    [From the U.S. Government Printing Office, www.gpo.gov]

    BY THE COMPTROLLER GENERAL
    0Report To The Congress
    OF THE UNITED STATES

    Requests For Federal Disaster Assistance
    Need Better Evaluation

    Since 1970 the President's Disaster Relief Fund has
    provided over $3.8 billion to individuals and State
    and  local governments.	The  Federal Emergency
    Management  Agency,	in assessing eligibility for
    disaster assistance, has had difficulty in determin-
    ing whether State and local governments are capable
    of handling their own disasters and whether they
    are committing a reasonable amount of their avail-
    able funds for disaster relief. GAO also found that
    the  Agency  has adopted  a controversial  cost-
    sharing policy and has funded other than natural
    disasters.
    GAO recommends that the Congress clarify (1) the
    extent of supplemental  Federal assistance to be
    given and (2) what kinds of disasters are eligible for
    Federal assistance. The  Federal Emergency Man-
    agement Agency should analyze the  impact  po-
    tential State inequities have on  Federal disaster
    assistance and  submit a detailed plan and legis-
    lative changes to the Congress to correct such
    weaknesses.

    ~~ 551.3
    .  U55
    : 1981         U	.iV 0                                    :  :CED-82-4
    (W   :                                                        -~~~~~~~~r~~~~~~ DECEMBER 7, 1981

    !
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    ~~~0LLER %~~~~~~6

    COMPTROLLER GENERAL OF THE UNITED STATES
    WASHINGTON D.C. 20548

    B-i199765 .2

    To the President of the Senate and the
    Speaker of the House of Representatives
    This report describes the difficulties the Federal Government
    faces in assessing the eligibility of State and local governments
    for supplemental disaster assistance. It recommends- that the
    Congress'clarify the extent of disaster assistance provided to the
    States and the Federal role in "non-natural" disasters. It also
    recommends that the Federal Emergency Management Agency (FEMA)
    take specific actions to improve its capability to evaluate
    �    ~disaster assistance requests.

    This review addresses concerns arising from previous GAO
    reviews regarding the disaster declaration process and FEMA's
    .role in making recommendations to the President. This issue is
    important because of the substantial Federal paymonts which can
    result from this process. FEMA's proper assessment of requests
    for disaster assistance is crucial to Presidential decisions to
    grant or deny Federal disaster assistance.

    we are sending copies of this report to the Director, Office
    of Management and Budget; the Directpr, Federal Emergency Manage-
    ment Agency; and interested congressional committees, subcommit-
    tees, and individual Members of Congress.

    .Comptroller General
    of the United States

    Li Sz. DEPARTMENT OF COMMERCE NOAA
    COASTAL. SERVICES CENTER
    rllr~l  M I   2234 SOUTH HOBSON AVENUE
    CHARLESTON, SC 29405-2413

    -property Of csc Library

    COMPTROLLER GENERAL'S	REQUESTS FOR FEDERAL DIS-ASTER
    REPORT TO THE CONGRESS	ASSISTANCE NEED BETTER EVALUATION

    D IG ES T

    From fiscal year 1970 through April 1981, the
    President provided individuals and State and
    local governments with over $3.8 billion from
    the President's Disaster Relief Fund. This
    included 376 major disasters and 84 emergencies.
    From the beginning of fiscal year 1979 through
    April 198,1,, the President provided disaster
    relief assistance of over $1.2 billion in 73
    major disasters ar~id 17 emergencies. Since the
    beg-inn ing ofifiscal year 1979 other Federal
    agenci,es havle also authorized loans or provided
    direc;t assistance totaling $1.6 billion.

    GAO initiated this review to address concerns
    arising from previous reviews regarding the dis-
    aster declaration process and the Federal Emer-
    gency Management Agency's (FEMA's) role in making
    recommendations to the President. This issue is
    important because of the substantial Federal
    payment s which can result from this process.
    GAO found problems existed in determining the
    reasonableness of disaster assistance provided
    by State and local governments. GAO also found
    that FEMA has adopted a controversial cost-
    sharing policy and has funded other than natural
    disastets. (See pp. 7, 22, and 35.)

    The Federal Disaster Relief Program is intended
    to supplement the assistance States, their po-
    litical subdi.visions, private relief organiza-
    tions, and citizens provide for disaster relief.
    If a catastrophe is of sufficient severity and
    magnitude to warrant Federal assistance, the
    President can declare a major disaster or emer-
    gency. A broad range of assistance then becomes
    available to individual disaster victims and
    State and local governments. (See pp. I through
    3.)

    FEMA evaluates requests from State Governors for
    assistance and recommends declarations or denials
    to the President. Since the beginning of fiscal
    year 1979, 90 major disaster and emergency re-
    quests have been declared and 64 requests have
    been denied. GAO undertook this review to deter-
    mine the type and amount of information FEMA
    obtains, the criteria it uses to evaluate the
    requests, and the bases for its recommendations.
    (See pp. 3 and 5.)
    Tear Sheet                                                  CD8-
    DECEMBER 7, 1981

    GAO is making a number of recommendations to
    the Director, FEMA, to ensure that each request
    for major disaster or emergency assistance is
    treated in a fair and equitable manner. GAO is
    also recommending that the Congress clarify a
    numbet of issues so that FEMA can better admin-
    ister the law according to the Congress' intent.
    (See pp. 19, 33, 34, 38 and 40.)
    DETERMINING REASONABLENESS OF
    STATE AND LOCAL GOVERNMENT ASSISTANCE
    When FEMA receives a major disaster or emergency
    request for assistance from a State Governor, it
    needs to quickly evaluate the situation and
    determine whether a declaration should be made.
    These requests vary greatly as to form and con-
    tent and do not always fulfill the requirements
    of law or contain all of the types of information
    FEMA uses to evaluate requests. (See pp. 8, 22,
    24, and 28 to 31.)
    FEMA assesses the severity and magnitude of the
    situation and the capability and resource com-
    mitments of the State and local governments and
    makes its recommendation to the President. As-
    sessment of severity and magnitude are reason-
    ably consistent but those of capability and
    commitment vary greatly because of the type,l
    quality, and degree of information considered.
    GAO's review Of 31 disaster requests disclosed
    that FEMA uses a wide range of information in
    arriving at its decisions. For example, FEMA
    considered "State surplus" information in only
    seven requests. The'lack of Consistency in the
    quality and method of assessments and the lack
    of knowledge by others,as to FEMA's methods of
    evaluation can create doubt as to whether the
    Federal Government is only providing supplemen-
    tary assistance and whether each,request is
    judged in a fair and equitable manner. (See
    pp. 7, 22, and 28 through 32.)
    FEMA's policies, procedures, and guidelines for
    evaluating requests are not widely known. Dis-
    closing internal assessment processes would help
    State ;and local governments decide whether they
    had a valid request to make, enable them to pro-
    vide more complete and uniform ihformation, and
    minimize doubts as to whether their requests are
    treated in a fair and equitable manner. (See
    pp. 32 and 33.)
    ii

    GAO is -recommendinci that the Director of FEMA
    reevaluate and -improve its assessment criteria;
    publish the policies, procedures, and guidelines
    which FEMA uses to evaluate requests in the
    Federa'l-Register;1 develop comprehensive, uniform
    f-orms tor State and Federal officials to use;
    require,Gov'ernors to provide the information
    necessary for the evaluations; and make it clear
    that future requests which fully comply with
    Feder'al laws,,and regulations will help avoid
    delays in processing the requests.  (See pp. 19,
    33," and 34..)

