of the 100-year floodplain to an elevation. That way 
premium costs would drop.
    Mr. Knollenberg. The premium costs would drop?
    Mr. Witt. Yes, because they would be moving above the 100-
year flood elevation.
    Mr. Knollenberg. I understand. So that is a wrinkle, isn't 
it?
    Mr. Witt. Yes.
    Mr. Knollenberg. Actuarilly, though, there is that 
consideration, is there not, on that new policy?
    Mr. Witt. If they refuse the option of elevation or buy-
out, then basically they should be paying the actuarial rate 
based on that risk.
    Mr. Knollenberg. The important thing is that the subsidy is 
withering away, although not as fast as we would like but it is 
withering away to some extent.
    Mr. Witt. Yes. It is more than just getting rid of the 
subsidy. Congressman, there is such a demand out there to do 
something to move people out of harm's way. The 404 program has 
done a good job.
    I will give you an example. In every community that has 
have had a flood disaster, there are many people that want to 
get out of that situation, but just do not have enough money to 
do it, even though they have flood insurance.
    I was in a community in Kansas a few months ago that 
flooded. This one subdivision has 54 homes. That subdivision 
has flooded five times. And when you see everything people own 
out on the curb destroyed----
    Mr. Knollenberg. I can imagine.
    Let me ask you, is there anything that Congress can do to 
mitigate some of the Catch-22 provisions that seem to exist?
    Mr. Witt. The only thing that we can do now is just to try 
to carry out a more aggressive program in the repetitive loss 
area with buy-outs and relocations; don't you agree, Joann?
    Ms. Howard. Right. And of course we are interested in 
lender compliance.

                           Lender compliance

    Mr. Knollenberg. That would help. Is that working?
    Mr. Witt. Well, we do not know. We cannot get the 
information.
    Mr. Knollenberg. It varies during the year and then it goes 
away? Is that how it works?
    Mr. Witt. Yes, we cannot get Treasury to let us see if 
people are complying with it. That is the problem.
    Mr. Knollenberg. Well, I think I have probably exhausted my 
first five minutes, Mr. Chairman, but I want to come back with 
some other questions later. I will yield back.
    Mr. Walsh. Thank you very much.
    Mr. Price.

                 Emergency Food and shelter allocations

    Mr. Price. Thank you.
    Director Witt, it is a pleasure to welcome you to the 
subcommittee once again. I want first to thank you for sending 
a close-out team to assist North Carolina with the $110 million 
in hazard mitigation grant funds they received after Hurricane 
Fran. We are very grateful for the assistance rendered 
throughout the entire period after Fran.
    I also want to applaud John Copenhaver in Region 4 for 
initiating visits to each state. I think the first state he 
took his senior staff to was North Carolina and these types of 
trips, I think, will help to increase the level of 
communication between FEMA and the state emergency management 
agencies and I commend you for undertaking that kind of 
outreach.
    Like our chairman, Mr. Walsh, I am a strong supporter of 
the food and shelter program at FEMA and I want to follow-up on 
a line of questioning he was pursuing.
    I advocated for an increase in funding last year and was 
pleased to see the president recommend a $25 million increase 
to $125 million for fiscal year 2000. You told the chairman a 
few minutes ago that the administrative costs for the food and 
shelter program were about 2 percent.
    Mr. Witt. A little over 2 percent.
    Mr. Price. So that suggests the vast majority of this 
funding is getting to the local organizations.
    For fiscal 1999, when did the first awards go out? And 
when, from prior experience, do you expect the $100 million 
available this year to be awarded?
    Mr. Witt. Kay.
    Ms. Goss. Those funds go out almost immediately at the 
beginning of the fiscal year. It takes only a couple of weeks.
    Mr. Price. So for fiscal 1999, when do you expect the 
awards to be totally----
    Ms. Goss. Those went out as soon as our budget came through 
last fall.
    Mr. Price. So there is nothing at this point left to be 
allocated?
    Ms. Goss. Some areas have not claimed their allocation. In 
those cases we will reallocate it if that continues to be the 
case. But basically it is all out.
    Mr. Witt. The national board meets and then the money is 
allocated out very quickly to each community. It probably is 
allocated faster than any other funds we have.
    Brother Berg. Seventy-five percent is electronically 
transferred. The money goes out quickly.
    Mr. Price. All right. And what about needs, then, that 
arise later in the cycle? They simply have to find help from 
other sources?
    Ms. Goss. Well, our local recipient organizations would 
manage that as part of their budget and their plan for their 
area. But funds do run out. We are very hopeful the additional 
$25 million will help with that because they are continuing to 
have to turn people away.
    Mr. Price. So this early allocation, which exhausts the 
resources, definitely underscores the need for this additional 
funding.
    Ms. Goss. Yes, it does. There are more and more hungry 
children and more and more families without housing. As the 
economy improves, the cost of housing increases, so this puts 
special pressure on those who are in minimum wage jobs.

                 hud's funding for unmet disaster needs

    Mr. Price. Well, I very much hope we can heed that request 
and offer that additional support. Clearly it is needed.
    Turning to the unmet need discussion which you were engaged 
in with Mr. Mollohan, I am aware that you are working with our 
governor, Jim Hunt, to assist North Carolina in the aftermath 
of Hurricane Bonnie. We are fortunate, of course, that North 
Carolina was spared much of the destruction that was forecast 
to accompany this storm, although the destruction was bad 
enough.
    Now more than $25 million is needed to help alleviate the 
unmet needs still existing. Unless that funding reaches our 
state soon, many homeowners run the risk of being flooded again 
if another hurricane were to reach the coast, and so we do need 
to move that funding along.
    I am not sure I understand fully what has held the funding 
up, but I am aware there are disagreements between HUD and OMB 
on the structure of this unmet needs package. Can you elaborate 
on that?
    My other subcommittee is going to be talking to OMB 
Director Jack Lew later today so maybe I will learn something 
that I can take along to that hearing. But seriously, what is 
the problem here? What can be done to shake this loose?
    Mr. Witt. I do not know how HUD allocates its money. What 
we have tried to do is provide HUD accurate information on 
unmet needs to consider when funding these areas.
    I think the biggest problem they have is that there is an 
overwhelming need out there, and they are trying to determine 
which ones are critical and which ones they need to fund.
    Mr. Price. I understand that there is far more demand than 
can be met.
    Mr. Witt. I think that is the problem. There is such a 
demand and there is a lot of pressure for them to fund certain 
ones. Other than that, I do not know. Their normal funding 
mechanism is the CDBG to each state.
    Mr. Price. So as far as you know, there is no delay with 
respect to the way these packages are to be structures with 
respect to OMB?
    Mr. Witt. As far as I know, I do not think so. I do not 
think there is a hold-up at OMB. I think the one thing that 
they really truly need to focus on is after we have a disaster 
in a community and we see that unmet need in the state or local 
community, it should be first priority.

          consistent application of rules in disaster programs

    Mr. Price. Okay. Well, it certainly is a priority in North 
Carolina and we are hoping that those funds can come our way in 
a timely fashion.
    Finally, let me briefly follow up on the discussion we had 
last year. During the hearing a year ago I spoke with you about 
an appeal that we had under way from North Carolina to one of 
your decisions that concerned a subdivision sewer system you 
may remember that had been taken over by the state public 
utility commission before it was destroyed then by Hurricane 
Fran.
    Unfortunately, you denied North Carolina's third appeal in 
this case. I appreciated the professional way your staff 
communicated with us on this issue.
    Mr. Walsh. Faint praise.
    Mr. Price. But I am still disappointed in the final 
decision. It is like we tell our constituents on casework 
sometimes, we appreciate being communicated with but we still 
would like a different decision.
    One of the main reasons I am concerned about this decision, 
based on some of the things I have heard since the decision was 
rendered, is that sometimes across regions these decisions may 
not be made entirely consistently. Anecdotally, I have heard 
that the sort of claim we were pursuing in Region 4 was settled 
differently in other regions. I do not know if that is true or 
not.
    But let me ask you the more general question, are you 
satisfied that decisions are being made consistently across 
regions? And what kind of programs, training programs or other 
mechanisms do you have in place to ensure the consistent 
interpretation of rules and regulations across regions?
    Mr. Witt. Congressman, that is a very good question. Your 
timing is good because of what we have done to be consistent 
state by state and community by community.
    We have totally re-engineered the public assistance 
program. The Public Assistance program funds sewer lines and 
sewer treatment programs such as the project you mentioned.
    Also we are now hiring full-time Federal Coordinating 
Officers or FCO's, and each will be trained to be consistent in 
implementing policy from state to state.
    The re-engineering of the public assistance program is more 
focused at the state and local level. They will do their own 
estimates, and then we will work with them. The decisions will 
be made at the state and local levels and hopefully we will not 
have many appeals in the future. What bothered me about the old 
program was the long appeal process. We are trying to change 
that.
    We are now revisiting policies to make sure they are 
consistent and that decisions are consistent across the board.
    Mr. Price. What are you finding? Do you think some new 
measures may be necessary?
    Mr. Witt. I think they are absolutely necessary, yes, sir. 
Lacy Suiter, our Associate Director for Response and Recovery, 
is here and can speak to it more. I think the new program is 
working well.
    Mr. Suiter. In those communities or states where we have 
been able to administer the new program we have practically 
zero appeals. But where we do have appeal processes underway, 
there are now two levels of appeal. We have separate ``teams'' 
that look at these levels of appeal.
    In the case of Wake County, there were three levels of 
appeal and all three reached the same conclusions. None of them 
had information on the previous appeal process. Under the three 
level process, one level is regional, one was at the associate 
director level and then Mr. Adamcik, my deputy, made the 
recommendation to the Director on the final appeal. All three 
independently reached the same conclusion. I wish it could have 
been different.
    Mr. Witt. We have changed the appeal process under this new 
system. Instead of three appeals, there are two appeals which 
will streamline it. Further, we think that the new system that 
we are implementing will close out much faster and get the 
money into the local communities much faster.
    I think we will have few, if any, appeals under the new 
system.
    Mr. Price. Well, of course, it is good to have a recourse 
when----
    Mr. Witt. Oh, yes. That is why we still have two appeals 
left.
    Mr. Price. The main thing we are seeking, I think, is an 
efficient resolution and also a consistent resolution across 
the entire country.
    Mr. Witt. That is fair, yes, sir. That is what we are 
trying to achieve.
    Mr. Price. Thank you. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Frelinghuysen.

                       state funding for buyouts

    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Witt, good to see you again. I often point out when you 
are on television at a particular disaster and I say to my 
teenaged children, ``I know that man,'' and they will often 
say, ``He has a very funny accent.''
    But let me say you do a very good job and when you are out 
in the field, I think your personal involvement is reassuring 
to a lot of people.
    I am struck, as I look at my coffee cup here, that we have 
a change in leadership. The coffee cup says ``County of San 
Bernadino'' and our chairman is from Syracuse.
    Mr. Walsh. I will have to get you a County of Onondaga cup.
    Mr. Frelinghuysen. Right. And that sort of makes my point. 
The public perception is that all disasters occur in California 
or along the Mississippi and Ohio and goodness knows, there 
have been some incredible tragedies in those areas.
    You did point out in your earlier testimony that there are 
a number of states, including my home State of New Jersey, 
which is fourth in the country in the number of flood-prone 
properties that are insured under the National Flood Insurance 
program.
    I would like to know how many of the states you mentioned 
as having the highest repetitive flood losses are providing, in 
some part, their own dollars for buy-outs and other dollars for 
prevention activities.
    Mr. Witt. Every one of those states are providing 25 
percent in the buy-out and relocation process. That is the 
required cost share.
    Most of the states--I say most but every one of them has 
worked very hard to put together a state mitigation plan under 
section 409 of the Stafford Act, which includes the vulnerable 
flood properties during flood disasters. Also, last year you 
gave us funding for a mitigation officer in each state, which 
has really helped a great deal.
    So the states are really contributing, stepping up and 
helping to make this work. They are to be commended for doing 
that. They have done a good job.
    Mr. Frelinghuysen. Everybody is participating?
    Mr. Witt. Yes, sir.
    Mr. Frelinghuysen. Relative to targeting the repetitive 
loss properties first, you said you have had some successes. 
Where have you had successes and are there specific states 
where you have had successes?
    Mr. Witt. We have had success stories in every single state 
that has had a flood-related disaster and that is participating 
in buying-out and relocation activities. Each one of them is a 
success story in itself.
    I will give you an example. In Iowa they put together a 
report based on the success of each of the buy-out and 
relocation programs in flood-related disasters. Each state is 
now compiling information on their successes and cost savings 
in relation to what we spent.
    Under the open land use management program in Iowa, they 
took an area that was bought out and relocated, and worked with 
the Game and Fish Commission to put a nature trail through that 
area, replanted with the native flowers and grass, and put 
benches out there. Some of the areas even built ball fields and 
jogging trails.
    The success of this program has been unbelievable. New 
Jersey has been very active in the program, as well.
    Mr. Frelinghuysen. Of the 20,000 acres you mentioned?
    Mr. Witt. 20,000 pieces of property.
    Mr. Frelinghuysen. Yes, 20,000 pieces of property. Where 
are those properties?
    Mr. Witt. I can get you a list of those.
    Mr. Frelinghuysen. I would like to see a list of them. 
These are private properties, by and large?
    Mr. Witt. Yes, sir.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    contributions for project impact

    Mr. Frelinghuysen. From time to time we get questioned as 
to why we are bailing out private property owners and maybe 
that debate is for another day.
    To what extent are we getting contributions of public 
property for mitigation purposes and to what extent is your 
agency involved in that regard?
    Mr. Witt. The Project Impact program gets contributions 
from public/private partnerships. A lot of the communities that 
are Project Impact communities have targeted properties that 
have historically been flood-prone properties to elevate or buy 
out.
    The money that we have been able to utilize in Project 
Impact communities has been leveraged, 452 percent versus what 
we have put in it. Most of that is coming from the private 
sector.

              working relationship with corps of engineers

    Mr. Frelinghuysen. Apropos of what Mr. Mollohan was talking 
about earlier, the working relationship with the Army Corps, we 
assume on this committee, unless I am wrong, that there is a 
good working relationship between you and the Army Corps. If 
there is not, then there should be.
    I serve on the Energy and Water Committee and obviously we 
give resources to the various divisions for their work and I 
think we give them high marks for their work. Our assumption 
is, of course, that they work hand in glove with you. If there 
are any barriers or any impediments, and in some areas 
indications of not a high degree of cooperation, I think we 
need to know about it sooner rather than later. But they 
obviously have professional staffs and one would hope that 
there would not be any turf battles.
    Mr. Witt. Congressman, let me say this. We started a very 
aggressive partnership program with the 27 federal agencies 
that work with us in the Federal Response Plan, the plan we use 
to respond to natural disasters. I think we probably have the 
most unique federal family partnership of any agency.
    The Corps of Engineers has been very good working with us, 
although we can improve on things we are doing together to be 
more cost-effective and to streamline. That is what Mike is 
working on. But I can only say good things about the Corps.
    When I testified at the Water Resource Committee last year 
I felt it would be important that the Corps of Engineers do all 
levees rather than of FEMA having a part in levees. It would 
streamline things for local governments to be able to target 
one agency instead of three, because now the Corps has a part, 
we have a part and Natural Resource Conservation has a part. 
That is very confusing to a local government that is trying to 
address levee problems.
    Mr. Frelinghuysen. But our assumption is that you are all 
working together.
    Mr. Witt. Oh, yes, sir.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mr. Cramer.