    GAO is recommending that the Congress direct
    FEMA to prepare a comprehensive analysis of the
    impact potential State inequities have on Fed-
    eral disaster assistance.and submit a detailed
    plan and legislative changes to the Congress to
    correct such weaknesses. GAO made this same
    recommendation to FEMA in 1979. I/ (See p. 34.)

    THE CONGRESS NEEDS TO CLARIFY
    DISASTER ASSISTANCE ISSUES

    Two recent actions have raised concerns that
    FEMA may have changed the scope of the Disaster
    Relief Act. First, in May 1980, FEMA adopted a
    gene'ral policy of requiring State and local
    governments to agree to pay 25 percent of the
    eligible costs of public assistance programs.
    This 'policy removes the administrative problems
    ass~ociated with attempting to determine a
    "reasonable" commitment for each disaster and
    assures compliance with the statutory purpose
    that the Federal aid be supplemental.

    Although FEMA's cost sharing policy is consistent
    with the act, it has created controversy among
    the States. State officials contend that the
    policy forces them to pay for disaster relief
    costs which the States believe are beyond their
    capability to assume or which constitute more
    than a'reasonable amount of State and local
    funds. Because of the controversy, GAO believes
    that the Congress needs to clarify its intent on
    this matter.

    Second, the President has provided disaster
    assistance for such events as the Love Canal
    chemical contamination and the Cuban refugee

    1/"Federal Snow Removal Reimbursement Policy:
    Improvements Needed" (CED-79-97, Aug. 2, 1979).
    Tear Sheet
    l
    iii

    influx in Florida. This action has stirred
    considerable controversy as to whether other
    than natural catastrophes are within the pur-
    view of existing law. Although congressional
    intent is not clear on this matter, the act
    does allow the President to make declarations
    for other catastrophes. (See pp. 35 through
    40.)

    GAO is recommending that the Congress reevaluate
    the act and clarify its intent with regard to
    the extent to which supplemental Federal assis-
    tance should be given in a major disaster and
    the types of incidents that may receive disaster
    assistance. (See pp. 38 and 40.)
    AGENCY COMMENTS
    The Director, FEMA, said this report has a
    number of worthwhile comments regarding the
    problems associated with State and local govern-
    ment commitments, State and local government
    capability, and cost sharing. He said most of
    GAO's recommendations will be considered during
    FEMA's current revision of a regulation relating
    to the declaration process. The Director did
    not agree to GAO's proposal that FEMA use com-
    puter modeling as a tool for program decision-
    making and evaluation. (See app. III.)
    Shortly after receipt of the Director's comments,
    FEMA established a plan for considering all of
    GAO's recommendations, including a review of
    computer applications, with final regulatory
    action to be completed by September 30, 1982.
    Until the regulation is issued and other actions
    are completed, GAO has no basis for evaluating
    the Director's response to its recommendations
    or the FEMA plan. GAO continues to believe that
    the.adoption and use of computer modeling would
    aid FEMA in (1) developing more uniform data,
    (2) refining assessment criteria, (3) providing
    more uniformity in program evaluations, and (4)
    giving FEMA officials better management control
    over the operation of its disaster assistance
    program.
    The Director's comments and GAO's evaluations
    are also contained on pp. 10, 13, 19, 20, 21,
    27, 31, 32, 34, 38, and 39.
    iv

    I
    C on te nt s

    -.                     ~~~~~~~Page

    DIGESTi
    CHAPTER
    INTRODUCTION,1
    Disaster Relief Program                         2
    Organization and,management of the
    Disaster Relief Program	4
    Objectives, scope, and methodology	5
    2         OPPORTUNITIES TO IMPROVE DATA GATHERING
    AND DISASTER ASSESSMENTS	7
    Assessing need for Federal assistance	7
    Problems in reviewing FEMA assessments a
    S-tatistical analysis indicates
    consistency in FEMA decisions	9
    Conclusions	19
    Recommendations	19
    Agency comments and our evaluation	19

    3         IMPROVEMENTS SHOULD BE MADE IN EVALUATING
    THE ABILITY OF STATE AND LOCAL
    GOVERNMENTS TO HANDLE MAJOR DISASTERS AND
    EMERGENC IES                                     22
    Limited guidance for State and local
    governments                                  22
    Evaluation of the capability and commit-
    ment of State and local governments not
    conclusive                                   24
    States' financial capabilities need to
    be adequately assessed	31
    Conclusions	32
    Recommendations	33
    Agency comments and our evaluation	34
    Recommendation to the Congress	34

    4         THE CONGRESS NEEDS TO CLARIFY
    DISASTER ASSISTANCE ISSUES                       35
    FEMA cost-sharing policy is consistent
    with the act	35
    Conclusion	38
    Recommendation to the Congress	38
    Agency comments and our evaluation	38
    Using the Disaster Relief Act for other
    than natural catastrophes needs
    clarification	39
    Conclusion	40
    Recommendation to the Congress	40

    I

    I
    Page
    APPENDIX
    I

    II
    III

    DR& R
    FEMA-
    GAO
    Major disasters? emergencies, and denials
    reviewed by GAO
    Technical analyses

    Letter dated September 29, 1981, from the
    Director, Federal Emergency Management Agency
    ABBREVIATIONS
    Disaster Response and Recovery
    Federal Emergency Management Agency
    General Accounting Office
    41
    43

    52

    CHAPTER 1

    INTRODUCTION
    In 1950 the Congress enacted the first comprehensive disaster
    relief program. This program authorized the President to provide
    assistance for the temporary repair of local governments' public
    facilities. Subsequent laws have extended this assistance to
    include individuals and State governments and have broadened the
    extent of coverage to include permanent repairs of public facil-
    ities and other items. The present law contains a wide range
    of grants and direct assistance programs for individuals and
    State and local governments.
    From the beginning of fiscal year 1970 through April 30,
    1981, the President received 729 requests for major disaster or
    emergency assistance. Federal assistance of $3.8 billion was
    provided under the President's program for the 376 major disas-
    ters and 84 emergencies that were declared. Figure 1 compares
    requests with Presidential declarations of major disasters and
    emergencies from calendar year 1974 through calendar year 1980.

    FIGURE 1
    PRESIDENTIAL DECLARATIONS OF MAJOR DISASTERS
    AND EMERGENCI(ES
    CALENDAR YEARS 1974 THROUGH 1980
    I '7n
    74        5            76l         77          78          79          80
    Source: Federal Emergency Management Agency
    1

    DISASTER RELIEF PROGRAM
    When a disaster threatens or occurs, local authorities
    take immediate steps to warn and evacuate citizens, alleviate
    suffering, anad protect life and property. if additional help
    is needed, the Governor may exe-cute the State's emergency plan
    or commit State resources.