                           tornado mitigation

    Mr. Cramer. Mr. Chairman, thank you.
    Welcome to the committee. I am your neighbor there in North 
Alabama. As opposed to the lower part of Alabama, we fear a 
different kind of disaster. They get normally hit by hurricanes 
and tornadoes, as well, but our main fear is tornadoes.
    Mr. Witt. Yes.
    Mr. Cramer. So we have had to be very vigilant and very 
aggressive as to how we are protected.
    And you talk about mitigation of disasters stemming from 
fires, earthquakes, floods, hurricanes, but I want you to talk 
a little bit about tornadoes.
    We fight from time to time unfortunately with the Weather 
Service over their modernization plan, their location of next 
rad technologies, their alarm systems for communities, as well 
as their location of fully staffed field offices that can allow 
our emergency management people to effectively coordinate 
warnings and Weather Service information.
    We are very frustrated. Our terrain there in North Alabama 
is very different from South Alabama in that we have the 
foothills of the Appalachian Mountains and so forth.
    What efforts is FEMA undertaking to address the issue of 
tornado mitigation?
    Mr. Witt. We allow states, under the hazard mitigation 
program, to take 5 percent of the hazard mitigation funds and 
prioritize it for their highest risk areas in order to do 
prevention. We give them that flexibility to do that 
themselves.
    In those 10 states that have been hit with tornadoes, we 
let them use 10 percent, on a one-time only basis to target 
their warning systems and to upgrade their capability for 
protection on tornadoes. In Alabama, you recall, we had that 
one F5 tornado for 22 miles that was just devastating.
    The Vice President pulled us together to work with NOAA and 
the Rural Electric Associations or REA's on early warning 
systems. The REAs have picked out where they are going to be 
putting their towers so that we will have wider communications 
capability.
    The other thing we did is work with Texas Tech University 
to develop a ``safe room.'' We just put that informational out 
this past year on the web, as well as provided it to states. We 
had a Safe Room Tornado Summit in Atlanta.
    Mr. Cramer. You have already had this?
    Mr. Witt. Yes, sir, last year. This initiative gives a 
homeowner or manufacturer the capability to build a safe room 
outside their house or inside their home that will protect up 
to 250-mile-an-hour winds for a cost of anywhere from $3,000 or 
$5,000.
    Mr. Cramer. Is this a new concept?
    Mr. Witt. Yes.
    Mr. Cramer. A new design?
    Mr. Witt. Yes, sir. Also we are getting comments on 
building or developing a safe room that manufactured home park 
owners could build in a manufactured home park, where spaces 
are rented out. A lot of the areas that are hit in a tornado 
are manufactured home parks, where there is little or no 
protection. They were destroyed. Using this idea, if someone 
owns a large manufactured home park, they could build this safe 
room which we will develop and design to improve the safety of 
that park, which I think is important.
    Through Project Impact, Tulsa is now piloting this safe 
room concept with real estate brokers, as well as home 
developers as I think any tornado-prone state should. It will 
help sell the house because of the increased market value and 
safety. You can use the room as a walk-in closet or you can 
even design it as a bathroom in the house.
    What is important in an F5 tornado is that you do not have 
much capability to withstand that. If you had a safe room for 
your family, you could keep them safe from injury or death.
    Mr. Cramer. Is that safe room designed to withstand an F5? 
I mean, could it?
    Mr. Witt. Yes, sir. 250-mile-an hour winds. You can replace 
the material things lost, but it is the safety of families that 
concerns us.
    I think that program is going to be very successful. I 
think we are going to see a lot more use of the safe room in 
the future.

          consolidated emergency management performance grants

    Mr. Cramer. Well, I congratulate you for your theme of pro-
active prevention. I think that is the smart way for agencies 
like yours to move.
    We occasionally, though, complain about your red tape. I 
notice that your statement refers to your consolidation that 
will help reduce administrative red tape for states.
    Mr. Witt. Yes, sir.
    Mr. Cramer. Keep up with that because the front line seems 
to think that it is a nightmare intervening with the different 
levels of your bureaucracy or processes.
    Mr. Witt. Well, Congressman, I was the state director of 
emergency management in Arkansas and I had 14 different funding 
sources to deal with. It was a nightmare.
    I think now we are on the right track to truly help the 
states to focus on what they need to be doing.
    Mr. Cramer. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you.
    Mrs. Northup.

                        earthquake preparedness

    Mrs. Northup. Thank you.
    First of all, before I ask any questions, I want to thank 
you for the work FEMA did in my district. In 1997 we had a 
flood that was in the 100-year category and it came very 
suddenly. It was absolutely unpredicted, neither the weather we 
had nor the flood that followed 12 hours later. You were there 
and did a good job. I really want to commend you. It is a 
chance to see first-hand what FEMA really does.
    I want to ask you a couple of questions. One of them is 
about earthquake preparedness and mitigation. There is some 
feeling in Kentucky that all of the preparedness work is done 
west of the Mississippi, in fact mostly far west. And you know 
there is a fault that actually goes through Kentucky that is 
expected to produce a major, major earthquake, and I just 
wondered if you could comment on the feeling that maybe we do 
not get the concentration of earthquake preparedness that we 
should.
    Mr. Witt. Congressman, Ron Padgett, your state director in 
Kentucky, does a great job and has been a really good friend of 
mine for many years. The state emergency management program in 
Kentucky has done a great job in the area of earthquake 
preparedness. They are a member of CUSEC, the Central United 
States Earthquake Consortium. I believe, seven states are on 
the executive board and 14 states are members.
    A major earthquake could occur on the New Madrid fault that 
runs through Arkansas, Kentucky, Tennessee and Illinois, you 
are right. We all recognize that. Since I am from Arkansas, I 
worked on that issue.
    But Kentucky has done a great job, and I can assure you 
they are just as much focused on that New Madrid fault as we 
are.
    Mrs. Northup. I do believe that we are focused on it in 
Kentucky. I know the General Assembly, when I was there, was 
really beginning to realize just what the predictions for 
possible catastrophe were.
    But in particular, I am interested in whether you all have 
a proportion of your money that you allocate to earthquake 
preparedness and how you target that money and whether or not 
you target that fault.
    Mr. Witt. Sure.
    Mrs. Northup. It is my understanding that it is every bit 
as threatening as any we have in the country.
    Mr. Witt. You are absolutely correct. Let me introduce Mike 
Armstrong, our Associate Director for Mitigation.
    Mr. Armstrong. It is nice to see you. We toured at the 
Grand Forks flood with Congressman Armey.
    Mrs. Northup. Yes.
    Mr. Armstrong. We give out about $4 million a year to state 
earthquake programs. All but seven states in the Union have 
earthquake programs. Each of our 10 regional offices also has 
an earthquake specialist. Some of the offices have two.
    In addition to the CUSEC organization, there are three 
other consortia, multi-state organizations, that we also help 
underwrite for the Central United States, the Northeastern and 
the Western states.
    In our role as the lead agency in coordinating the National 
Earthquake Hazard Reduction program, we have the consortia, we 
provide the state grants, we have the staff in our regional 
offices, and we also put out about $7.1 million for applied 
research, technology transfer, education.

                                hazus-99

    Mrs. Northup. I also wanted to ask you about the HAZUS-99 
development, which as I understand, through computers you 
estimate the effects of earthquakes. Is it primarily used for 
earthquakes right now?
    Mr. Witt. Primarily.
    Mrs. Northup. But is HAZUS going to be available for 
flooding, also?
    Mr. Armstrong. Yes. We have just begun this year moving 
away from the sole hazard, which has been earthquake for the 
past several years, to a multi-hazard approach. HAZUS is the 
acronym standing for Hazards United States. It is a loss 
estimation methodology.
    We piloted HAZUS primarily based upon the earthquake hazard 
and we are now moving to both the wind and flood hazard. I just 
recently talked to our people about fast-tracking the 
development of these next two modules because so many of our 
disasters are flood-based.
    Mrs. Northup. Well, I know that they are very interested in 
Kentucky and they are very interested in seeing the flood 
mapping come on line quickly. I think the last estimate they 
received was five years.
    Mr. Witt. The map modernization program? Yes.
    Following up on the earthquake discussion, in 1997 we had a 
federal response exercise with CUSEC.

               disaster relief emergency contingency fund

    Mrs. Northup. Yes. And lastly, why the forward-funding of 
the emergency money in this year's budget?
    Mr. Witt. Forward-funding?
    Mrs. Northup. Maybe I haven't quite understood this but 
when I looked at the amount----
    Mr. Witt. Oh, the emergency contingency fund?
    Mrs. Northup. Yes. Last year it was $906 million. This year 
it is $2.4 billion.
    Mr. Witt. There is $300 million requested in our budget for 
the appropriation for the Disaster Relief Fund. The contingency 
fund is for the future if we have a catastrophic disaster.
    Mrs. Northup. Well, it is almost three times as much as 
what was appropriated last year, if I am reading this 
correctly. I wondered----
    Mr. Witt. The supplemental we asked for last year was based 
on what was needed because of disaster costs.
    The five-year average is about $2.6 billion a year.
    Mrs. Northup. But do we usually forward-fund that or do we 
appropriate it in emergency appropriations, once the disaster 
occurs?
    Mr. Johnson. It has happened a number of ways, Mrs. 
Northup, over the past couple of years. The budget request that 
you are looking at is consistent with FEMA's past practice of 
budgeting for disasters. What we have, as Director Witt 
indicated, is $300 million requested for the direct 
appropriation, accompanied with an emergency contingency 
request of $2.4 billion.
    The combination of the $300 million and the $2.4 billion 
represents the five-year average obligations for the disaster 
relief program, less the Northridge earthquake, plus disaster 
support costs. That has been our benchmark for budgeting for 
disasters for the past number of years.
    The emergency contingency request is based on the 
administration's reading of the 1992 Desert Storm/Desert Shield 
supplemental. In that particular legislation that provided 
disaster assistance, the language indicates that any amounts 
above $320 million or the president's request, whichever is 
less, would be regarded as emergency requirements and subject 
to the emergency requirements of the Balanced Budget Act of 
1990.
    So what has happened in the past, Congress has used a 
number of alternatives in terms of funding the contingency 
requests, either through supplemental appropriations or taking 
a budget request and then offsetting it against other 
requirements.
    Mrs. Northup. Well, I guess my concern is that the five-
year average only changes by one year input each year.
    Mr. Johnson. That is right.
    Mrs. Northup. So last year's five-year average would not 
have changed significantly. So the question is do we usually 
actually forward-fund in emergencies?
    My concern, quite honestly, is that if emergency funds are 
appropriated ahead of time, that it invites the political use 
of them, quite honestly. And what Congress has done so far is--
I have not been here long but in the years I have been here, is 
to respond to emergency funding as it is needed, except for a 
small portion.
    Mr. Johnson. I understand where you are coming from and 
where the Congress is coming from and I know Director Witt 
understands the need to adequately budget for disaster relief.
    Right now if we look at our forecast for this year, as 
Director Witt indicated, we do not foresee a need for a 
supplemental. But for fiscal year 2000, it is very clear that 
we would need some or almost all of that emergency contingency 
request or an appropriation to meet what we estimate our 
requirements to be for fiscal year 2000.
    Since we have adopted the five-year average, a rolling 
average, our obligations have, in fact, exceeded that average 
every year unfortunately.
    The real difficulty of this is trying to forecast what 
Mother Nature is going to throw at us in the future. As we 
stand right now in the current fiscal year, we are running 
about $300 million under our five-year average. And I think all 
of us in this room would like to see us keep below that five-
year average.
    Mrs. Northup. Thank you.
    Mr. Walsh. Mrs. Meek.

                   funds leveraged for project impact

    Mrs. Meek. Thank you, Mr. Chairman.
    Welcome, Director Witt and members of your staff. I am very 
happy to see your agency progressing, as usual. Each year I 
have to compliment you on the efficacy of your staff and what 
you do and tell you how much we appreciate the work that you 
do.
    I am also happy to see that even though you have a mission 
for the big disasters, the natural disasters, you also seem to 
have an issue with smaller ones, the personal disasters that 
happen with fires and job loss and all those kinds of things, 
which to me expands your mission to the many kinds of small 
things that we face as congresspersons.
    I think that your investment that you ask for, you told us 
how you use the $100 million that this committee appropriated 
last year and you also mention how you intended to use the $25 
million in your request. I understand that question was 
answered before I came.
    My question is does FEMA have any information as to what 
kind of leveraging has been done on the local level, with the 
vast amount of monies that you have used in these various 
areas? If that information you feel is necessary?
    Mr. Witt. Oh, absolutely it is necessary and we will be 
happy to get you a copy of the progress of those communities in 
your state in particular.
    [The information follows:]

                   PROJECT IMPACT LEVERAGES IN FLORIDA
------------------------------------------------------------------------
                                                          Non-federal
     Project impact community             FEMA's         contributions
                                       contribution       (estimated)
------------------------------------------------------------------------
Deerfield Beach...................         $1,000,000         $3,000,000
Pensacola/Escambia County.........           $300,000              (\1\)
------------------------------------------------------------------------
\1\ Signing ceremony scheduled for 5/19


    Some of the many participating non-federal partners in 
Florida include: Florida Power and Light; Solutia, Inc.; Home 
Depot; Bell South; Chase Manhattan Bank; and Fort Lauderdale 
Sun Sentinel.
    Mr. Witt. Project Impact monies have been leveraged 452 
percent in comparison to what we put out.
    The private sector has really stepped up. The reason the 
private sector is so interested in doing this prevention up-
front before a disaster happens is that it helps keep their 
businesses open and it helps keep people working so that they 
can continue to manufacture.
    So it is a very good partnership.

                          preventing disasters

    Mrs. Meek. Thank you. This question probably has been 
answered but I am a little unclear as to how FEMA is proposing 
to spend, what you intend to do with your disaster mitigation. 
I am sure you have answered that but page 6 of your budget 
justification talks about a total of $125.3 million and I am 
sure that that $125.3 million is spread over a variety of 
programs, Mr. Witt. Can you explain that to me?
    You are putting more emphasis on predisaster and you talk 
about maps and everyone in my area is so concerned about these 
flood maps and what they will mean. I am from a flood area.
    So you are in a position right now, I am sure, to prevent 
disaster instead of merely reacting to it. Tell me a little bit 
about your plans for this.
    Mr. Witt. The important thing is we cannot stop a disaster. 
Nobody can stop a tornado, hurricane or flood. But we can sure 
help prevent the devastation from it. That is what pre-disaster 
mitigation is about.
    The flood mapping which you are talking about is absolutely 
critical and we talked about that earlier. Our plan is to get 
those flood maps updated so communities can do better planning 
and preparedness and so mortgage lenders can use them.
    We are trying to do the flood mapping in different ways. We 
want to contract with a community that has the capability to do 
the updates itself in order to do it faster and cheaper. We 
will then review the maps ourselves. When it comes time to redo 
the maps, it should avoid the current situation of the 
community hiring a firm to come in and challenge us or file 
suit against us saying the maps are not right, and spend all 
that money doing that.
    By working with the community on the mapping, it will 
develop a better partnership, and will get them done much 
faster and more accurately.
    Mrs. Meek. Does the community determine the technology that 
will be used?
    Mr. Witt. Sure.
    Mrs. Meek. And if so, does FEMA pay for it or does a 
contractor?
    Mr. Witt. I would rather pay the community to do it than a 
contractor, so we are working with communities that have the 
capability to do them. This is what we are starting to do.
    Mrs. Meek. Thank you, Mr. Chairman. I submit my other 
questions for the record.

          consolidated emergency management performance grants

    Mr. Walsh. Thank you very much.
    Mr. Hobson.
    Mr. Hobson. Thank you, Mr. Chairman.
    It is good to see you again, Mr. Witt.
    Mr. Witt. Nice to see you, sir.
    Mr. Hobson. Mr. Walker, nice to see you again. Different 
hat this time.
     You know I have enjoyed working with your agency. You have 
been very helpful. I have been impressed with the people you 
have in our state. Of course, it is kind of bittersweet to lose 
Dale Shipley to Chicago and Region 5. Is he an Army officer?
    Mr. Witt. Yes, sir.
    Mr. Hobson. The Army is taking over FEMA at certain levels 
here. They're both quality people and I am happy to see him 
there.
    I want to ask a couple of questions, if I might.
    As you know, I have been a strong advocate of getting 
federal funds back to our states to help the local EMAs 
administer their programs. Under this year's budget, the new 
EMPG block grant will enable the states to better meet their 
needs by giving them more flexibility and more resources.
    I am glad that the EMPG consolidated block grant combines 
the state and local assistance and mitigation grants into one 
streamlined flexible program. If you disagree with any of this, 
I want you to tell me as we go through this.
    Mr. Witt. I will.
    Mr. Hobson. However, the transition in this year's budget 
to the block grant form is not so clear. Can you clarify first, 
which funds have been combined so we are clear that states are 
truly benefitting from this new block grant?
    Also, your budget proposes an increase of $10 million to 
build state and local emergency capabilities focused on 
emergency management and professional development for the 
states. Will the states have flexibility in using these 
resources or are there mandates tied to these resources?
    Mr. Witt. First of all, there is state and local funding 
that will not be part of that block grant. For example, the 
anti-terrorism 100 percent grants will not be part of the 
consolidated grant. The CSEPP program and the flood program 
will not be included. The rest of the training and exercise 
fundings that go down to states will be consolidated into one 
funding stream to states.
    The purpose of this is to help save administrative costs on 
both ends, free up staff people, and to target the high risks 
in a particular state. Not every risk affects every state. They 
do not have the same risks. So this will give them more 
flexibility to target those risks and to work much more closely 
with the local community.
    I think it will work. I know it was a nightmare before. 
Over the last years we have worked with the states to move in 
this direction. They are very excited about this.
    Mr. Hobson. I have another quick question, if I could, Mr. 
Chairman.
    Mr. Walsh. Sure.

                  dollars leveraged by project impact

    Mr. Hobson. I want to talk a little bit about pre-disaster 
mitigation. Two sites, and neither of them are in my district 
but one is in Colerain Township near Cincinnati, where I grew 
up. I am glad to hear about communities like Colerain Township 
taking pro-active steps to combat flooding by installing 
additional storm water pipes and adding another storm water 
retention system. I look forward to monitoring their programs, 
and I am sure you will too.
    This year you request $30 million for predisaster 
mitigation,including Project Impact. This is the question I 
want to ask you, and you discussed this previously with Mrs. Meeks. How 
much money is coming from the private sector for this program? You 
talked about percentages but what are the real dollars you are talking 
about?
    Mr. Witt. Let me use as an example the first seven 
communities that we piloted, because we have that documentation 
already. We are compiling estimates now on the amounts that the 
communities or the private sector are putting up.
    It has been leveraged. In the first seven pilot communities 
we leveraged $26 million from $5.7 million. The private sector 
is truly coming up as a partner and working hard to help these 
communities to eliminate their risks.
    The percentages are astronomical. It is probably 10 to 1. 
Is that correct, Mike?
    Mr. Armstrong. Absolutely. In the first seven pilots we 
leveraged about 452 percent beyond the federal contribution. 
And in the other communities we have leveraged about 234 
percent to date.
    Mr. Hobson. Well, I think this is a great way to prevent 
repetitive damage. Hopefully in some of these smaller 
communities, like St. Paris, Ohio, which is in my district, 
where we had a flooding a few years ago, FEMA was very helpful 
to us throughout that situation.
    I have a couple more questions that I will submit for the 
record. I would like to know about FEMA's readiness for the 
Year 2000.
    Mr. Witt. Mike has taken that on as a challenge.
    Mr. Walker. Almost full-time, Congressman.
    Mr. Hobson. I would also like to ask about your rent. I 
always ask this of everybody. I would like to know, and you can 
do this for the record, if there is an overall increase for 
2000 and if so, how large is the increase. That is one of the 
things that we like to monitor.
    Mr. Johnson. Mr. Chairman and Mr. Hobson, I can provide 
that for the record for you.
    Mr. Hobson. And I have one question on counterterrorism 
that I will submit for the record.
    Thank you, Mr. Chairman.

      sustaining state and local emergency management capabilities

    Mr. Walsh. Thank you very much.
    Well, if everybody has had one chance, we have another half 
an hour scheduled. So if we all go fairly quickly, maybe we can 
get another question or two in.
    I have two questions specifically regarding states, one 
more specific than others. Your proposal for emergency 
management performance grants would shift some of the 
responsibility but also some of the costs to the states, who go 
from 75/25 to 50/50.
    Does your fiscal year 2000 budget request include 
sufficient funds to maintain the same level of state and local 
government emergency management capabilities as in prior years?
    Mr. Witt. Yes, sir. I think it is going to enhance 
capability by going to the single grant program for the states. 
We have been working with the states for the past three years 
to go to the 50/50 cost share. It took three years because the 
state legislators had to realign their budgets to address that 
shift.
    Gary, do you want to speak to that?
    Mr. Johnson. Mr. Chairman, if you were to compare 2000 
request for the funding streams that we propose to put into the 
consolidated grant to the current year, there is a net increase 
of about $12.4 million going to state partners. A sizable part 
of that is a $10 million increase in funds that this year 
support state and local emergency managers.
    Mr. Witt. When you look at the numbers in a state, there 
are so many county or city emergency managers, depending on the 
population. Part of those state and local funds support 50 
percent of the salary of the local emergency manager.
    Part of that increase we are requesting will help 
communities participate in the emergency management program. It 
all goes back to a community being better prepared. This will 
help all the communities get better prepared.

                 fema's role in determining unmet needs

    Mr. Walsh. Okay. Specific question. The 1998 supplemental 
appropriations bill appropriated $130 million through the CDBG 
program for unmet needs. Mr. Price asked a number of question 
about this.
    Statutory language said that HUD, in conjunction with the 
director of FEMA, would allocate funds based on unmet needs 
identified by the director as those which have not or will not 
be addressed by other federal disaster assistance programs. 
Unmet needs are defined as those that have not or will not be 
addressed by other federal disaster assistance programs.
    What role did FEMA play in determining unmet needs which 
formed the basis for the allocation in the supplemental funding 
specifically as regards the Northeast and the ice storm in '98?
    Mr. Witt. Working with the state and local communities, we 
followed up after our initial response and provided in writing 
to HUD all of the critical areas we felt were unmet needs. We 
shared that information with HUD so that they could make their 
allocation to meet those unmet needs.
    Mr. Walsh. What we experienced amidst the disaster and the 
effect on agriculture and property owners and so forth was that 
the utility, the public utilities, and these are investor-owned 
utilities, had carried the burden of the cost of the disaster. 
Most of these unmet needs were presumed to be those.
    What is your view of supporting the costs for repairing the 
utility network as an unmet need that could utilize these 
funds?
    Mr. Witt. I think it is important to help to get the power 
restored that the debris removal is treated as an unmet need. 
It is absolutely critical to get it out of the way so that they 
can put their power back up. The utility companies incurred a 
lot of costs to make sure that they can get in and put the 
power back up. We have addressed some of those debris removal 
costs with our program.
    I was in the Upstate New York area and I saw the 
devastation up there. That was an unprecedented size of 
disaster for that area, so they had exorbitant costs.
    I did not have any problem with that because they did a 
great job in trying to meet the needs of the people, including 
the farmers, and the dairy farmers who are so critical. We 
provided information to HUD, but I was not part of the 
decision-making on funding.
    Mr. Walsh. Could you advise us? Is FEMA's view that their 
recommendation was not followed?
    Mr. Witt. Do you have a response on that, Lacy?
    I know there were several meetings on this.
    Mr. Suiter. A long-term recovery report was prepared 
jointly between the Mitigation Directorate and the Response and 
Recovery Directorate, which addressed a number of issues and we 
provided to HUD the different areas of funding of unmet needs 
that might be required.
    Mr. Armstrong. Our main role with HUD has been data 
collection. We survey the state to retrieve information from 
the state emergency management directors. They give us their 
best estimate of unmet needs.
    We then forward that information to HUD. HUD has devised 
its own formula to weigh different categories to come up with 
their final allocation. After we submit the data to HUD, HUD 
takes it from there.
    Mr. Suiter. Specifically there is a final report on the ice 
storm to which you are referring, sir, which we can provide to 
you. That report shows what the different agencies did, 
including HUD, Agriculture, and others.
    Mr. Walsh. And you identify the cost of that debris removal 
in that report?
    Mr. Suiter. Yes, sir. It was a lot more than just debris 
removal. We had to fly in with generator units and things like 
this.
    Mr. Walsh. That was associated to those costs?
    Mr. Suiter. It was all associated with the emergency costs 
FEMA paid related to the storm.
    Mr. Walsh. Do you have an idea what the ballpark, what that 
figure was?
    Mr. Suiter. I will get it off the record.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Walsh. All right. I will submit a number of other 
questions regarding that specific case because we feel that 
FEMA's response was solid and effective but the follow-on to 
this disaster has been very difficult for communities and for 
industry. Thank you.
    Mrs. Meek.

                       minority employees at fema

    Mrs. Meek. Thank you, Mr. Chairman.
    Mr. Witt, your being a fellow southerner, as I am, when 
your agency comes before this group, and on each committee I 
serve I really look around to see what kind of minority 
representation you have. I am sure there are a lot of them back 
at the office, back wherever, but very few of them are 
represented here. I am hoping that that is not a representation 
of your agency.
    Before Mr. Stokes left, in all those years he was here, and 
everyone else, including our current chairman having been over 
at the D.C. Committee and all, we are concerned about the 
representation of minorities in FEMA. It is a solid agency with 
a solid record and, of course, all the men are good-looking 
that are here, but I do not see a lot of women and I do not see 
a lot of minorities. I am concerned about that, seriously.
    Mr. Witt. Let me address that. You are absolutely correct, 
Congressman Stokes was very clear to me and the managers in our 
agency that he wanted us to focus on this issue. He was very 
helpful, as you have been. We can provide the statistics to 
tell you what we have done.
    [The information follows:]

        FEDERAL EMERGENCY MANAGEMENT AGENCY DATA FOR FISCAL YEAR 1998 PROCUREMENT GOALS AND ACHIEVEMENTS
----------------------------------------------------------------------------------------------------------------
                                                                         Goals                 Achievements
----------------------------------------------------------------------------------------------------------------
Total dollars obligated.......................................             $200,000,000             $213,248,833
Awards to small businesses....................................               41,000,000               44,968,771
Section 8(a) awards...........................................               12,000,000               16,326,945
Other than 8(a)...............................................                7,000,000           \1\ 25,960,934
Women-owned businesses........................................                4,500,000           \1\ 14,692,995
Hub zones (not required)......................................                      N/R                      N/R
Prime contractors.............................................                9,000,000           \2\ 59,716,832
Small business subcontracts...................................                7,000,000               42,033,399
Disadvantage Subcontracts.....................................                4,000,000                6,612,443
Women owned subcontracts......................................                3,000,000                3,168,876
Hub zones (Not reuqired)......................................                      N/R                      N/R
Credit card purchases.........................................                  500,000                  550,000
----------------------------------------------------------------------------------------------------------------
\1\ A direct result of our continued outreach capabilities.
\2\ Due to better tracking.

    Mr. Witt. Since I have been director of FEMA, we have had 
five regional directors that are women. We currently have three 
regional directors that are women. One is an African-American 
in New York, doing a fantastic job. We also have females, 
including African-American females, at the SES level who are 
doing a great job. Sometimes it is very difficult when you are 
dealing with the federal civil service process for promoting 
and hiring, but I think we have made some good strides.
    Mrs. Meek. I think, Mr. Chairman, that these communities 
are drastically changing. When I came to the Congress my 
constituency is now made up of 20 percent Hispanic. It was not 
that way when I came in. It is now. Even more so, African-
Americans.
    So I just want to be sure that the agency, that you are 
aware of these changes. The world is different now.
    Mr. Witt. Well, Kay Goss is Associate Director for 
Preparedness, Training and Exercises. Carrye Brown is the U.S. 
Fire Administrator. Joann Howard is the Federal Insurance 
Administrator.
    So about half of my associate director team is female. My 
Chief of Staff, a career FEMA employee, is a woman. Pat 
English, who competed and was chosen as our Senior Procurement 
Executive, an SES position, is an African-American woman.