    The President's Disaster Relief Program is intended to
    supplement the assistance provided by the States, their political
    subdivisions, Private relief organizations, and citizens. When
    Governors believe that supplemental Federal assistance is neces-
    sary they may request that the Pvesident declare a "major dis-
    aster" or an "emergency" to implement the provisions of Public
    Law 93-288, the Disaster Relief Act of 1974. This act defines
    major disaster as any:
    11** *hurricane, tornado, storma, flood, high
    water, wind-driven water, tidal wave, tsunami,
    earthquake', volcanic eruption, landslide,
    mnudslide, snowstorm, drought, fire, explosion,
    or other catastrophe in any part of the United
    States which, in the determination of the
    President, causes damage of sufficient sever-
    ity and magnitude to warrant major disaster
    assistance under this Act, above and beyond
    emergency services by the Federal Government,
    to supplement the efforts and available re-
    sources of States, local governments, and
    disaster relief organizations in alleviating
    the damage, loss, hardship or suffering caused
    thereby."

    in certain instances, the full range of assistance available
    with a major disaster declaration may not be required.  in such
    cases, the Governor may decide to request the President to declare
    an emergency, which would provide specialized assistance to meet
    a specific need that the Federal Government is uniquely able to
    provide. An emergency is any of.the various types of disasters
    included in the definition of a major disaster which requires
    Federal emergency assistance to-supplement State and local efforts
    to save lives; protect property, public health, and safety; or
    avert or lessen the threat of a disaster.

    The Governor's request for a major disaster declaration by
    the President must be 'based on a finding that the situation is
    of such severity and magnitude that effective response is beyond
    the State's and affected local governments' capabilities and that
    Federal assistance is necessary. The Governor must certify that
    a reasonable amount of State and local funds had been or will be
    used (of which State commitments must be a significant propor-
    tion) . The "Governor must also estimate the extent and nature of
    Federal assistance required for each of the disaster-affected
    areas. in conjunction with the Governor's request for a major
    ,disaster declaration, the Governor must take appropriate action
    under State law and direct the execution of the State's emergency
    plan.
    2

    A P.residential declaration of a major disaster makes a broad
    range 6f Fed'eral assistanc-e available to individual: disaster vic-
    tims and State and local governments. This help may include
    temporary housing, minimum essential repairs to residences,
    disaster unemployment assistance, food stamps, individual and
    family grants to meet disaster-related necessary expenses, and
    various other services. Assistance to governmental jurisdictions
    may be directed at debris removal; emergency protective measures;
    or repair or replacement of roads, streets, bridges, water
    control facilities, and other public facilities.

    After the President declares a major disaster or emergency,
    the Federal Emergency Management Agency (FEMA), based upon the
    Governor's request, designates the areas within the State that
    will receive assistance and specifies the type of assistance that
    will be provided.

    Program statistics

    The President may approve or deny a Governor's request for
    a major disaster or emergency declaration.  The following table
    identifies the disposition of all requests for fiscal years 1979,
    1980, and 1981 through April 30.

    1979     1980         1981      Total

    (7 months)
    Major disasters:
    Declarea	42	25	6	73
    Denied	6	29	11	46

    Total	48	54	17	119
    Emergencies:
    D Declared	11	5	1	17
    Denied -	9	5	4	18

    Total	20	10	5	35

    Total requests	68	64	22	154

    Once.the' President makes a declaration, FEMA has authority
    to spend fundsifor disaster. assistance from the President's
    Disaste.r..Relief Fund.  In addition to the President's Disaster
    Relief Fu'nd, FEMA can call upon other Federal agencies to provide
    disaste'r assistance with or without reimbursement to the agencies
    from the President's Fund.  Federal agencies can also provide
    assistance under their own authorities.
    3

    The table below identifies estimated President's,Fund
    requirements for major disasters and emergencies declared for
    fiscal years 1979, 1980, and 1981 through April 30.

    1979        1980        1981        Total

    (7 months)
    �-------------- (000 omitted)�

    Major disasters
    Individual
    assistance     $199,162    $ 60,518    $ 3,110   $  262,790
    Public
    assistance	418,788	239,439	29,846	688,073

    Total	617,950	299,957	32,956	950,863

    Emergencies	29,894	a/233,487	2,467	265,848

    Total        $647,844	$533,444    $35,423   $1,216,711
    a_/Of this amount, $191 million is for the Cuban refugee emergency.
    FEMA estimated that other Federal agencies, such as the Small
    Business Administration, Farmers Home Administration, and the
    Corps of Engineers, authorized loans or provided other assistance
    totaling $1.6 billion. During this period, FEMA was authorized
    to spend $21.4 million for administering the disaster relief
    program.

    ORGANIZATION AND MANAGEMENT
    OF THE DISASTER RELIEF PROGRAM

    FEMA's Office of Disaster Response and Recovery (DR&R) 1/
    is responsible for implementing the President's Disaster Re-
    lief Program. DR&R is headed by an Associate Director, who
    reports directly to the Director, FEMA.

    DR&R staff are in each of FEMA's 10 regional offices.
    In May 1981, DR&R had 154 staff members, 64 at headquarters and
    90 in the regional offices. When a major disaster or emergency
    request is received, regional personnel assess the damage and
    evaluate the need for Federal assistance. The region makes its
    recommendation to headquarters, which reviews the data and makes
    its recommendation to the President. When a request is granted,
    regional personnel coordinate response and recovery activities.

    I/On June 5, 1981, after the completion of our review, FEMA
    announced the first step in reorganizing the agency. The
    organization discussed in this report is that which existed
    at the time of our review.
    J

    I
    I
    4

    I

    I

    i
    DR&R augments its permanent staff with "reservists" who are
    employed by the region.  These reservists are disaster assistance
    specialists_ who, as.sist DR&R in carrying out its responsibilities
    at the disaster site.

    OBJECTIVES, SCOPE, AND METHODOLOGY
    We> initiated this assignment to address concerns arising
    from previous GAO reviews regarding the disaster declaration pro-
    cess. and FEMA's role. in making recommendations to the President.
    This is:sue i's important because of the substantial Federal pay-
    ments wh'ich can, result fr.om this process.  The review objectives
    were to .'determine the type and amount of information FEMA obtains
    on maj;or disaster and emergency requests and to evaluate the
    criteria it 'used to make recommendations for declarations and
    denials.

    Our review was conducted from April 1980 through May 1981
    primarily 'at FEMA headquarters in Washington, D.C.  We also re-
    viewed  records and interviewed officials in FEMA's Atlanta Re-
    gional Office.  We interviewed the State Deputy Director of Civil
    Defense in Atlanta, Georgia, and the State Director, Department
    of.Civil Defense, in Montgomery, Alabama.  We also discussed the
    disaster. declar-ation process with officials of the National
    Governors Association, Washington, D.C., and obtained their
    views on establishing criteria for a declaration.

    In,.February 1981, Congressman Steve Gunderson of Wisconsin
    requested that our Office determine whether FEMA was administer-
    ing-disaster assistance programs consistently, effectively, and
    according. to congressional. intent.  In this regard, the Admin-
    istrator.,.Division of Emergency Government, Madison, Wisconsin,
    provided us with certain documents and records. We discussed
    with Congressman Gunderson his specific questions about the
    disaster assistance program and advised him that this review and
    our ongoing review of Federal disaster assistance provided to
    State and local communities would address his concerns.

    Senator Edward Zorinsky expressed his support for this review
    and voiced his concern regarding FEMA's cost-sharing policy of
    reimbursing State and local governments for only 75 percent of
    public assistance costs. We advised Senator Zorinsky that this
    question would be addressed in our report.