                    protecting research institutions

    Mrs. Meek. Thank you. One last question. You mention your 
national mitigation strategy. You are riding a lot of things on 
that, it appears to me.
    Just how much research institutions, higher education 
research institutions do you have involved in that and how can 
research institutions apply for the mitigation strategy or the 
grants that you have?
    Mr. Armstrong. Well, we give grants to different 
institutions but we also have a new disaster-resistant 
universities initiative, where we will target college campuses 
in high risk areas in order to protect the scientific research 
that can impact our economic future.
    In 2000, we will be piloting this concept of creating 
disaster-resistant universities by working with the University 
of California at Berkeley to determine how we might apply pre-
disaster mitigation to college campuses.
    We also give research grants in the area of earthquakes. As 
I mentioned earlier in response to Congresswoman Northup's 
question, we work with groups such as Texas Tech University to 
fund the tornado safe room and wind technology. We provide a 
variety of smaller grants where we partner with various 
research organizations, including the Natural Hazard Center at 
the University of Colorado at Boulder.
    We look upon the academic community as a definite partner 
with us. We also are piloting research in the area of mapping 
as part of our modernization program. In many of our 118 
Project Impact communities, colleges, junior colleges or 
universities offer technical support, public information 
capabilities and research that can help the communities become 
more disaster-resistant.
    Mrs. Meek. Thank you.
    Mr. Witt. Let me add something more about the request for 
$1 million to study disaster-resistant universities.
    The federal government invests $15 billion a year in 
federal research dollars in universities around the country. 
When I was in California at Berkeley, many of the university 
chancellors have asked me if there is a university that is 
doing Federal research on their risks, not only in California 
but also in New York, and Florida.
    This million dollars will help through a public/private 
partnership similar to Project Impact, target those high-risk 
universities that are doing federal research. If we lose one 
university that is doing federal research, not only do we lose 
the capability to educate future leaders in science, 
technology, and medicine, but we lose an economic base in that 
community, the state, and the nation.
    In the NorthRidge earthquake for example, we spent a 
billion dollars to rebuild universities that were destroyed by 
that earthquake. If we had spent even half or a third of that 
toward prevention before that happened, it would have made a 
difference.
    Mrs. Meek. One last comment.
    Mr. Walsh. We have three more----
    Mrs. Meek. I will just take one little sentence.
    Mr. Walsh [contining]. Questioners and each one should have 
five minutes and you and I split 15.
    Mrs. Meek. Oh, we did? Mr. Chairman, you were keeping a 
clock on me?
    Mr. Walsh. Well, unless one of these fellows would like to 
yield you time----
    Mr. Hobson. I will yield.
    Mrs. Meek. Thank you very much.
    You almost made me forget the question.
    My question has to do with the fact that I have nothing 
against Berkeley or any of those universities but in my 
experience here in the Congress, any time research and higher 
education is mentioned, it is always some of the big 
universities that have always received research money. I have 
to hurry because my time is going.
    We have other universities in other parts of the country 
that could do equally as well and I wish you could focus, 
particularly in the South. If you look at the stream of 
research in institutions, you do not find much of it in the 
South. And I just wanted to put that point in, Mr. Chairman, to 
be sure to look at some others, so it will not just be regional 
in the West.
    Mr. Witt. Well, let me answer that very briefly. We work 
with Florida universities, Texas universities and several 
others.
    Mr. Hobson. In Ohio?
    Mr. Witt. Ohio, yes, sir. There is no focussed 
concentration on any part of the country, rather they are the 
universities that have the expertise in working with what we 
are doing.
    Mrs. Meek. Look at the research. Look at the science. You 
see where your grants are going.
    Mr. Walsh. We will have the National Science Foundation on 
Thursday and you can make that case again.
    Mrs. Meek. Good. I sure will.
    Mr. Walsh. Mr. Knollenberg.

                       snow emergency in michigan

    Mr. Knollenberg. Mr. Chairman, I will be very brief.
    One quick question I do have. I know the president declared 
Michigan an emergency regarding the snow that fell basically in 
January and I was just in a house last night that was suffering 
from snow, so I suspect it is winding down.
    If this would take too much time, you can respond to this 
in writing as to what the status is relative to the Michigan 
emergency and the snow problem. I suspect it would be easier 
and simpler now to have you do it in writing.
    Mr. Witt. Sure.

                  cost sharing for consolidated grant

    Mr. Knollenberg. I would like to have that.
    The other thing, I just want to come back to the SLA, the 
matter that I think the chairman brought up. That is the state 
and local assistance, of course. I know that for the 1999 
budget, the introduction was made to begin to phase in the 
change.
    I wanted to direct this question to you on the basis of 
whether this is potentially an unfunded mandate to the states. 
While you have increased the budget, I think by about 4 or 5 
percent, on the fed side, the states have an obligation that 
rises to about 30 percent or so by virtue of now they have to 
match dollars. And I think the 100 percent program is gone. It 
is now 50 percent?
    If there is a quick answer, aside from the budget caps, I 
know that is a part of it.
    Mr. Johnson. Congressman, the cost share for the 
consolidated grant will essentially be a composite cost share 
that relates back to the fundingstreams coming into the 
program. Some of the money is 100 percent. Some of it is 80/20. Some of 
it is 50/50 federal.
    If we had used a composite cost share this year for fiscal 
year 1999 with the same funding streams going into the EMPG, it 
would have been 59 percent federal, 41 percent state.
    For fiscal year 2000, the federal share drops somewhat from 
59 percent to 55 percent, with the state share going up 41 
percent to 45 percent.
    Now there are, of course, depending on the state and the 
funding streams and allocations they get, there are highs and 
lows in that.
    We have worked through this issue with our state 
counterparts. Pat English, my Senior Procurement Executive, has 
convened a task force with our state partners to make sure that 
we are not going to put them in difficult situations with this 
cost sharing.
    Mr. Witt. We have worked this very closely with the states 
and the governors.
    Mr. Knollenberg. Have you been talking to the governors? I 
know it has been raised in our case, so we are aware of that.
    Mr. Witt. Yes, sir. I have talked to the governors. I 
visited with them when they were here at the NGA conference. 
They have become my best buddies.
    Mr. Knollenberg. Who are you supporting for president?
    Thank you very much. If there is anything to add to that, 
we will get that to you in writing for your response. Thank 
you.
    Mr. Walsh. Thank you, Mr. Knollenberg.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    Mr. Hobson was getting apprehensive since I was writing 
down a few questions. He was looking over my shoulder. I have a 
number of questions which I would like to submit for the 
record. Thank you.
    Mr. Walsh. Thank you very much.
    Mr. Hobson. Patience is rewarded.
    Mr. Hobson. If I run out of time I will ask Carrie to 
yield.
    Mr. Walsh. She is all out.

                upgrades to emergency response equipment

    Mr. Hobson. Mr. Director, in the past I worked with Jerry 
Lewis, the former chairman, and I worked to update FEMA's 
emergency response equipment and vehicles. Last year we helped 
direct an additional $824,000 to continue to upgrade the mobile 
emergency response system. I see that this year's request 
includes a $4.2 million increase.
    Can you give me some examples of the upgrades accomplished 
with the additional money restored last year? And secondly, is 
there a specific type of upgrade to the emergency response 
equipment which will be targeted by the $4.2 million increase?
    Mr. Witt. Briefly, I will begin and then Gary or Lacy might 
want to share with you what they are doing and what they have 
already done. Our vehicles are 15 years old, so we really 
appreciate your support and Congressman Lewis's support in 
helping us to upgrade them. Frank Cushing, has also worked with 
us in addressing this requirement.
    We have done a lot already to upgrade the equipment. The 
MERS capability is important to the states and local 
governments, especially in catastrophic disasters.
    Lacy or Gary, do you want to respond?
    Mr. Johnson. The 1999 increase of $824,000, Mr. Hobson, 
will allow us to replace some of the field operation shelters, 
begin to replace organic power-generating and power-switching 
equipment, begin to replace heating, ventilation and air 
conditioning systems, and complete replacement of the water 
purification system with our portable water tankers.
    The 2000 budget request maintains the $824,000 increase and 
requests an additional $4.2 million. So we have a total of $5 
million in the budget for 2000.
    With the 2000 request we expect to fund systems 
integration, accomplish all upgrades of existing equipment, 
continue to replace power generation equipment, complete the 
replacement of the obsolete heating, ventilation and air 
conditioning systems, complete replacement of 15-year-old 
vehicles, transport vehicles, and upgrade the EMERS matched 
video broadcast systems.
    Mr. Witt. When there is a catastrophic disaster like the 
one in Alabama with tornados or Hurricane Andrew or any flood 
disaster, these MERS units go in and support that local 
government. They can put up 150 phone lines immediately, 
providing the capability for emergency response.
    The governors have used the MERS many times to help heat 
and cool shelters for victims. There are many good uses of this 
system.
    Mr. Suiter. The report directed by the Congress last year 
is nearly done. It will be coming to you soon.
    I might add, it is the Congressman's persistence that has 
made certain that we have been able to upgrade. Otherwise we 
would be driving around in 25-year-old trucks.
    Mr. Witt. That is true. We appreciate that.
    Thank you, Mr. Chairman.

                                closing

    Mr. Walsh. Thank you. Well, that was great. Everybody got a 
couple of shots and your responses were great. I think 
everybody very much appreciates what your agency does and the 
difficulty that you have in implementing your mission.
    And let me just say thank you on behalf of the committee, 
the subcommittee members. Certainly on behalf of all of my 
constituents you and all the people--and I know you are out 
there but the people that are out there on the ground every 
day, in the mud, in the cold, seeing the hurt on those people's 
faces and helping them put their lives back together again, it 
is very much appreciated what you do.
    Mr. Witt. Thank you, Mr. Chairman.
    Mr. Walsh. The hearing is concluded.


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                                          Thursday, March 25, 1999.

                    CORPORATION FOR NATIONAL SERVICE

                               WITNESSES

HARRIS WOFFORD, CHIEF EXECUTIVE OFFICER
WENDY ZENKER, CHIEF OPERATING OFFICER
    Mr. Walsh. The subcommittee will come to order. Good 
morning, everyone.
    This morning we would like to welcome Senator Wofford back 
before the subcommittee--he is the chief executive officer of 
the Corporation for National and Community Service--for a 
hearing on the Corporation's budget. The Corporation's total 
budget request for fiscal year 2000 is $848,032,000. Of that 
amount, $299,532,000 is under the jurisdiction of the Labor, 
Health and Human Services Subcommittee. This subcommittee has 
the responsibility for the remainder of the request. Three 
million is for the Office of Inspector General, $545,500,000 is 
for various trust and operating programs.
    The amount requested from this subcommittee represents a 
net increase of $110 million to the amount provided in the 
fiscal year 1999 appropriations.
    Senator Wofford, we will include your entire statement as 
part of the record. If you would like to provide us with a 
summary, we can then move on to our questions about your 
program and your budget request. But before you begin, I would 
like to ask Mr. Mollohan if he has any opening remarks that he 
would like to make.
    Mr. Mollohan. Thank you, Mr. Chairman.
    I would just like to welcome the Senator to the hearing 
this morning. Senator Rockefeller called me and asked that we 
give you special courtesy, which we certainly want to do, and 
we are glad to have you appear before us today.
    Thank you, Mr. Chairman.
    Mr. Walsh. Thank you. Senator Wofford?
    Mr. Wofford. Mr. Chairman, Congressman Mollohan, I had a 
little something to do with Jay Rockefeller getting into your 
world because, helping Sargent Shriver back at the beginning of 
the Peace Corps, reading about Jay Rockefeller's time in Japan 
in this wonderful article he wrote about his years there, I 
suggested we ought to get him into the Peace Corps. And Shriver 
called him, got him in, and it led to him being a VISTA 
volunteer, which is under the aegis of the other committee. So 
you can give me credit or blame for----
    Mr. Walsh. Oh, I give you credit----
    [Laughter.]
    Publicly and privately. He's done a wonderful job of public 
service----

                             Oral Statement

    Mr. Wofford. Well, he played a very valuable role in 
shaping the Peace Corps in the first years.
    Joining me at the table is Wendy Zenker, chief operating 
officer at the Corporation, and the key members of my team are 
right behind me.
    This opportunity to present the administration's budget 
request, discuss the success of national service, and report to 
you on our efforts to improve financial management is an 
opportunity we appreciate.
    My written statement contains extensive information about 
the accomplishments of national service and the extraordinary 
success of this remarkably decentralized system that was 
designed by Congress and the President to assist communities 
and the civic sector to meet the pressing needs of this Nation. 
And that includes the achievements, now, of more than 100,000 
AmeriCorps members who have served over the last four years or 
who are currently serving and of more than one million students 
that are engaged in community service and service learning 
programs assisted by the Corporation's Learn and Serve America 
Program.
    But in this oral summary, I think you might appreciate if I 
focus primarily on the improvements in financial management 
that we are making to ensure that the Corporation is the high-
performing organization that we all want it to be.
    During my statement, I am going to refer to some charts. 
Copies of them were attached to my written statement. But in 
one key case we received updated information that is reflected 
in the charts that we are distributing to you right now.
    Our top priority, Mr. Chairman, is achieving an unqualified 
clean opinion on the audit of a full set of our financial 
statements, and we have made real progress toward that. After 
submitting my written testimony, Wendy Zenker and I were 
briefed on Tuesday by the inspector general and the auditors 
that she engaged, KPMG, on the results of the fiscal year 1998 
statements audit. The inspector general expects to issue the 
opinion within the next three weeks. We expect, from that 
briefing, to show that the Corporation is making continued 
progress, but still has important work to do.
    As the first chart indicates, we have gone from fiscal year 
1996 financial statements that were not auditable to a 
qualified opinion on our fiscal year 1997 Statement of 
Financial Position, to an unqualified opinion on our fiscal 
year 1998 Statement of Financial Position, our balance sheet 
account, which will give us a base from which to proceed for 
the 1999 audit.
    However, the two additional fiscal year 1998 statements 
that were audited for the first time this year, those the 
inspector general is going to disclaim.
    We know that we have financial management material 
weaknesses still to correct, and we are working diligently to 
do so. Last fall, Congress provided additional resources to 
speed our progress on essential financial management 
improvements, and we submitted a detailed action plan to make 
those improvements. The plan calls for improvements in nine 
areas. It includes 177 specific tasks. To date, we 
havecompleted 69 of them. Much progress has been made, though not 
enough to satisfy you or me. Much remains to be done, but let me tell 
you what we are doing in three key areas, shown on the second chart.
    Since last year, all of our mission-critical systems, 
except for financial management, have been made Year 2000 
compliant, and most of our hardware is now compliant. We are 
confident that we will be prepared for the Year 2000.
    Many of our problems stem from weaknesses in our core 
accounting system, which goes back for many, many years to the 
ACTION Agency, which was folded into ours and taken over by the 
new Corporation. We have selected now a new financial 
management system, state-of-the-art, known as Momentum, and 
implementation is underway. That system will be fully 
operational this year, and it will be Year 2000 compliant.
    To ensure the accuracy of the data in the National Service 
Trust, we are right now installing state-of-the-art imaging 
technology, and we are pilot-testing a Web-based reporting 
system which should be very important, and the tests so far 
look very good. By next year, they will both be fully 
operational.
    In our next report--every 60 days we report to Congress on 
our progress in these matters--in our next report, due the 
middle of April, you will continue to see progress on the 
Action Plan, and we will be able to report to you the final 
results of the audit and the adjustments to the Action Plan 
made to deal with additional points that this in-depth audit is 
bringing to our attention.
    As we grapple with these critical questions, Mr. Chairman, 
let us not lose sight of the success and impact of national 
service. We recently released an independent study reflected on 
the next chart that documents how AmeriCorps is strengthening 
local organizations and communities and having a positive 
impact on the lives of AmeriCorps members.
    I hope you will read the summary of this report, which we 
are providing today for the record. We do not have the full 
report, but this is a very ample summary, and the full report 
will be coming in the next month.
    [The summary follows:]


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    As the final chart shows, recent studies have also 
documented that service learning programs of student service by 
students from elementary and secondary schools and from 
colleges and universities are benefitting communities, while 
instilling a sense of civic responsibility and raising the 
academic performance of participating students. So our work 
around the country is going well, and there is nothing that 
gives me greater delight, at this stage of my life, than to 
visit those programs around the country.
    AmeriCorps and Learn and Serve America are having the 
impact on communities and participants that Congress intended. 
This success is the reason for the growing bipartisan support 
not only in Congress, but also in the States, cities, schools 
and neighborhoods. That support is nonpartisan support because 
ordinary Americans, through AmeriCorps and student service, are 
making an extraordinary difference every day.
    Mr. Chairman, I look forward to working with you in your 
new assignment, and Congressman Mollohan, and the entire 
subcommittee to extend the reach of National Service and 
enhance its contribution to American communities.
    Thank you.
    [The statement of Harris Wofford follows:]