    We reviewed the Disaster Relief Act of 1974 (Public Law
    93-288), related FEMA regulations, and obtained legal opinions
    from our Office of General Counsel on several issues.

    We analyzed disaster records and statistics to identify
    important areas and issues for further consideration. We made
    comparative analyses by regions and States and by similar types
    of disasters, locations, time periods, and dollar size. From
    these analyses, we selected and reviewed 24 major disasters, 8
    emergencies, and 9 requests which were denied. These reviews
    involved 26 different States and 9 FEMA regions. Because large
    5

    major disasters, such as Mt. St. Helens, would need less
    documentation to support a declaration, we concentrated our eval-.
    uation on the smaller disasters. Although I major disaster we
    reviewed required an estimated $129 million from the President'a
    Disaster Relief Fund and 1 emergency about $21 million, the
    remaining 23 major disasters averaged $3.2 million and the re-
    maining 7 emergencies averaged about $262,000. (See app. I for
    a list of major disasters, emergencies, and denials revliewed by
    GAO.)
    Some general criteria for evaluating requests are contained
    in the act. However, FEMA advised us that it had developed no
    additional specific criteria for evaluating requests for assis-
    tance as each request is different and has to be subjectively
    evaluated on the information available. We analyzed the data con-
    tained in Governors' letters of request, regional assessments,
    and headquarters' reviews, in an effort to identify th.e unwritten
    policies, procedures, and criteria FEMA follows in making recom-
    mendations to the President. Regional records pertinent to our
    review were contained in FEMA's headquarters' files. We provided
    written questions to FEMA on a number of its reviews of Governors'
    requests and obtained written.responses for most of them.

    In an effort to better understand the decisionmaking process,
    we.did a statistical and computer analysis of the quantifiable
    ,data on 96 of the 102 major disaster requests that were declared
    and denied in fiscal years 1979 and 1980. We made correlation
    analyses to identify those disaster factors which had the most
    influence on the final decision. we determined averages for sig-
    nificant factors such as numbers of people injured, homes damaged,
    estimated eligible costs, and others. We made numerous multiple
    regression analyses to identify those declarations and.denials
    which did not conform with the majority of-these decisions.
    Appendix II describes our method and analyses in more detail.

    6

    I

    CHAPTER 2

    OPPORTUNITIES TO IMPROVE DATA GATHiERING

    AND DISASTER ASSESSMENTS

    Federal assistance is supplementary in nature and to be
    provided only when the severity and magnitude of the incident is
    beyond the capabilities of the State and affected local govern-
    ments to effectively respond. It is to be given only when the
    States have committed a reasonable amount of their funds to al-
    l1eviate the damage, loss, hardship, and suffering resulting from
    the incident.

    Assessing the severity and-magnitude of disasters and evalu-
    ating the need for Federal assistance quickly is a difficult task
    which involves making decisions with incomplete information. FEMA
    .decisions are consistent where the severity and magnitude of dis-
    asters is concerned., But its decisions are not as consistent when
    evaluating data related to States' and local governments' capa-
    bilities and ~their. commitments to handle the disaster. (See ch.
    3.)

    Standard forms and computer models, such as those developed
    by GAO, would improve FEMA's ability to gather data and assess
    the need for Federal assistance.

    ASSESSING NEED FOR

    FEDERAL_ASSISTANCE

    It was the Congress' intent to provide supplemental assis-
    tance to State and local governments to help (1) alleviate the
    damage, loss, hardship, or-suffering caused by a major disaster,
    (2) save lives and protect property and public health, and (3)
    maintain safety in the event of an emergency..

    FEMA's internal guidelines state that the Disaster Relief
    Act, prior disaster legislation, legislative history, and ex-
    perience all provide some direc.tion but do not define the param-
    eters of a major~ disaster. A principal component in FEMAI's
    assessment is a determination that a disaster is of such severity
    and magnitude that effective response is beyond the capabilities
    of State and local governments and that Federal assistance,
    authorized by the act or by other Federal programs triggered by
    ~the act, is required.

    A key problem for FEMA. is measuring severity and magnitude.
    For evaluation purposes, FEMA's objective is to quantify it in
    terms of damages and1losses, which are further related to specific
    actions required to alleviate hardship and suffering. FEMA per-
    sonnel.were advised to measure severity and magnitude by consid-
    ering (1) what the"State, local governments, and individuals will
    have'to do if a declaration is made and (2) what the impact will
    be on the State, local governments, and individuals if a major
    disaster is not declared.
    7

    FEMA's ultimate objective is to determine the "unmet needs"
    for which the Federal Government can provide assistance and the
    impact which the disaster has on those affected by it. FEMA sees
    each disaster as being unique and, therefore, needing to be
    evaluated on its own merits.
    PROBLEMS IN REVIEWINGI

    A Governor's request to the President for a major disaster
    or emergency declaration is sent to the appropriate FEMA Regional
    Director. This request contains,' among other things,.the State'-s
    assessment of damages and losses and the actions being taken to
    overcome them. Regional personnel visit the scene of the incident
    to make a first-hand evaluation of the damage. Based on this
    review, the Regional Director makes a recommendation to FEMA head-
    quarters and the FEMA Director recommends a course of,action to
    the President.

    For reporting to headquarters, FEMA has developed a regional
    disaster/emergency summary for the gathering of data about the
    incident and a separate regional analysis and, recommendation for
    opinions and evaluations. The summary provides information on
    the date and type of request and locations and probable incident
    period and an assessment of severity, magnitude, and response
    capabilities of State and local governments and private organiza-
    tions. The assessment section includes such factors as numbers
    of casualties (dead and injured), number of homes damaged and
    destroyed, numbers and types of businesses and farms affected and
    related damage estimates, and impact on public facilities. These
    reports are reviewed by headquarters personnel in DR&R.

    To better understand the damage assessment and evaluation
    process performed by FEMA, we selected a sample of requests that
    resulted-in 24 major disaster declarations, 8 emergency declara-
    tions, and 9 denials. We made a detailed review of the requests
    and analyses of the facts, conclusions, and recommendations
    contained in FEMA's reports.

    We found it difficult to evaluate the decisions on individual
    requests or on different requests which appeared to us to be sim-
    ilar in size, scope, time, or other circumstances. Each request
    had different circumstances,,although the basic types of informa-
    tion were similar. Governors' letters presented the information
    in a variety of ways. many regional disaster assessments did not
    always present the informatio.n in a logical, uniform manner, and
    subjective opinions and conclusions were made on an overall basis
    without specific reference to the data on which they were based.

    Many cases that we reviewed resulted in questions for which
    we could not find answers in the files. We requested in writing,
    that FEMA supply written replies to our questions. Those which
    FEMA did answer or explain were based on opinions, recollections,
    and undocumented information which welcould not verify. The,
    results of our analyses of individual requests are discussed on
    pages 23 to 31.
    8

    I

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    1.

    I
    STATISTICAL ANALYSIS INDICATES
    CONSISTENCY IN FEMA DECISIONS

    Because of the difficulties we encountered in reviewing
    requests, we Undertook a detailed statistical analysis of more
    cases in an effort to discover the bases for FEMA's decisions in
    granting or denying assistance-and to determine whether a more
    objective approach could be taken in making disaster assessments.
    If we could identify FEMA's criteria, we also wanted to evaluate
    the extent they were consistently applied.