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                   management of AmeriCorps Programs

    Mr. Walsh. Thank you for that summary. I have some very 
specific questions that I would like to ask, but I would like 
to ask a general one first, and we talked a little bit about it 
before we sat down.
    Two of my counties, Cayuga County, which is a smaller 
county, and Onondaga County, which is a much larger county--it 
is the home of Syracuse, which is obviously more urban--had two 
very different experiences with AmeriCorps. And I think what it 
comes down to, really, is management. One has a very activist, 
engaged, ``can do'' sort of person who is utilizing the 
volunteers for a number of different areas of endeavor. A lot 
of it is environmental work. Whereas, in the Syracuse program, 
we had a very well-meaning individual who was a poor manager, 
and I think a lot of the volunteers wondered what they were 
doing.
    So how do you deal with that? This program is so diverse, 
and you are involved in so many different things. How do you, 
as the overall overseer, if you will, of the program, how do 
you divide labor and how do you keep an eye on the management 
of the individual programs around the country?
    Mr. Wofford. Well, first, for the very reasons you just 
stated, we must recognize that the program is very diverse and 
decentralized. This program operates through 600 local 
nonprofits, educational, college, other nonprofits and service 
organizations in AmeriCorps, and if you add AmeriCorps VISTA, 
another thousand local nonprofits. The service learning 
programs are also grants to educational agencies and, in many 
cases, they are through formula grants through State 
Departments of Education that then gives subgrants out.
    We are a vast, unusual R&D effort--research and development 
effort--to find out what works and what does not work; to tap 
the idealism of young people, not just young people, because it 
is all ages, but mostly young people, and to harness it in 
effective programs.
    So the decentralization that Congress structured in the 
very central core of this agency is of two kinds; one, that 
two-thirds of the grants AmeriCorps makes goes through State 
commissions appointed by governors, bipartisan State 
commissions who make subgrants. I am guessing, I believe, both 
of the programs you are referring to are State grants. I think 
that is from the State commission, and the head of AmeriCorps 
confirms that.
    The second way we are decentralized is that many programs 
are run by national nonprofits, like Habitat for Humanity or 
the Red Cross. Approximately one-third of AmeriCorps State and 
National funds goes by competitive grants to national 
nonprofits who then organize it through their local units in 
different parts of the country. And that structure, which 
Congress created, puts a tremendous challenge on the State 
commissions to monitor and evaluate. They need to decide 
whether to renew a program; they take the initial action as to 
whether to terminate a program.
    But we sense a big responsibility on our part, and that is 
why, for one thing, the Department of Evaluation and Effective 
Practices, which Bill Bentley, who you met earlier, heads, and 
we have invested a lot of new support in, plays a crucial role 
in getting national evaluations. Not only the kind of studies 
that we have just presented to you today, but the ability to 
go, with our program staff, and look at troubled programs or 
look at great success programs and figure out how to spread 
them.

                    political involvement prohibited

    Mr. Walsh. Obviously, this program does a terrific job of 
harnessing that idealism that the Peace Corps utilized and 
VISTA utilized. The whole intent, as I perceive it, is to 
benefit the country, but strongly benefit the individual, 
helping them to grow and mature and utilize that idealism and 
altruism in positive ways. So if they are not gainfully 
employed or if they understand the people that are directing 
them are poorly equipped, that is a bad thing.
    The other thing is, and maybe you can address this, one of 
the things that when we went into the Peace Corps they strongly 
advised, although they didn't beat us about the head and 
shoulders on it, but to stay out of politics, to stay out of 
local Government activity, to not advocate for social issues, 
even though you may feel very strongly about them.
    How do you deal with that in AmeriCorps?
    Mr. Wofford. We have, in AmeriCorps, as strong a 
prohibition, and an admonition, and an effort to make sure that 
every AmeriCorps member and every subgrantee recognizes that 
there are prohibited activities which parallel, basically, what 
the Peace Corps' prohibitions would be. And where there have 
been very rare cases that someone has gone across the line, 
either a member inadvertently not knowing or remembering this 
or a grantee being tempted to use AmeriCorps members for 
advocacy or for political activities, we have taken very strong 
action. These have been very rare incidents. And in the several 
cases that existed over four years, the action taken has been a 
signal that I think is recognized on the political front.
    Secondly, everyone that has had anything to do with me, as 
I go around the country or in messages, knows that there is 
nothing that I have been more dedicated to than claiming not 
only the bipartisan support, which the 1990 act reflected and 
the 1993 National Service Act reflected, but basing everything 
we do on the nonprofit, nonpartisan sector.
    On your first point, the comparison with the Peace Corps is 
instructive. In one way, we are very similar and another way we 
are quite different. We are similar in that AmeriCorps is 
trying to be a domestic Peace Corps that draws on all of the 
best that we know in the Peace Corps. But in another way, it 
becomes a central part of our challenge, because we are very 
unlike the Peace Corps, which selects members; trains them; 
flies them overseas; deploys them; administers them; terminates 
them; is responsible for them. We do not select the members of 
AmeriCorps, with one exception: the National Civilian Community 
Corps, which was organized under the Bush administration, which 
we run. There are a little under a thousand participants. We 
are asking for more support for it today. But of our 40,000 
members probably serving right now, going up to probably 45,000 
before long this year, only 1,000 are our responsibility that 
way. All of these other 39,000 members are selected by the 
local nonprofits.
    And so we are a test of devolution, decentralization and 
how you get effective monitoring, evaluation and action when 
things do not work and how you find the really important things 
that work and ought to go on everywhere. I have a list of the 
things that I know do not work, and I have another list of the 
pilots that we have had in operation, that State commissions 
have invested in or our national nonprofits, which so clearly 
work that if they did what a pilot on a furnace does, which is 
to ignite the whole, if we brought them to bigger scale, we 
could really multiply the contributions we are making to 
solving America's problems.

                         national service trust

    Mr. Walsh. The National Service Trust Fund provides for 
educational awards to those who complete terms of service, as 
well as pay interest on student loans. So the members who begin 
service, what percentage are successful in completing their 
terms and what is the cap on the payments to these members?
    Mr. Wofford. The educational award is a set formula. For 
full-time service for a year, it is $4,725. For half-time 
service, it is approximately half of that. In some cases, there 
is an intense, full-time summer program whre members get an 
educational award of about $1,000. But most, the majority, are 
full-time service, and those are the awards.
    The living expense of an AmeriCorps member, under the 
statute, is capped at $15,000. But our contribution to it is 
approximately 85 percent of the VISTA poverty level, which is 
now about $8,600. And we pay 85 percent of that, or about 
$7,420. The local organization has to pay the other 15 percent, 
but it may pay more. Very, very few have gone up to anything 
like $15,000, and most, the overwhelming majority of them, stay 
at the standard, now $8,600, of which we pay about $7,420..
    Mr. Walsh. Percent completing the----
    Mr. Wofford. Percent completing, taking into account 
program and personal issues, is just over 80 percent. We try to 
keep track of it carefully. It has varied a little year-by-
year. As the reports are coming in, I think the current figures 
are something like 16 percent who come in do not complete the 
service, or have a shorter term of service.
    I do want to quickly make a qualification on that. With, 
let us say Teach for America or the Alliance for Catholic 
Education that supplies teachers to schools, participants make 
a commitment. In the case of Notre Dame's Alliance for Catholic 
Education, it is a commitment to teach two years in schools 
serving minority and poor populations in the South. They have 
five applicants for every one spot, both from Notre Dame and 
from around the country, and they view it as a real--for a 
teacher not to complete even the two years, but not to complete 
the first year in a program like that is a loss, is a failure. 
They only had one person leave in the first year of the 
program, and he became a priest.
    Mr. Walsh. So we did not really lose him. [Laughter.]
    Mr. Wofford. The other side of the spectrum, you have a 
wonderful program, Youthbuild, that Congress supports 
separately through HUD. And Youthbuild was in existence before 
AmeriCorps. It became part of AmeriCorps. Congress indicated in 
the act that it was one of the models we should find, and that 
is for disadvantaged young people who almost entirely have 
dropped out of high school, to put them in a disciplined, 
challenging, hard-work situation, where they build homes for 
low-income people, either with Habitat or separately. And a 
major part of that program has always been to give building 
skills so that young people who are heading to disaster, who 
come into that program, will turn their lives around and get a 
job. So they do not view it as a failure if, after seven months 
or six months, a young person gets a job and leaves the 
program.
    Mr. Walsh. View it, oh, I see. Okay.
    Mr. Wofford. That is the spectrum.
    Mr. Walsh. They are using those skills and they are moving 
on.
    Mr. Wofford. So, in some cases, the failure to complete the 
full year, by the programs anyway, is not viewed as a failure.

                        current trust liability

    Mr. Walsh. The current liability of the National Trust Fund 
is what and what are the assets of the Fund?
    Mr. Wofford. The precise figures--I was about to give you 
the answer in principle, but my chief operating officer would 
probably do better at giving you a----
    Mr. Walsh. Test those financial records.
    Ms. Zenker. You have actually caught us right there on a 
question that I cannot readily put my fingers on right now. Of 
all of the things I brought with me, I had not brought our 
financial statements with me, and I apologize for that.
    Mr. Wofford. And we are very proud of them, too.
    Ms. Zenker. I know. The notebook was getting too thick. I 
am sorry. We certainly can provide them for the record, and I 
know that you may have some questions regarding those 
liabilities and assets.
    [The information follows:]
                         National Service Trust
    The assets of the National Service Trust, as of September 30, 1998 
and recorded in the FY 1998 financial statement were approximately $358 
million. The estimated net liability of the Fund as included in the FY 
1998 financial statements, was $161 million. The fact sheet below 
explains in some detail the issues surrounding the estimated liability, 
which depend on one's assumptions about future use of earned education 
awards, as well as the assumptions made in estimating the fiscal year 
2000 budget requirements. The Corporation's budget estimates consider 
that not all members will earn and/or use awards, as well as the need 
for a prudent reserve until greater program experience can be gained.

    Mr. Walsh. Can you give us a general state of affairs with 
the Trust Fund?
    Ms. Zenker. Yes, I can. I know that there are some numbers 
that are floating around from previous testimony in front of 
the Senate VA-HUD Committee that spoke to whether or not there 
was a surplus in the Fund.
    At this point in time, we do not believe that there is a 
surplus in the Fund. We do have what we consider to be a modest 
reserve. Our intention is to make sure that we have enough 
money in the Fund to cover the education award needs of 
everyone who has completed a term of service in AmeriCorps. And 
that means that we hold in trust these monies for people who 
complete their term of service.
    We have sufficient funds in the trust right now to cover 
those needs of students who are going to complete their terms 
of service with a slight reserve. The reserve is built around a 
question as to whether or not everyone who completes a term of 
service will, indeed, use their education award.
    You asked earlier a question about attrition; how many 
people drop out, and we do have between 15 or 20 percent of a 
dropout rate. But, in turn, we also have people who complete a 
term of service are entitled to an education award and have up 
to seven years to use that education award. And the question 
becomes, how many of those people actually use their full 
education award and how many do not. And that is where a 
question has come about in terms of whether or not there is a 
reserve in the Trust to cover that question of: is it going to 
be 100 percent of the people who finish service who will use 
their award, or will it be less than that?
    Mr. Walsh. That is a fair answer.
    Mr. Wofford. We would like to provide you information and 
also work with your staff to explain the approach to this 
matter of what the prudent reserve is and the estimate for the 
liability.
    [The information follows:]


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                proposed increase in americorps members

    Mr. Walsh. Good. One last question, and then we will go to 
Alan. The fiscal year 2000 budget request is expected to 
support I believe it is 59,600 members with AmeriCorps grants. 
Your budget justification material indicates the goal is to 
have 100,000 members by the Year 2000, though I believe you 
just said you had 40,000, soon to be 45--. Yes, 100,000 would 
be the Year 2002. Is that accurate?
    Ms. Zenker. I believe that we expect to support about 
69,000 in our Year 2000 budget.
    Mr. Wofford. Which includes the VISTA 6,000.
    Ms. Zenker. So our overall----
    Mr. Wofford. The grant numbers may be just what you said. I 
have them here. All together, if you add VISTA and the National 
Civilian Community Corps to the AmeriCorps grants, we are 
seeking funds to support 69,000 AmeriCorps members. The 
numbers, with this committee, we would have----
    Mr. Walsh. What I am getting at is what would be the 
amounts of grants funding required to support that goal?
    Mr. Wofford. In the subsequent years? The goal for this 
year?
    Mr. Walsh. Starting with 2000.
    Ms. Zenker. Our estimate for grant funds, I believe, is 
$302--.
    Mr. Wofford. For fiscal year 2000, to achieve that goal 
of----
    Mr. Walsh. $302 million.
    Mr. Wofford. $302 million, of course.
    Mr. Walsh. So if to support 69,000, you need $302 million, 
how much would you need in the Year 2002 to support 100,000?
    Mr. Wofford. I do need to qualify that. The funds requested 
of the other committee for VISTA are covering some 6,000 
VISTAs.
    Mr. Walsh. Right, I understood that.
    Mr. Wofford. So it is 69,000 minus that 6,000.
    Ms. Zenker. We would require a total of $435 million in 
grant funds and $139 million in the Trust to support the full 
100,000 members in the Year 2002.
    Mr. Wofford. Mr. Chairman, there is one very important 
variable in this. In our agreement with Senator Grassley, who 
learned about a pilot program we had of only giving education 
awards and not giving program support or costs for the living 
allowances, and being enthusiastic about it, as I was, we 
agreed to move that model up to a large scale.
    And now we have about 15,000 AmeriCorps members in that 
model getting little else than the education award, and that 
brings the costs per member very significantly down.
    And how far that will expand depends on the major national 
nonprofits, or some local ones, rising to the occasion and 
providing those other funds. And I would like to see that model 
grow even further than it has if we get that kind of leadership 
from the nonprofit sector.
    At the President's summit in Philadelphia, as he did at the 
prayer breakfast, President Clinton called on the nonprofit, 
faith-based and educational organizations to provide support 
for 50,000 AmeriCorps members in that category. He did not 
specify any year. But if we increase that proportion, the 
amounts, in future years, needed to reach the 100,000 goal will 
be less.
    Mr. Walsh. Well, I will leave it there for now, and then we 
will come back.
    Mr. Mollohan.
    Mr. Mollohan. Thank you, Mr. Chairman.
    I think it is very positive to talk about increases in the 
program. I just want to ask you about the consequences of the 
flip side scenario. The Budget Committee is considering a 
budget resolution which is very severe. Also, proposed 
increases in some programs, including education and lots of 
others, will take funds out of the discretionary programs that 
are funded now, and move them over to education, for example.
    We may be looking at a budget resolution that does not 
allow us to raise the caps and increase spending in other 
discretionary areas. It is not a prospect anybody would want to 
look at, I am sure certainly not, but you could be looking at a 
decreased appropriation.
    I am just wondering if you could lay out for the record 
what would be the consequences, because of the budgetary 
environment we are operating in, of a 10 percent decrease in 
your budget request?
    Mr. Wofford. Well, you would have to add, some 1,000 
nonprofit organizations, using Americorps grant money and in 
the other committee, using the VISTA money. The decrease would 
mean that one, you would be very unlikely that any new national 
or local nonprofits would be able to draw on this resource.
    And it would be probable that Habitat for Humanity and the 
Red Cross and a whole range of the organizations would get a 
decrease at a time when practically every one of them has 
discovered that this resource of full-time service by young 
people is a crucial addition to the way they galvanize 
volunteers and strengthen the civic sector.
    So, I think it would be important to weigh reducing what is 
proving to be a tremendous leverage for volunteers just at the 
time when so many people on both sides of the aisle want to see 
faith-based organizations and the civic sector strengthened and 
carrying more of the burden of solving our problems in society. 
This is the one resource that is sort of, in my opinion, the 
right way for the Federal Government to operate. We are the 
junior partners but provide a resource that those organizations 
badly want.
    So, I think you would hear from--we are not in the business 
of organizing lobbying and not supposed to be--but you, I 
think, would hear from a lot of those, some 1,000, 
organizations around the country that are benefitting by this 
program.