    Method used

    We selected 96 major disaster requests received in fiscal
    years 1979 and 1980 as our data base. I/ We identified about 30
    factors for these cases, such as number of people killed and in-
    jured; number of homes damaged.and destroyed; and the dollar value
    of homes, businesses, and farms damaged and destroyed. Data on
    some of these factors was ofteni not available or was ambiguous
    so we had to interpret some of the data. For example, when no
    information existed-on the number of people injured or homes des-
    troyed, we assumed none were. On the other hand, some obviously
    large disasters had no data on the.dollar estimate of eligible
    costs. For this type of missing data, we used recent FEMA cost
    estimates. in addition to data from the files, we also used
    published preliminary 1979 data on per capita income and State
    operating funds as indicators of the State's capability to handle
    the disaster on its own.

    We were unab le to identify data on many individual factors
    in enough cases to use in our analyses. Miany cases, for example,
    did not provide estimates of the cost of business damage or the
    cost of agriculture damage so we could not use them. As a result,
    we were limited to using the estimat-ed cost of total damage and
    the other factors discussed in this report. See appendix II for
    more information on the data base and how we handled the problem
    of missing data.

    Two methods were used to.analyze the relationship between
    FEMA's decisions and the factors identified for the disasters.
    First, we attempted to identify differences between declared
    and denied decisions in terms of different individual factors.
    Second, we used more sophisticated statistical techniques to
    develop models of the relationship between several factors
    working in combination with FEMA's decisions. These are proba-
    bility models that can identify past decisions that were not con-
    sistent with the majority of the decisions made and can predict
    how FEMA would decide a current request based on past decisions.
    See appendix II for more details on these models.

    I/During the period, a total of 102 major disaster requests were
    received.. To preclude duplication in our analyses, we excluded
    six requests for reconsideration of denials because they con-
    tained no new information.
    9

    I
    Factors influencing
    FEMA decisions
    Factors relating to disaster severity and magnitude, such as
    the total estimated cost of eligible assistance, number of people
    injured, and type of request, seem to influence FEMA's decisions.
    The impact on FEMA decisions of other factors, such as States'
    capability and commitment, are not as clear.
    Estimated cost of
    eligible assistance
    The higher the estimate of eligible costs, the greater the
    chance of a request being granted. The average cost in 96 appli-
    cations was $7.2 million, ranging from about $100,000 to $177.5
    million. The average cost in declared disasters was $9.83 million,
    while it was only $1.12 million in denied disaster requests.
    Table 1 shows the distribution of estimated eligible cost
    by type of decision. For example, only 45 percent of the re-
    quests involving up to $1 million were declared, while 100 per-
    cent of the requests for $5 million or more were declared.
    Table 1

    Requested             Decision	Percent of total
    amount     Declared    Denied    Total	Declared    Denied
    (millions)
    $0-.9 13	16	29	45	55
    1-1.9	9	7	16	56	44
    2-2.9	8	4	12	67	33
    3-4.9	13	2	15	87	13
    5-8.9	10	0	10	100	0
    9 and above	14	0.	14	100	0
    Total	67	29	96
    FEMA's Director contends that we are not entirely correct in
    stating that the higher the estimate of eligible costs the greater
    the chance of a request being granted. He said that the statement
    would generally be true for the same State and type of catastrophe
    and under similar circumstances.
    FEMA suggests that we take more directly into account the
    influences of several factors working in combination with each
    other. It is true that table 1 analyzes only the influence of
    estimated cost of eligible assistance. However, when we used
    more sophisticated models to determine the relationship between
    several factors working in combination with FEMA's decisions
    (see p. 15.), the result was that the estimated cost of eligible
    assistance still had a significant influence on the decision to
    declare or deny a major disaster request.
    10

    Number of people injured

    Generally, the more people injured, the greater the chance
    of a disaster being declared. The average number of people in-
    jured for all requests was 27, 37 for declared requests, and 1
    for denied requests.

    Table 2 shows the distribution by number of people injured.
    There were 51 requests that did not report any injuries, 57 per-
    cent of these were declared. On the other hand, all requests
    reporting 50 or more injured were declared.
    Table 2

    6

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    Number
    of people
    inj ured
    0
    1-49
    50-99
    100-199
    200 and
    above
    Total
    Decision
    Declared    Denied
    Percent of total
    Declared    Denied
    Total
    51
    30
    8
    5
    2
    29
    23
    8
    5
    2
    67
    22
    7
    0
    0
    0
    29
    57
    77
    100
    100
    43
    23
    0
    0
    100
    0
    96
    Homes damaged
    The decision is not affected when the number of homes damaged
    (major damage, minor damage, or completely destroyed) is less than
    200. However, a disaster is more apt to be declared if the number
    of homes damaged is greater than 200. Table 3 shows the distri-
    bution of homes damaged by type of decision.

    Table 3
    Percent of total
    Declared    Denied
    Number of
    homes
    Decision
    Denied
    Total
    Declared
    0
    . 1-49
    50-199
    20 0-799
    800 and
    above
    11
    6
    7
    21
    22
    12
    6
    8
    3
    0
    29
    23
    12
    15
    24
    22
    96
    48
    50
    47
    88
    52
    50
    53
    12
    100
    0
    Total        67
    11

    Type of request
    The chance of a request being declared or denied is closely
    related to the type of assistance requested--individual assis-
    tance, public assistance, or both. Requests for both types of
    assistance have the greatest chance of being declared, while re-
    quests fo r only public assistance have the least chance of being
    declared. Requests for only individual or only public assistance
    received only the kind of assistance requested. Requests for
    both types of assistance received either both or individual
    assistance only, but seldom received public assistance only.
    Table 4 shows the distribution of type of assistance requested
    by type of decision.

    Table 4

    Type of
    assistance	Decision	Percent of total
    requested      Declared	Denied - Total	Declared    Denied
    Individual         3	5     a	38	62
    Public       I	11	12	8	92
    Both            A/63	13	76	83	17
    Total       67	29	96	70	30
    a/Of the 63 declarations that requested both types of assistance,
    22 were declared for individual assistance only, 3 were de-
    clared for public assistance only, and 38 were declared for
    both individual and public assistance.

    state cajpabilitv

    We used State general operating funds and per capita income
    as measures or indicators of a State's capability to financially
    handle its disaster. We expected the chance of a major disaster
    declaration to be greater for those States where these indicators
    of capability were smaller. However, we found little difference
    between average State operating funds and FEMA's decision to
    declare or deny disasters.

    Table 5 shows the distribution of%requests from States
    according to their per capita income'. Nothing clearly indicates
    how per capita income.influenced FEMA decisions. States in the
    lowest per capita income category had a greater chance of their
    request being approved than States with the highest income. But,
    for the bulk of requests from States in the midranges, increases
    in per capita income slightly increased the chances of approval.
    12

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    Table 5

    per capita            Decision	___Percent of total
    income    Declared   ]Denied	Total        Declared    Denied
    (thousands)
    ~$1-4.9	3	0	3	10 0	0
    5-6.9	10	5	15	67	33
    7-7.9	15	6	21	71	29
    8-8.9	24	9	33	73	27
    .9 and above	15	9	24	63	37
    Total	67	29	96

    State commitment
    We looked at two indicators of a State's commitment to
    disaster assistance.  One measure was the amount of State and
    local government funds the Governor said would be committed
    to the disaster. The other was whether the Gove'rnor properly
    certified that these funds would be available. We found little,
    if any, difference between the averages for these factors for
    declared or denied disaster request.s.

    Table 6 shows the distribution of requests by commitment
    statements and by type of decision. There were 63 requests
    from States whose Governors did make the required commitment
    statement and 33 requests from States whose Governors did not
    make the required comnmitment statement. Equal percentages of
    t-hese requests were declared. This indicates that the presence
    or absence of a commitment statement had no definite impact on
    the final decision.
    Table 6

    Made
    commitmeint           Decision	Percent of total
    statement   Declared    Denied    Total	Declared    Denied

    Yes	44	19	63	70	30
    No	23	10	33	70	30
    Total	67	29	96

    FEMA's Director noted that for some disasters in the past,
    a declaration was made with the expectation of working out the
    specific State commitment and including it in the Federal-State
    agreement. However, he said these instances were rare and gen-
    erally limited to situations where immediate Federal assistance
    was required.

    13

    t
    FEMA's comment implies that our use of Governors' letters
    as a basis for our analysis may have resulted in our overlooking
    some State commitments. Our analysis was based on whether the
    Governor fulfilled the statutory predeclarat!on requirement and
    cextified as to State and local government commitments. If we
    included those commitments made after-the-fact in our analysis,
    the results should not change significantly because, as FEMA
    indicates, the number of'instances was rare.

    Time period
    The relationship between when the decision was made and the
    type of decision is not entirely clear. Figure 2 shows the num-
    ber of disasters declared and denied for each quarter of fiscal
    years 1979 and 1980. Toward the end of fiscal year 1979 decla-
    rations increased, perhaps indicating more severe weather con-
    ditions or a more liberal administration policy. Denials in-
    creased thereafter, perhaps indicating less severe weather con-
    ditions, a shortage of Federal funds, or a more conservative
    administration policy.
    In our regression analyses, time was used as a proxy for
    inflation. See discussion in appendix II, page 47.

    FIGURE 2

    MAJOR DISASTER DECLARATIONS REQUESTED, DECLARED, AND DENIED

    20 -

    19 -

    18 -

    17- --
    167-         -                          REQUESTED
    16 -

    15-
    14 .
    LU
    13          1

    12-

    10-                       /\~~~~~~~~~~~~DECLARED
    10-
    09-       1
    /I                        /..-

    6       I
    5-~~~~~~~~~. DE.lE
    12/78   ' 3/79 6/79                   9/79         12/79         3/80         6/80         9180
    TIME PERIOD
    14

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    i
    Political influence
    We performed a.limited analysis of the relationship between
    the decision and the political party i n power in each affected
    area. We.compared the political parties of the Governors, Sen-
    ator's, and'Representatives of the affected areas with the deci-
    sions to declare and deny disaster requests.

    Except for State Governors, we could find little, if any,
    indication that political factors influenced the outcome. Table
    7 shows the distribution of the Governors' political affiliation
    by type of decision. on the surface it looks like the opposition
    (Republican) party had a better chance of having its requests
    granted.
    Table 7

    Governors'
    political	Decision	Percent of total
    affiliation        Declared	Denied   Total	Declared   Denied

    Democrat	'41	23	64	64	36
    Republican	22	6	28	79	21
    Other or missing	4	0	4	100	0

    Total	67	29	96

    Influence of combining factors

    The analysis up to this point has looked at the impact of
    each factor individually. In practice, FEMA subjectively eval-
    uates each request on the basis of combinations of factors. To
    eval'uate this combined effect, we used a statistical technique
    called regression analysis.

    Using data from 96 requests and regression analyses, we de-
    veloped mathematical models that estimate the relationship between
    the decision and various combinations of factors,.such as people
    injured, homes damaged, and State per capita income. The models
    can also be used to assist in the evaluation of new requests.
    New information could be entered into the formula, and it could
    then be used to predict the probability of the request being
    granted. Additional nonquantifiable data could then be used to
    make the final decision. (See app. II.)

    We developed six different models using different combina-
    tions of factors, as shown in table 8. Some models appear to
    have better predictive power than others, as noted by the per-
    centage of decisions that the model agreed with the FEMA decision.
    in general, the models support the inferences one would draw from
    the previous tables. The models indicate that the estimated
    eligible cost in dollars, in combination with numbet of homes
    damaged and,number of peop,le injured, are positively associated
    with the decisions. The higher their values the greater the
    chance a request will be approved. Requests for combination of
    I1
    5

    both individual and public assistance have the best chance of
    being declared. Month of decision and per capita income are
    negatively associated with FEMA's decisions. For example, as per
    capita income increases, the chance of a request being approved
    decreases. Also, there appears to be little, if any, relationship
    between State commitment and the decision.
    Table 8
    Variables Used in
    Regression Models
    Model Number
    1        2      3       4
    5
    6
    Variables:
    Type of assistance
    requested
    x
    x     x     x
    x
    Estimated eligible
    cost
    x    x    x    x    x    x
    Number of people
    injured
    x
    x    x     x    x
    x
    x    x    x
    Number of homes
    damaged
    x    x     x
    State per capita
    income
    Decision month
    State commitment

    Interaction term with
    several variables
    Number of cases used
    x    x    x    x    x    x
    x
    x    x
    x
    x
    x    x
    x	x

    96	96   96 a/87 b/67 c/20
    Percent of cases
    agreeing with FEMA
    decision
    85    86    83    83    81    95
    a/Deleted nine very large disasters with missing values for
    selected variables.
    b/Includes only requests for both individual and public assistance
    and deletion of nine large disasters.

    c/Includes only requests for individual or for public assistance.
    16

    The models were useful in providing insights about FEMA's
    implicit decision criteria and the extent that FEMA applied the
    criteria consistently.
    Since FEMA seems to be more willing to grant certain types
    of assistance than others, we tried to capture this additional
    factor in other statistical models. These models focused pri-
    marily on the type of assistance granted and were also used to
    identify cases where FEMA may have made inconsistent decisions.
    The six original models plus these additional models iden-
    tified 20 decisions where FEMA may have applied the criteria
    inconsistently. FEMA approved seven requests which our analyses
    predicted would have normally been denied. Conversely, FEMA
    denied 13 requests which our analyses predicted would have
    normally been declared. Part of the reason for these differences
    could be due to the limitations of our analyses or the data used.

    our further analysis of the quantifiable data related to
    these 20 decisions disclosed 8 decisions which were very incon-
    sistent with the majority of FEMA's decisions. Table 9 lists
    these decisions and c.ompares the values of key indicators for
    each type of assistance granted or denied.. The first five re-
    quests which were declared generally had less than average values
    for three key indicators of disaster magnitude--estimated eli-
    gible costs, homes destroyed, and people,,injured. In three of
    these requests, the per-capita income--an indicator of financial
    capability--is higher than the average. FEMA also denied three
    requests for which the estimated eligible costs, homes damaged,
    and people injured were generally higher than the average. Only
    one of the denials had per capita income higher than the average.