                        eligibility requirements

    Mr. Mollohan. Well, what are the eligibility requirements 
for volunteers to participate in these programs?
    Mr. Wofford. Generally, one must be above 18 with the 
exception that the National Civilian Community Corps can be 17 
or for Youth Build or programs for high school dropouts that 
have left school and they have to get their GED and work on it 
while they are in AmeriCorps. There are less than 10 percent in 
that category. But it is 18 on up in most cases.
    The proportion over, 30 or 25, Bill, roughly, of AmeriCorps 
members that are of older age is 25 percent?
    Mr. Bentley. Over 30 is about 25 percent.
    Mr. Wofford. Twenty-five percent are over 30. But three-
quarters are young people 18-to-25. There are three divisions. 
We can give you the precise estimates from our studies but it 
is something like a third of college graduates, a third have 
had some college and a third are pre-college.
    [The information follows:]
                  AmeriCorps Demographics Information
    The attached gives detailed information about AmeriCorps members.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Mollohan. Is that the volunteer community?
    Mr. Wofford. That is the AmeriCorps members. In service 
learning, which is a tremendously successful program, the 
average of the money that you give to the Learn and Serve 
America program is just over $35 or so per student to assist 
programs that are engaging more than a million students in 
service in the community.
    That is a tremendously cost-effective program. We need 
young people to begin to see themselves as resources and 
leaders, and we need to see them as that and not just as people 
to serve. We need to ask them to serve. You know, there are 60 
million students in this country, and the service learning 
program, in collaboration with colleges and universities and 
citizen organizations, is finding a way to tap that power of 
young people.
    In some cases, there are wonderful first grade programs in 
which children learn to serve in their school or in their 
community. There are extraordinary programs in which older 
young people tutor second graders--that is 11th and 12th 
graders in a structured program tutor second graders, three 
afternoons a week in an elementary school.
    The literacy programs say the power of older young people 
to teach, mentor, tutor, and lead young people is enormous. It 
takes very little money. It took some initiative from the 
teachers and the skill to teach them to be tutors. I saw it 
grow over 8 years in 22 Philadelphia schools. That particular 
program is now in 7 States. But all around the country that 
idea is spreading and service learning is a catalyst for 
programs like that.

                  literacy programs in washington, dc

    Mr. Mollohan. Is that literacy program in existence in the 
Washington area?
    Mr. Wofford. In the Washington area, indeed, it is. In the 
Washington, D.C. area?
    Mr. Mollohan. Yes.
    Mr. Wofford. Yes. I would like to submit for the record the 
summary of the work that is being done in the Washington, D.C., 
area. VISTA members in the District of Columbia, through an 
organization working in the public schools, has asked for a 
VISTA for every high school in the District of Columbia to be 
the organizer of student service, the coordinator. And they are 
at work. They have made a big difference in the District's 
requirement that there be 100 hours of service in order to 
graduate. But it had not been organized, and the full potential 
of that needed service learning coordinator had not been 
realized, and we have provided them to all the District 
schools.
    Secondly, there are 30-some AmeriCorps members who, through 
another organization, Communities in Schools, working through 
the elementary schools, are playing a leading part in the D.C. 
literacy effort. We also are helping to organize the work study 
students of quite a few hundred college and university students 
in the District of Columbia. We have helped them engage in the 
literacy programs of the District of Columbia.
    It is a fuller story that we would like to put in the 
record for you in a few days.
    Mr. Mollohan. Thank you.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            call to service

    Mr. Mollohan. In your statement, you spoke about the Call 
to Service effort. Describe that for us and why is it 
necessary? Are you having trouble getting recruits?
    Mr. Wofford. Well, yes and no. A program such as the 
Alliance For Catholic Education, which I described, has its 
built-in recruitment system right at Notre Dame University and 
it reaches out to other colleges and universities. And as I 
said, it had 5 applicants for every position.
    Our National Civilian Community Corps had 3,000, a great 
part of them outstanding applicants, for this full year of 
service, for 900 positions. Habitat For Humanity, because of 
its national reputation, has a recruiting system for their now 
600 AmeriCorps members.
    But some of the smaller organizations need a national sense 
of AmeriCorps being good, being cool, being effective. And the 
very decentralization that is, I think, magic and right also is 
a problem because, you know, when your colleague, for example, 
Congressman Kasich went to collect information on one of the 
programs in his book, ``Courage Is Contagious'', at Harlem, the 
Harlem Reedlen Center, he was tremendously impressed with the 
program and it is in his book.
    And when he went to leave the program, the director of it 
told me he turned at the door and he said, ``Why in the world 
cannot AmeriCorps do something like this?'' And the director 
said, ``Oh, I forgot to tell you: All these 50 people that are 
on our team that are doing this in all these Harlem after-
school programs, they are all AmeriCorps members. That is how 
we do it.''
    And Congressman Kasich said he would like to sit down and 
talk to me. He was impressed with some of the people he met 
from AmeriCorps. And it is not just on the Republican side of 
the aisle. I have been with Democratic Senate colleagues in 
their States where AmeriCorps programs with local programs, 
they had no idea these were AmeriCorps members.
    And, so, we do need a Call To Service that says, this is 
AmeriCorps. It is 1,000 different projects but there is a thing 
called AmeriCorps and we are trying to recruit to help these 
local organizations recruit 50,000 people.
    So, we are taking it around the country. I have been to 
Mississippi, Utah, Maryland, and I am heading for a swing down 
the West Coast. And it is not just me. We are teaming up also 
with the Peace Corps.
    In many cases, it is a Call To Service for both the Peace 
Corps, which has the prospect of increasing to the goal of 
10,000, which Congress set some time ago. And it has gotten 
across the first hurdle for that.
    In any case, Mark Gearen, the head of the Peace Corps, and 
I are jointly in Boston in the next couple of weeks doing the 
Call To Service. And we may, in some cases, team up with the 
military to try to convey that coming of age in America you 
ought to consider a substantial period of service to your 
community at home or abroad. On the battlefields abroad, if 
necessary, or on the battlefields of hard social problems at 
home.

                              recruitment

    Mr. Mollohan. Just so I understand. A lot of your 
recruitment is done by the local organizations that are 
applying for the grants?
    Mr. Wofford. Yes, yes.
    Mr. Mollohan. That is just automatically built into it.
    Mr. Wofford. They get the positions and then they need to 
recruit.
    Mr. Mollohan. So, they do that?
    Mr. Wofford. Yes.
    Mr. Mollohan. On top of that, you have this Call To Service 
initiative?
    Mr. Wofford. Yes.
    Mr. Mollohan. It is a national one?
    Mr. Wofford. Yes.
    Mr. Mollohan. And if somebody responded to that in say, 
Spokane, they might end up in Oklahoma working or something, is 
that correct?
    Mr. Wofford. Yes. Well, they might. But not necessarily.
    Mr. Mollohan. I got a lot of no-shakes on that one.
    Mr. Wofford. Well, no. I do not want to overemphasize that. 
When any young person in West Virginia hears about AmeriCorps, 
whether they hear in the new public service ads that are right 
now being played widely or on the bulletin board at the college 
or by word of mouth, they may learn right away that they can go 
and apply to the local Habitat project or the rest. But if they 
call our 800 number they get the information on what the 
programs are and the majority of the information they get in on 
local programs.
    But in VISTA there is more of a tradition of being part of 
a national pool which can go--as Jay Rockefeller was an example 
of--which can go into other States. And I have been on Indian 
Reservations where people from outside came and stayed for 
years thereafter.
    Most of our service is by people from the community or 
certainly from the State. The great majority are not going from 
one State to another. But for some, in the National Civilian 
Community Corps, it is a tremendous experience for someone from 
the inner-city to work building trails for the NCCC in the High 
Sierras. They often perform service similar to the old CCC, or 
Civilian Conservation Corps, with assignments in National Parks 
and rebuilding CCC trails.
    Mr. Mollohan. This is great work you are doing.
    Thank you, Mr. Chairman.
    I would like to go to another hearing, and I want to 
apologize to the Senator for having to do that but I would like 
to cover another hearing.
    Mr. Walsh. We all have split loyalties these days with all 
the hearings. But, please, go ahead.
    Mr. Mollohan. Thank you, Mr. Chairman.
    Mr. Walsh. Mr. Price.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Walsh. Senator, glad to see you back here.
    Mr. Price. Thank you, Mr. Chairman.
    Mr. Walsh. Senator, glad to see you back here before the 
subcommittee.
    I think I may have said last year I do not know of any 
program in the Federal constellation that so effectively 
embodies those core values of opportunity, responsibility and 
community and I think National Service is an object lesson in 
those values, and gives our young people a chance to put these 
ideals into action and give something back to the community and 
I think we can all wish that that is a lesson that all of our 
citizens should learn.
    So, I thank you for what you are doing.
    I am very pleased at North Carolina's rate of participation 
in AmeriCorps. On a per capita basis it has dropped a little 
bit though. And I think we were at 530, we are now at 500. I do 
not know what the reason for that would be. It is still very 
good participation.
    But I look forward to working with you to get back up to 
that high point.
    Mr. Wofford. Well, if our funds go down, it can drop 
further. [Laughter.]

                        Learn and Serve America

    Mr. Price. I did notice that in your description of the 
Learn and Serve America program you targeted North Carolina, so 
to speak, in pointing out a Durham effort. Durham is newly in 
my district given the redrawing of the districts in North 
Carolina. And I represent Durham, where we have high school 
students who have worked with North Carolina Central University 
students in building handicap ramps for the elderly and 
interviewing these senior citizens and writing up their 
interviews. It sounds like a good project and, of course, there 
are many others that you describe here.
    Anything you would want to say about the Learn and Serve 
effort especially? Any update on that that we should know 
about?
    Mr. Wofford. Well, North Carolina is one of the States of 
an increasing number that have wonderful programs in service 
learning at the higher education and K-through-12 level. The 
idea of young people serving, not just being served, as part of 
their education, learning citizenship by doing it, is spreading 
very significantly.
    As you may recall, the whole State of Maryland led, in 
part, by Lt. Governor Kathleen Kennedy Townsend, has by 
legislation made service a requirement for graduation. And 
Marilyn Smith, who is head of our service learning department, 
comes from being the State Commission Director in Maryland.
    But California is about to adopt a program that does not 
require a certain number of hours, but will require steadily 
increasing over the next five years the integration of service 
into the curriculum at all levels. So, that a student in the 
California public school system, if their plan is fully 
operational, will at each level--elementary, middle school and 
senior high school--have very major experience in service in 
the community.
    We are finding that as this grows--the reform program of 
Superintendent Vallas in Chicago, the new program in 
Philadelphia, to take just two of them, there are a lot of 
examples--have used service learning as part of their way to 
turn those school systems around and get character and 
citizenship learned by engaging in problems. And we are trying 
to be of maximum help to this growing movement. And we do it in 
two main ways.
    One is to help support centers, usually academically-based 
centers of service learning, so that universities and centers 
of service learning can give technical assistance to schools 
that are interested in moving in this direction. And directly 
supplying through either VISTA or AmeriCorps projects, 
AmeriCorps members who have experience and are trained to be 
coordinators of service learning to help a school do it well.
    And we are developing a body of knowledge and an increasing 
cadre of people around the country who know how to do it. And 
we are supplying some of those to the school systems committed 
to it.
    Mr. Price. Good.
    Well, you stressed this morning the array of local groups 
that you work with and whose efforts you reinforce. In our 
State, Habitat for Humanity has been one valuable partner. You 
have assisted with disaster recovery. You have helped with 
daycare service. You helped provide tutorial services for 
adults in basic literacy skills and on and on.

                            Literacy Efforts

    Let me just ask you about that last item, though, the 
literacy work. We all know that one of the biggest problems in 
education today is that many students do not read at levels 
appropriate for their grades and many adults never learned to 
read well enough to function the way they would like in 
society.
    Could you give us an overview or perhaps furnish for the 
record, if you do not have it at your fingertips, an account of 
AmeriCorps's involvement in literacy activities for children 
and adults?
    Mr. Wofford. If I may, I'd like to do both--a quick tour of 
the horizon on it, and we would like to submit something for 
the record on it, because there are an increasing number of 
studies and reports showing the effectiveness of what we do, 
and we would like you to have the full scope of what we do. 
Before the President launched the America Reads challenge, 
there were many, many communities in States in this country 
that were already moving strongly in that direction.
    Places such as, Baltimore, Boston, and Texas, have done 
this. Governor Bush had declared reading by the end of grade 
three and then reading to learn as, he said, the prime goals of 
his administration in his state of the State address.
    But the President raised the challenge to all America to 
see that no one enters fourth grade, if we can possibly take 
the action necessary, who does not know how to read in order to 
go forward and read to learn. And it is something like 40 
percent of Americans that are not at adequate, independent 
reading level. And it differs from State-to-State and within 
States.
    VISTA has for many years before AmeriCorps came along, been 
engaged in supplying people with local literacy programs. The 
Corporation's board of directors resolved the first year I was 
here that a primary focus should be children and youth. And we 
have had four years of experience, long before the America 
Reads challenge came, experience in local literacy programs.
    Then the challenge came and there was great fanfare and 
controversy about the proposal for America Reads that this 
committee was interested in last year.
    In the end the bill got passed, the Reading Excellence Act, 
I think it is called, which supplies very substantial new funds 
to school districts and local literacy programs to enhance the 
work of the effort to achieve that goal of America Reads.
    We, meanwhile, before that bill passed, steadily increased 
our commitment to provide AmeriCorps members or assistance 
through service learning--the service learning programs of 
colleges and universities--to these literacy efforts. And we 
can tell you how many thousands of AmeriCorps members are 
engaged in that around the country and give you a survey of 
what we are doing.
    I think it is one of the most vital fields for the future 
of AmeriCorps and service learning. And I gave, as one of my 
favorite examples, that old and young people tutoring is 
tremendously potent. We have an aim of 100,000 college 
students, of the million college students that are in work 
study, being engaged in literacy programs.
    I just came back from Utah where nine months ago I saw how 
one AmeriCorps person stationed at the University of Utah had 
already recruited 36 work-study students and placed them in 
these local literacy programs which had AmeriCorps members as 
key parts of it. And I have just gotten an update when I was 
out there on how those programs are flourishing and it has 
spread to, I think, nine other colleges that are contributing 
student volunteers to this.
    And we are organizers and generators of those volunteers. 
And I think that the role of AmeriCorps and AmeriCorps VISTA in 
generating volunteers, which the Aguirre study showed, I think, 
estimates 12-to-1, one AmeriCorps member on the average 
generates 12 volunteers. And in VISTA, the estimate, since that 
is a major part of their function, is more like 30 volunteers 
for every VISTA. You need to realize that the measure of the 
cost is what we do to help solve these problems. And part of 
what we do to help solve the problems is use full-time 
AmeriCorps people to generate large numbers of unpaid, 
traditional volunteers and use them effectively.

                          Volunteer Leveraging

    Mr. Price. I know that is an outstanding feature of these 
literacy efforts, both the campus-based literacy programs and 
those involving local literacy councils. The multiplier effect 
is enormous in terms of the numbers of volunteer hours that are 
generated.
    And, so, if you do have more systematic data on that I 
think we would like to see that as well, the kind of estimate 
of what we are leveraging in terms of volunteer activity 
through the dollars we spend on that.
    [The information follows:]

                         Leveraging Volunteers

    The Corporation is now preparing to conduct a systematic 
study of the volunteers leveraged by AmeriCorps programs. Based 
on estimates from various data sources, we believe that the 
average AmeriCorps member leverages and 12 uncompensated 
citizen volunteers during a service year. Based on progress 
reports and accomplishments reports, almost all programs made 
an effort to leverage volunteers. We will be pleased to provide 
you with a copy of our study on volunteer leveraging when it is 
complete.

    Mr. Wofford. We will add that to the report. But one reason 
I was stressing how it works is that a year ago there was 
concern by some of your colleagues that, from what they had 
heard, they thought we were going to be organizing literacy 
programs that we ran and parachuted people in to run. And that 
was never anyone's intent.
    We provide, on a competitive basis, usually through the 
State Commissions, AmeriCorps members to the local literacy 
programs which those State Commissions think are the best in 
their State. You know, Barbara Bush's special launching of 
Houston Reads--which I helped her launch out there--was with 
the help of her foundation assembling all the best skills of 
the literacy programs in Houston. And that consortium of 
literacy programs badly wanted all the AmeriCorps members they 
could get to help them carry out their program.
    Mr. Price. Well, all I can say is that our experience in 
North Carolina--I have looked in on a lot of these programs--
has been that the AmeriCorps participation brings forth 
participation from the wider community and I think anybody who 
takes the trouble to look at these programs would conclude the 
same thing. That any kind of notion of some kind of takeover is 
just fanciful. That is not the way it works, not the way it has 
ever worked.
    Well, thank you, we appreciate your being here today.
    Mr. Wofford. Thank you, Congressman, and your political 
science background probably makes you like myself, wanting to 
figure out how we can crack the atom of civic power more 
effectively. And I think the formula that Congress set up in 
this system of National Service is one important way of how we 
crack that atom of citizen power and harness it effectively in 
combination with local nonprofits and civic organizations.
    Mr. Price. Thank you, Mr. Chairman.
    [The information follows:]


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    Mr. Walsh. I had not heard that phrase before. It is pretty 
catchy.
    Mr. Wofford. Some of my colleagues have heard it. 
[Laughter.]

                       AmeriCorps Promise Fellows

    Mr. Walsh. Let me ask you a couple of questions about the 
AmeriCorps Promise Fellowships. For fiscal year 1999 you are 
planning to spend $6,600,000 for this program, which was not 
part of your fiscal year 1999 budget request. And, as you know, 
you received far less appropriations than what you had 
requested in your budget request.
    For fiscal year 2000, how much money are you requesting for 
this program?
    Mr. Wofford. I believe it is approximately the same. We 
funded it under our innovation and demonstration grant funds 
and authority. Very few of the individual items under 
innovation and demonstration need separate authority, nor do we 
ask for separate authority. We think this is one of the most 
successful demonstrations that we have had.
    As you know, we were one of the key organizing and 
sponsoring for the Presidents' Summit at Philadelphia, now 
nearly two years ago. And our programs around the country and 
the State Commissions set up by governors have played a very 
significant part in General Powell's campaign for America's 
Promise, which is designed to see that every young person has a 
mentor or tutor or coach; an after-school program that is 
stimulating in safe places; health education and access to 
health care; and effective education where you learn to read 
and get marketable skills; and these are four of the five goals 
of the Summit and of America's Promise.
    The fifth goal is that all young people have opportunities 
and challenges to serve. Around the country one of the main 
problems facing General Powell's campaign is the need for some 
full-time people dedicated to it. Because they have got whole 
communities and whole consortia of organizations committed to 
those goals, but with America's Promise and General Powell, we 
have found that the contribution they most wanted was a cadre 
of full-time leaders, AmeriCorps members, who are dedicated to 
those five goals and become organizers and coordinators.
    In most cases, they are allocated by the governors.
    Mr. Walsh. Are they treated like any other AmeriCorps 
volunteer? In other words, you have a specified period of time 
and a stipend at the end?
    Mr. Wofford. Their total living allowance is the same as 
the category we have called AmeriCorps Leader, which I think 
will be $13,000 next year. We have a category that has been 
extraordinarily valuable to local programs, of an AmeriCorps 
Leader who helps a program or a community use the AmeriCorps 
resource well.
    Many of those AmeriCorps Leaders, like the Promise Fellows, 
are people who have had one or two years of AmeriCorps. Other 
than that change, it's essentially the same.
    Mr. Walsh. What might one of these persons do each day, and 
who would they work for? Mr. Wofford. Again, maybe a third, a 
portion of them--and we'll give you a detailed report--work 
through the national nonprofits that are already using 
AmeriCorps members and have committed themselves to the summit 
goals. They get assigned by those national nonprofits to the 
places where they are most determined to move forward in 
providing mentors or tutors or after-school programs.
    I don't want to pick an organization that I'm not sure has 
the Promise Fellows, but let's say Big Brothers and Big Sisters 
is trying to double the number of mentors through its program, 
and they may well have received some Promise Fellows. Most of 
them go to State commissions and the State commissions, in 
collaboration with the governors or the mayors that have 
committed themselves to America's Promise, assign them. In 
Utah, I think they have 12--10-plus Promise Fellows. And 
they're assigned to the different counties of Utah.
    I think you might be interested in a report to you on the 
different kinds of assignments.
    [The information follows:]

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    Mr. Walsh. Yes. And are they also supported by the not-for-
profit? Do they get a stipend or salary from the not-for-profit 
and supplemented by what you provide?
    Mr. Wofford. It would be possible, up to $15,000 under the 
statute, but that's not part of the rules of this program. They 
don't, no.
    But in Tennessee, for example, Kimberly-Clark has provided 
an executive on loan to coordinate, I think, ten Promise 
Fellows who are attached to the State's program for America's 
Promise. It looks like a very promising, new way of doing it. 
An executive with the management skills you were talking about 
was needed in one of the programs in New York. They have a 
really crack manager that they assigned for a year at our 
training program. It was really quite remarkable--you just knew 
it was going to be well led that year in that State.
    Mr. Walsh. It seems like a person like that could not only 
manage the effort of these individuals, but also teach them 
some management skills along the way.
    Mr. Wofford. Well, either our AmeriCorps Leader program, or 
the Promise Fellows, are a tremendous training school in 
leadership. Again, we don't select them, we don't parachute 
them in--we give grants to the organizations that compete on 
how best to use Promise Fellows.
    That is a school for leadership. We try to recruit people 
of outstanding leadership already, but they're on the way to 
becoming greater leaders. This will be a great experience for 
them. They're going to make a big contribution.
    General Powell's message on that is at the end of my 
written testimony.
    Mr. Walsh. Why wasn't this a part of your budget request?
    Mr. Wofford. Well, it was. The funds for innovation and 
demonstration last year were $30 million, is that right?
    Ms. Zenker. Yes.

                         high school americorps

    Mr. Walsh. So it was a part of that.
    Mr. Wofford. It's part of the innovation and demonstration 
funding we've requested. We didn't specify, I don't think, any 
of the different items under demonstrations, but this is one of 
them.
    Oh, we have one very important initiative that I think you 
should pay attention to in our presentation, and that is for 
the high school AmeriCorps program. Again, we had in a 
Connecticut program, and in a summer program of the NCCC, we 
had experience with how well-led, intense summer, full-time 
programs for high school students had a tremendous impact. We 
did that without this new authority that we're asking. And they 
were not AmeriCorps members, because they were under 17. But 
the proposal is for 5,000 AmeriCorps members to be in the 
category of part-time high school, AmeriCorps members, but full 
time during the summer. Students that would be engaged in 
volunteer service in the winter, in the school term, but would 
have a full-time intense experience during the summer and would 
earn the AmeriCorps thousand dollar summer service award.
    We're getting tremendous enthusiasm from outstanding 
organizations, both academic, universities and colleges, and 
big youth-serving organizations for that idea. We very much 
hope you will include it in the Act. It's a very simple change 
to enable the waiver of that 18-year-old limit for this very 
specific high school summer program.
    Mr. Walsh. We'll consider that.
    Since you added this program, have you had to let any 
others slip in order to fund this new initiative?
    Mr. Wofford. Well, no, would be my answer. In deciding how 
to use our demonstration funds, we, and I, as chief executive, 
have to decide on what the priorities are in that demonstration 
fund. But it is ideally a fund for new demonstrations, and this 
is one of the major new demonstrations that we had this year, 
and we're very proud of it.
    Mr. Walsh. Rodney, I have exhausted my questions.
    Mr. Frelinghuysen. I don't believe it, Mr. Chairman. I'm 
sorry to be late.
    Mr. Walsh. Your timing is good.
    Mr. Frelinghuysen. I apologize.
    Mr. Wofford, it's nice to see you again.
    Mr. Wofford. Nice to see you again.

                                 census

    Mr. Frelinghuysen. The Census Subcommittee Chairman, Dan 
Miller of Florida, has proposed using AmeriCorps volunteers to 
go into hard-to-count areas, including rural and inner city 
areas, to help with the census in 2000.
    What are your thoughts on his proposal?
    Mr. Wofford. Well, I've had a short initial talk with 
Representative Miller, and I have also met with the head of the 
Census.
    I have two somewhat differing thoughts. One, AmeriCorps 
members, structurally, under the Act of Congress, are not at 
our call to go and do anything we want. I've been stressing 
before you came that--whether it's the Red Cross nationally in 
its disaster relief program, where we have the rapid response 
program, or one of the 600 nonprofits through the State 
commissions when they get a grant--they then have the duty to 
fill that position--say Habitat for Humanity. There is nothing 
in the intent of Congress to say that we, nationally, can call 
the signals on what these programs that are decided upon by 
governors or State commissions will do. So there is a 
structural problem as to whether for some period of time it 
would be right--and certainly it would not be, under the law, 
appropriate--to require this whole decentralized system to, in 
a sense, ``dance to the Federal tune''.
    On the other side, more affirmatively, in past censuses, 
VISTAs have played very constructive roles on a small scale in 
helping with outreach programs in the community. We have 
certainly assured the head of the Census that, in their public 
outreach programs, through the public schools, we will try to 
help.
    Through our service learning programs, many schools and 
state departments of education would encourage the effort to 
get a full count in the areas where they have a major outreach 
program through the schools that we scholastically are 
cooperating with.
    We are ready to sit down with Congressman Miller and the 
Census to see if there are other ways that we can appropriately 
work together. As you know, they're looking for several million 
people. I don't think--unless an AmeriCorps member, a VISTA, or 
another member, were attached to an Urban League or a local 
program that is cooperating with the Census, trying to reach 
out, and as part of their regular assignment that organization 
wanted to do it--that would be something that would be quite 
appropriate and welcomed. So the idea that the 40,000 
AmeriCorps members and all these decentralized organizations 
would be a major factor in the millions of census enumerators, 
I think there are major questions about that.
    But we are very open to sit down and explore with the 
Congressman and with the Census any additional ways we can be 
helpful. It's a very vital thing, to get a real count, and it 
could be a very exciting thing if we actually do it well. It 
would be a real picture of America.
    Mr. Frelinghuysen. So you're not ruling it out?
    Mr. Wofford. I'm open--Well, the question is what the 
``it'' is, Congressman. In my preference, I would rule out the 
thought that, having made such an effort to show that we're the 
junior partners and are not calling the signals, that we would 
be telling the Red Cross or Habitat for Humanity, or all our 
teaching programs, to let the teachers go and become 
enumerators. I think that would be inappropriate. But I am very 
open to figuring ways in which our 40,000 people, some of them, 
appropriately could be helpful.
    Mr. Frelinghuysen. Certainly if they are working with 
nonprofits in certain areas, I think that would be a natural 
fit.
    Mr. Wofford. A natural, yes.

                               rent costs

    Mr. Frelinghuysen. Mr. Hobson is not here, and in his 
absence I will ask what he asks on an annual basis.
    How much of AmeriCorps' administrative costs are used to 
pay rent? You have a building in New York City, right?
    Mr. Walsh. No.
    Mr. Frelinghuysen. You don't.
    Mr. Wofford. Oh, excuse me, we have----
    Ms. Zenker. We have two staff members who are----
    Mr. Frelinghuysen. You don't have an office in New York.
    Mr. Wofford. In most States we have a State office, yes.
    Mr. Frelinghuysen. Tell us a little bit about some of these 
offices. What are we paying, for instance. Are you in 
Manhattan?
    Ms. Zenker. Yes. I believe we're actually in the World 
Trade Center. But I would like to explain that our staff are 
placed in locations by the General Services Administration. We 
don't pick the location that our small State offices sit within 
many of the communities around the country. They sit in space 
that is leased by the General Services Administration and it is 
assigned to us.
    Under the----
    Mr. Frelinghuysen. I wouldn't suggest for a minute that you 
would want to use the high rent area. I just wondered what the 
associated costs are for these areas.
    Ms. Zenker. Sure. And if I could, I would like to provide 
that for the record. We don't have the detailed information for 
around the country, but we can get it for you.
    Mr. Wofford. Our State offices range from two to five, and 
then some staff----
    Ms. Zenker. There are some offices that are potentially as 
high as eight or ten people.
    Mr. Wofford. Those are service centers.
    Ms. Zenker. But some of our larger States, like California, 
Florida, Texas.
    Mr. Frelinghuysen. Mr. Hobson has had somewhat of a 
fixation on that issue, and it shouldn't surprise you, since 
you have come before us before. Somebody is bound to ask that 
question.
    [The information follows:]

                               Rent Costs

    The Corporation is paying $4.9 million to the General 
Services Administration for building rent in FY 1999. The 
annual rental costs for the office space in New York City is 
$82,044.