    We cannot judge whether FEMA made improper decisions in any
    of the requests. Our review of the records for the 20 decisions
    with which out models disagreed disclosed a variety of subjective
    reasons for FEMA's'final decisions. While many FEMA decisions
    appeared to be proper, some were not as clearcut because each
    decision was based upon various criteria that were not uniformly
    applied. One request for public assistance, for example, was
    granted because the disaster had weakened State and local fiscal
    resources so that it lacked the ability to respond to other
    emergencies in the foreseeable future. While we do not question
    the validity of this particular declaration, we did note that
    such forward thinking was not applied to any of the other requests
    that we reviewed.
    t

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    7

    Table 9
    Inconsistent FEMA Decisions Identified by GAO Model
    Number of homes             Numb
    Estimated eligible cost	damaged and destroyed        people
    Average for	For this	Average for	For this	Average
    fc
    this type	decision	this type	decision	this type
    ..... (millions)-------
    $ 5.90	$	.61	483	40	13
    5.90	4.86	483	555	13
    3.98	.44	1,092	450	22
    14.09	2.00	858	312	50
    5.90	10.80	483	0	13
    1.12	1.35	73	334	1
    1.12	1.43	73	251	1
    1.12	1.67	73	93	1

    bfr of
    injured
    or For this
    e   decision

    4
    0
    0
    0
    0
    3
    0
    3
    Type of
    assistance
    Decision granted or
    number	denied

    3	Public
    6	Public
    9	Individual
    23	Both
    24	Public
    27	Denied
    30	Denied
    46	Denied

    I
    Per capita
    Average for
    this type

    $7,775
    7,775
    8,105
    7,728
    7,775
    8,227
    8,227
    8,227
    income
    For this
    decision

    $5,000
    9,353
    7,477
    8,775
    9,269
    9,055
    7,185
    8,226
    ao
    .---                         wwwwow   -  -                                                                                 -   - -         --   -            - I - - ---

    CONCLUS IONS
    In assessing the impact of a disaster, FEMA seeks to quantify
    severity and magnitude in terms of losses and damage, determine
    what resources are available from others to cover the losses and
    damage, and arrive at the unmet needs which would be eligible
    for assistance from FEMA. If the unmet needs are causing undue
    hardship and suffering to individuals or governments, a disaster
    declaration is warranted.

    For the most part, FEMA is consistent in determining the
    severity and magnitude of a disaster, even though it does not
    always have complete information documented in a uniform manner.
    Complete information on damages and losses is understandably
    difficult to obtain because of the nature of the circumstances
    under which they are obtained. on the other hand, some of the
    missing information may have been overlooked or ignored. The
    lack of uniformity in Governors' letters and regional damage
    assessments contribute to such a problem.

    The best means for FEMA to assure that it receives all the
    available information in the shortest possible time is to develop
    ,a uniform format to supplement the information now provided by
    State and local governments and regional offices and require that
    they be used consistently. This uniform format could include
    provisions for all the specific damage and loss data which FEMA
    needs. Since estimated eligible costs seem to be strongly as-
    sociated with the decision, these estimates should be given par-
    ticular attention. Also, the formats could provide for Governors
    to support their statements on capability and commitment.

    With more complete and uniform information, FEMA could de-
    velop computer models such as those we developed in this review.
    This tool would.be useful as a.guide to future decisionmaking and
    serve as a record for management evaluation.

    RECOMMENDATIONS

    We recommend that the Director, FEMA:

    --Develop comprehensive, uniform forms to be used by
    Govetnors when submitting their requests and by regional
    offices when performing damage assessments.
    --Use computer models, such as those developed by GAO, as
    a tool for program decisionmaking and evaluation.

    AGENCY COMMENTS AND OUR EVALUATION

    The Director, FEMA, informed us that FEMA would consider
    developing comprehensive, uniform damage assessment forms during
    its current revision of.the regulation relating to the declara-
    tion process. Shortly afte-r receipt of the Director's comments,
    FEMA established a plan for considering this recommendation which
    it expects to complete by July 1, 1982. We have no basis for
    19

    evaluating the Director's response to our recommendations and the
    FEMA plan until the regulation has actually been issued.
    The Director did not agree to use computer models as a tool
    for program decisionmaking and evaluation. He said that the use
    of a computer model may have some merit in the evaluation of
    certain aspects of the Disaster Relief Program, but that its use
    in decisionmaking with regard to disaster requests is severely
    limited. He said there is no proper way to quantify key factors
    such as hardship, suffering, and impact for use in a decision-
    making computer model. Subsequent to this reply, FEMA decided
    to have a consultant review its computer applications and recom-
    mend appropriate changes. It expects to complete this action by
    October 1, 1982.

    We do not suggest that the use of computers models would
    supplant the judgment of agency officials in assessing the hard-
    ship and suffering or the impact of a disaster. On the other
    hand, we believe that using computer models can be an extremely
    effective tool for program evaluatibn and management control.
    Each disaster file is handled on an individual, ad hoc basis,
    without formal reference to the circumstances or experiences and
    lessons learned in the evaluation of prior disasters. Consequent-
    ly, program evaluators only consider the factors associated with
    the current incident. Problems discussed throughout this report
    about missing data and the lack of consistency in the quality and
    methodology of disaster assessments indicate a need for more uni-
    formity in disaster evaluations. By using computer models, FEMA
    could develop formulas which would enable it to predict whether
    a current incident would be declared a disaster based on past
    experience. Such information would help FEMA judge the current
    incident. Also, if the data related to the disasters were com-
    puterized, FEMA would have the ability to search its prior dis-
    aster records to identify similar disaster situations and circum-
    stances and enable it to compare the similarities and differences
    before making judgments on a current disaster request. Such
    model analyses and disaster comparisons could be presented to
    the Director, FEMA, for consideration in making a recommendation
    to the President.
    Our use of computer models dealt primarily with the quanti-
    fiable factors associated with the severity and magnitude of
    disasters in an attempt to evaluate FEMA's past decisions and
    identify the implicit criteria used in the decisionmaking proc-
    ess. If FEMA used a similar approach, it may eventually find
    that some of the data it gathers has little influence on its
    decisions or that its decisions seem to be based on other factors
    not included in the computer model. Thus, it could refine its
    data-gathering techniques and more clearly establish the criteria
    it implicitly uses in its decisionmakihg process. These models
    could also be expanded to include information pertaining to the
    capability of State and local governments and their related com-
    mitments. And, as experience is gained, and the usefulness of
    20

    the models increases, some measures of hardship, suffering, and
    impact might eventually be developed.

    Finally, various management reports could be developed for
    the Director, FEMA, and other officials which'would provide them
    with better management control over the operations of the disas-
    ter assistance program office.
    21

    CHAPTER 3

    IMPROVEMENTS SHOULD BE MADE IN EVALUATING

    THE ABILITY OF STATE AND LOCAL GOVERNMENTS

    TO HANDLE MAJOR DISASTERS AND EMERGENCIES

    Improvements in FEMA's evaluation process should be made
    even though it is faced with a difficult task of obtaining ade-
    quate information under the stressful conditions existing in a
    natural disaster. FEMA should obtain certain uniform information
    regarding a disaster to speed up and improve the quality and con-
    sistency of its decisionmaking. Formal guidance to State and
    local governments is minimal. FEMA's published regulations re-
    garding procedures for requesting major disaster or emergency
    assistance essentially restate the law; require little additional
    information; and do not reveal the policies, procedures, and
    practices used by FEMA to evaluate the information.