                          financial management

    Mr. Frelinghuysen. A general question. Has AmeriCorps met 
all the goals from its fiscal year 1999 Action Plan? If not, 
what shortcomings have yet to be corrected, and when will they 
be corrected?
    Mr. Wofford. Wendy Zenker, the Chief Operating Officer, 
would start by giving you an accounting of that.
    Mr. Frelinghuysen. I am particularly interested in what the 
costs would be if things are not corrected.
    Ms. Zenker. We have an Action Plan that we originally 
shared with the Congress on December 19th, and since that time 
we've been providing bi-monthly updates. Every two months we 
give you an update. The last one was February 19th, and we'll 
be giving you another update around April 21st.
    The Action Plan includes all our efforts to correct the 
material weaknesses that have been identified through the 
Corporation's financial statement audits over the past two 
years. As well as other high priority initiatives in order to 
become compliant for year 2000, other initiatives and 
information technology----
    Mr. Frelinghuysen. So to be specific, have you met all 
eight goals?
    Ms. Zenker. This is our plan for this year. We are in the 
midst of meeting goals and objectives that we've established. 
We have about 177 tasks that are defined in this plan. In our 
February report, we indicated that 69 of those 177 had been 
completed. Others are planned to be completed over the course 
of this year.
    There is no single goal that has been absolutely and 
completely accomplished, but we do have plans to do that over 
the course of the year.
    Mr. Frelinghuysen. You had, though, eight basic goals?
    Ms. Zenker. Yes, sir.
    Mr. Frelinghuysen. And you're telling me they're broken up 
into 177 different tasks. How would you characterize your 
success in meeting the eight basic goals?
    Ms. Zenker. Generally, we're on track.
    Mr. Frelinghuysen. I'm not trying to put anyone on the 
spot. If you lay out an action plan, we normally on this 
committee want to know how successful have you been. We're 
talking about 2000 here, but looking back.
    Ms. Zenker. In terms of our current Action Plan, I think we 
are on schedule for the most part. That doesn't mean there 
aren't some things that are slipping and that we're not 
accomplishing the actual date that we originally projected.
    We also had a plan for 1998. That was referred to as our 
auditability plan: what did we need to do so that we could have 
a financial statement audit conducted for our FY '97 and '98 
statements. We accomplished many of the goals in that 1998 
plan. The ones that are still open have been rolled into our 
1999 plan. That plan is the one we're currently working on.
    Mr. Frelinghuysen. So there are eight goals, or eight plus 
whatever was not fulfilled in 1998?
    Ms. Zenker. There are eight goals. The things not done in 
1998 are a part of that.
    Mr. Frelinghuysen. We have a habit on this committee of 
actually going back to the hearing record, not necessarily to 
catch our witnesses up short, but it is sometimes interesting 
to know whether, in fact, goals have actually been achieved or 
whether they fall in the category of unattainable.
    Mr. Walsh. I will leave this here with you and your staff. 
[Handing document.]
    Mr. Frelinghuysen. Good God. [Laughter.]
    Mr. Wofford. These are the eight goals. This is our 
February progress report on each of the eight goals. Those 
goals will take us--we will be working on all eight of those, 
in one form or another, and some will get completely solved. 
But in general, that's going to be a chart for what we're going 
to need to be doing for the next two years.
    Mr. Frelinghuysen. And you're submitting something on a 
monthly basis----
    Mr. Wofford. Every two months.
    Mr. Frelinghuysen. Every couple of months. Okay.
    How would you characterize----
    Mr. Wofford. Earlier I said we've made very substantial 
progress, but not enough to satisfy you or me. We have hard 
work still to do. We think we now have it well analyzed and the 
tasks well-defined, and the deadlines in this plan there for 
each of the action points under the goals are spelled out.
    As we learn about any additional problems that need to be 
defined, and the deadlines, we're going to be adding them and 
reporting this on a bi-monthly basis to you.
    Ms. Zenker. If I may, Congressman, on the question as to 
whether or not we're making progress, we shared a chart earlier 
in the hearing that shows the progress we're making in being 
able to get our financial statements audited. You can see in 
the early years we were not auditable. In FY '97, for the first 
time, we were able to do a balance sheet audit of our financial 
statements. That's only the first schedule. We got a qualified 
opinion. There were two qualifications and six material 
weaknesses.
    In 1998, for the first time, we were able to get an 
unqualified opinion on that balance sheet audit. There are 
still material weaknesses. Subsequent schedules have also been 
audited and they've been disclaimed. But there is a degree of 
progress that you can see, in going from not being auditable, a 
qualified opinion, and an unqualified opinion, on our balance 
sheet. So that's one type of measure we can use.
    Mr. Wofford. And we now have a base on the auditing through 
the balance sheet that lets us take this next fiscal year audit 
as an audit that does not try to go back for years and years of 
problems with VISTA accruals and other historical problems, but 
lets us now go forward. We will have an opportunity to get all 
the way to the clean audit next year, if we work it all out 
successfully in the rest of this fiscal year.
    Mr. Frelinghuysen. The fiscal year 1999 audit by your 
Inspector General revealed that $1.6 million in funding could 
have been put to better use. What was the money originally 
spent for and what action has been taken to redirect those 
funds?
    Ms. Zenker. I'm sorry. I'm going to have to get back to you 
on the record for that. I'm not as familiar as I should be with 
that report.
    [The information follows:]
                   Expenditure of $1.6 Million Funds
    The $1.6 million in funding cited in the Inspector General Audit 
Report No. 98-24 refers to monies spent for personnel and consultant 
services provided by contractors between July 1994 and June 1998. The 
audit report states that the Corporation paid approximately $1.6 
million more to contractors than the services would have cost using 
Corporation employees and consultants hired directly by the 
Corporation.
    Those funds have been expended. The Corporation has taken and is 
taking steps to reduce its reliance on this type of contractor support. 
In December 1998, one of the two major contracts cited by the Inspector 
General expired, and a Corporation solicitation for similar services 
was canceled. The Corporation obtains these services now by direct 
Federal employees.
    There were two other contracts, cited in the audit report. Both 
contracts are with the same vendor. One of the two contracts has 
expired and will not be renewed. For the second contract, the 
Corporation is studying its options for modifying this contract and is 
presently having discussions with the Small Business Administration 
(SBA) since this contract is in the SBA 8(a) program. The Corporation 
will make its determination after consulting with SBA.

                        criminal investigations

    Mr. Frelinghuysen. The OIG has two significant criminal 
investigations pending. What is the nature of the activity 
involved in each case, what's the current status of each? Was 
either related to the grant management process and, if so, 
what, if any, steps has AmeriCorps taken to address the OIG's 
criticism?
    Ms. Zenker. With respect to the investigations that are 
currently underway, I'm afraid I'm going to again request that 
we respond for the record and ask the Inspector General to 
assist us in that response.
    [The information follows:]

    The Corporation contacted the Office of the Inspector General in 
response to Congressman Frelinghuysen's question, and the Inspector 
General stated that it is generally their policy not to comment on any 
pending criminal investigation. Although the Inspector General's 
reports to Congress make clear that there are several pending criminal 
investigations, we have no way of knowing which two investigations 
Congressman Frelinghuysen is referring to, nor do we have any other 
avenue for obtaining more detailed information about the 
investigations. Congressman Frelinghuysen and other members of the 
Committee may wish to contact the Office of the Inspector General 
directly if they are interested in pursuing this further at this time.

    Ms. Zenker. With respect to investigations that she has 
completed and we've had closure on, there are particular 
instances that individuals have either been sentenced and gone 
to jail, and in others there have been fines levied against the 
individual.
    What we're doing for the program as a whole, when we find 
these individual occurrences of fraud, we attempt to look 
carefully at what we can do to better monitor our programs. 
This is in keeping with some of the questions that the Chairman 
asked earlier, in terms of what can we do to better monitor the 
grants that go to State commissions and the subgrants that 
State commissions make to local projects.

                         cost accounting system

    Mr. Frelinghuysen. The OIG--and correct me if I'm wrong, 
maintains ``The Corporation lacks a reliable cost accounting 
system.''
    Ms. Zenker. That's correct.
    Mr. Frelinghuysen. Have you addressed that prior to my 
arrival here?
    Ms. Zenker. No, sir, we haven't.
    Mr. Frelinghuysen. Maybe you could do that now. What's 
being done to correct this and when will it be completed? I 
understand this has been a longstanding and continuing problem. 
Is that accurate?
    Ms. Zenker. We don't have a cost accounting system, and we 
don't have plans in place right now to create a cost accounting 
system. We have identified what our most serious weaknesses are 
and we're trying to fix those--significant weaknesses. We're 
putting in a new core accounting system so that we'll have 
better financial information that we can share with you.
    Mr. Frelinghuysen. What exists now?
    Ms. Zenker. We have a system that is not year 2000 
compliant. It's referred to as ``Federal Success''----
    Mr. Wofford. Which is the system that VISTA and ACTION have 
used for many years.
    Mr. Frelinghuysen. So you inherited it.
    Mr. Wofford. We inherited it. And my predecessor, probably 
rightly, decided the only way to start the Corporation, since 
ACTION was folded into the new AmeriCorps, and other new 
programs, was to build on the ACTION system. Many of the 
problems we're dealing with are problems that go back to both 
the procedures and systems, including the Federal success 
system, which once was considered one of the best Federal 
reporting systems.
    By the time I learned about this, it was considered 
antiquated. We now have this state-of-the-art Momentum system 
that is in the process right now of being put into full 
implementation.
    Mr. Frelinghuysen. So you've been dealing with 
obsolescence?
    Ms. Zenker. Yes, and----
    Mr. Frelinghuysen. But the OIG's statement is somewhat 
damning. I understand there's a Y2K problem that every Federal 
agency and private sector company is facing. But not to have a 
reliable cost accounting system, putting aside the fact that 
there may be a Y2K problem as well, is a pretty serious 
situation.
    Ms. Zenker. If I may, we actually have two circumstances, 
if I can just take a minute to describe.
    One is in the financial management system that we're 
looking to install, because the one we have is antiquated, not 
Y2K compliant, and we need a new one. We're in the midst of 
doing that.
    With respect to the Inspector General's comment on a cost 
accounting system, what she is looking for there is an 
opportunity for us to be able to account for how, on an hour by 
hour basis, our staff spends their time. This concern was 
specifically related to the special plan that we needed to give 
you on how we were spending the $3 million for urgent needs.
    It's equivalent to a law firm's billing system. Do we know 
that a staff member is spending 50 percent of their time on a 
certain project, 25 percent on others, or 10 percent on 
something else. We don't have that type of cost accounting 
system.
    Mr. Frelinghuysen. So you're saying the OIG is talking 
about a personnel issue rather than cost accounting?
    Ms. Zenker. To a certain extent. There's more than just 
personnel that would be part of a cost accounting system--how 
much does it cost us to run our programs.
    Mr. Frelinghuysen. I should think that's a fairly basic 
responsibility.
    Ms. Zenker. And it is. But again, there are little things 
that are specifically----
    Mr. Frelinghuysen. Not knowing exactly what people do 
during the day, of course, is somewhat disturbing. But not 
having a handle on costs would be even more disturbing.
    Ms. Zenker. It is. We do have a handle on costs, but we're 
not able to go down to the level of specificity that she would 
like to see us do.
    In terms of what we can do, we're not able to put every 
initiative on the plate right now and say we can do it this 
year or we can do it next year. We have identified the most 
serious weaknesses that we think we need to correct, and we 
want to correct those first and then go to other types of 
initiatives that also need attention, but this issue is perhaps 
not as high a priority as the current material weaknesses we 
have identified. So cost accounting would be farther down the 
road----
    Mr. Frelinghuysen. I hope you can all sort it out sooner 
rather than later.
    Ms. Zenker. Yes, sir.
    Mr. Frelinghuysen. Thank you very much for your responses.
    Thank you, Mr. Chairman.
    Mr. Walsh. All right. If there are additional questions 
from the other members, we will submit them, if you could 
respond back in a timely manner.
    We thank you for coming in this morning, and thank you for 
your comments. We look forward to working with you as we work 
through this budget process.
    Mr. Wofford. Thank you.
    Ms. Zenker. Thank you.


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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Johnson, Gary....................................................     1
Walker, Mike.....................................................     1
Witt, J.L........................................................     1
Wofford, Harris..................................................   591
Zenker, Wendy....................................................   591


                               I N D E X

                              ----------                              

                  Federal Emergency Management Agency

                                                                   Page
Chairman's Opening Remarks.......................................     1
Closing..........................................................    92
Corps of Engineers:
    Continuing to Work with the Corps of Engineers...............    38
    Cooperation with Corps of Engineers..........................    36
    Working Relationship with Corps of Engineers.................    49
Cover America Program............................................    39
Director's Opening Remarks.......................................     1
Disaster Assistance:
    Consistent Application of Rules in Disaster Programs.........    43
    Disaster Relief Emergency Contingency Fund...................    53
    FEMA's Role in Determining Unmet Needs.......................    58
    HUD's Funding for Unmet Disaster Needs.......................    43
    Insurance for Public Buildings...............................    18
    Need for Supplemental Disaster Relief Funds..................    18
    Snow Emergency in Michigan...................................    89
    Working with HUD on Community Development Block Grants for 
      Disaster Relief............................................    37
Emergency Food and Shelter Program:
    Emergency Food and Shelter Allocations.......................    41
    Need for Increase for Emergency Food and Shelter.............    19
Emergency Management Performance Grants:
    Consolidated Emergency Management Performance Grants.........    51
    Consolidated Emergency Management Performance Grants.........    56
    Cost Sharing for Consolidated Grant..........................    90
    Sustaining State and Local Emergency Management Capabilities.    58
Flood Program:
    Lender Compliance............................................    41
    Subsidized Flood Policies....................................    40
HAZUS-99.........................................................    52
Justification of Estimates.......................................   146
Map Modernization:
    Mortgage Transaction Fee.....................................    18
Minority Employees at FEMA.......................................    87
Mitigation:
    Earthquake Preparedness......................................    51
    Protecting Research Institutions.............................    88
    State Funding for Buyouts....................................    45
    Tornado Mitigation...........................................    50
Pre-Disaster Mitigation:
    Contribution for Project Impact..............................    49
    Dollars Leveraged by Project Impact..........................    57
    Funds Leveraged for Project Impact...........................    54
    Measuring the Success of Project Impact......................    36
    Success of Project Impact....................................    22
Preventing Disasters.............................................    55
Questions for the Record.........................................    93
Testimony of Federal Emergency Management Agency Director James 
  L. Witt........................................................     3
Upgrades to Emergency Response Equipment.........................    91

             Corporation for National and Community Service

Action Plan Progress Report......................................   712
Aguirre International AmeriCorps Evaluation Report...............   594
AmeriCorps Demographics Information..............................   662
AmeriCorps Promise Fellows.......................................   686
Budget Justification.............................................   748
Call to Service..................................................   677
Census...........................................................   692
Cost Accounting System...........................................   697
Criminal Investigations..........................................   696
Current Trust Liability..........................................   655
Eligibility Requirements.........................................   661
Financial Management.............................................   694
High School AmeriCorps...........................................   691
Learn and Serve America..........................................   679
Literacy Efforts.................................................   680
Literacy Programs in Washington, DC..............................   668
Management of AmeriCorps Programs................................   652
National Service Trust...........................................   654
Oral Statement...................................................   592
Political Involvement Prohibited.................................   653
Proposed Increase in AmeriCorps Members..........................   660
Questions for the Record.........................................   699
Recruitment......................................................   678
Rent Costs.......................................................   693
Volunteer Leveraging.............................................   681
Written Statement................................................   618

                                
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