    FEMA's methods of evaluating State and local governments'
    ability to handle major disasters are not clearly defined and are
    not uniformly followed. FEMA'assesses the severity and magnitude
    of the event, the capability and commitmaent of State and local
    governments, and then makes its recommendation to the President.
    Th'ese assessments vary greatly as to the type, quality, and degree
    of information used to reach the decision. Furthermore, FEMA does
    not document oral information, such as telephone conversations and
    evaluation meetings, which are important inputs to decisionmaking.

    The lack of consistency in the quality and methodology of
    disaster assessments and the lack of knowledge by outsiders as to
    FEMA's methods of evaluation can create doubt as to whether the
    Federal Government is only providing supplemental assistance and
    whether each request is judged in a fair and equitable manner.
    Better advanced planning and the issuance of uniform policies and
    procedures would alleviate the problem.

    LIMITED GUIDANCE FOR
    STATE AND LOCAL GOVERNMENTS

    Numerous Federal programs become available to States when a
    major disaster or an emergency is declared. The Congress did not
    intend for the Federal Government to assume a unilateral role in
    responding to such occurrences. To the contrary, the act's purpose
    is to assist "State and local governments in carrying out their
    responsibilities to alleviate the suffering and damage which result
    from such disasters." (42 U.S.C. 5121(b), (1976 ed.))

    The procedures for obtaining Federal assistance, as outlined
    in the act, are as follows:
    --The Governor of the affected State shall request a major
    disaster or emergency declaration by the President.
    2
    2

    --The Governor's request shall be based on a finding that
    the major disaster or emergency is of such severity and
    magnitude that effective response is beyond the capability
    of the State and the affected local governments.
    --For major disaster requests, the Governor shall also:
    1. Take appropriate action under State law and direct
    execution of the State's emergency plan.
    2. Furnish information on the extent and nature of State
    resources which have been or will be used to alleviate
    the condition of the disaster'.

    3. Certify that for the current disaster, State and local
    government obligations and expenditures will constitute
    the expenditure of a reasonable amount of their funds for
    alleviating the damage, loss, hardship, or suffering re-.
    sulting from such disaster. Additionally, State commit-
    ments must be a significant proportion of the State and
    local government obligations and expenditures.

    --The prior expenditure of funds is not a prerequisite for
    emergency requests, but the Governor is still required to:

    1. Furnish information describing State and local efforts
    and resources which have been or will be used to alleviate
    the emergency.

    2. 'Define the type and extent of Federal aid required.
    For major disasters, FEMA's regulations require that Gover-
    nors' requests include (1) an estimate of the amount and severity
    of the damage, broken down by type, such as private nonag.ricul-
    tural, agricultural? and,public, (2) a statement of actions
    pending or taken by the State and local legislative and governing
    authorities with regard to the disaster, (3) a certification as
    to the amount of State and local government expenditures and ob-
    ligations that will be used which will not require Federal reim-
    bursement, (4) an estimate of the extent and nature of Federal
    assistance and funds needed for each disaster-affected area, and
    (5) other appropriate justifications in support of the request.
    For emergency requests, the Governor is required to describe
    the State and local efforts and resources which have been or will
    be used fot which no Federal funding will be requested. The re-
    quest must also define the particular type and specific extent
    of Federal aid required.
    The Governor of the affected State is responsible for com-
    plying with these provisions of the law and implementing regula-
    tions. Likewise,' FEMA is responsible for obtaining sufficient,
    physical and financial information so that it can make an informed
    recommendation to the President. Unfortunately, FEMA's regula-
    tions do little to clarify and explain the law not do they
    23

    provide information to Governors as to the factors FEMA uses and
    considers when it evalua-tes the States', capabilities and commit-
    ments. Consequently, Governors are unable to predict the outcome
    of their requests with any degree of certainty. This is partly
    evidenced by the fact that 64 Governors' requests, or 42 percent,
    have been denied since the beginning of fiscal year 1979.
    EVALUATION OF THE CAPABILITY AND
    COMMITMENT OF STATE AND LOCAL
    GOVERNMENTS NOT CONCLUSIVE
    By law, Federal disaster assistance is intended to be supple-
    mentary in nature. it should be provided only when the severity
    and magnitude of a major disaster or emergency is beyond the capa-
    bilities of the State and affected local governments to effec-
    tively respond and when they have committed, for major disasters,
    a "reasonable" amount of their funds to alleviate the damage,
    loss, hardship, or suffering. Capclbility is a crucial determinant
    because many States may be abl-e to respond to very severe disas-
    ters, whereas other States may not be able to respond to lesser
    disasters.  Capability can al so be a crucial determinant in
    judging the reasonableness of the dollar value of commitments
    which State and local governments are required.to make..
    The bases for, and supporting documentation of, FEMA's deter-
    minations of State and local capability and the reasonableness
    of their commitments are often not conclusive. FEMA does not
    require strict adherence to the requirements of the act and it
    does not require complete and uniform information fot measuring
    capability or for determining the reasonableness of commitments.
    The type and quantity of information obtained on capability and
    commitment varies from request to request and, thus, leads to
    considering different information for decisionmaking.
    FEMA does not always require Governors
    to comply with legal requirements
    The act requires Governors to follow certain specified
    procedures as a prerequisite to obtaining Federal disaster assis-
    tance. These procedures were established to ensure that Federal
    assistance was supplementary to State and local disaster assis-
    tance and that States were making good faith efforts to do what
    they could to alleviate the damage, loss, hardship, and suffering.
    Governors in many cases are not providing sufficient information,
    and FEMA is not requiring such information to make basic deter-
    minations relating to capability and commitment.
    Our analysis of 96 major disaster requests in fiscal years
    1979 and 1980 disclosed that almost one-half of the requests did
    not contain (1) the required statement of finding by the Goverhor
    thAt the disaster was of such severity and magnitude that it was
    beyond the capability of State and local governments, (2) a cer-
    tification by the Governor that State and local commitments were
    .a reasonable amount of available funds, or (3) either statement.
    The requests granted and denied are as follows:
    24

    Governor did not make required statement
    Beyond	Reasonable	Both
    capability	commitment	missing    Total

    Major disasters
    granted
    Fiscal year
    1980                4              6            1         11
    Fiscal year
    1979	6	-8	6	20
    Total	10	14	7	31
    Major disasters
    denied
    Fiscal year
    1980                3              2            7         12
    Fiscal year
    1979	1	1	0	2

    Total	4	3	7	14

    Total	14	17	14	45

    Our computer analysis as to the importance of the presence
    or absence of-these statements revealed that they did not have a
    significant influence on FEMA's final decision. This was further
    supported by our indepth review of 31 major disaster declarations
    and denials, 8 of which lacked a capability statement and 5 of
    which lacked a commitment statement.
    Capability
    These requests usually contained no comments whatsoever
    regarding State and local capability or they only emphasized the
    need for Federal assistance. For example, in one request that
    was approved, the Governor said "It is my judgment that Federal
    assistance is necessary to supplement the State and local efforts

    FEMA officials told us that the fact that State and local
    governments could not adequately respond to the situation was im-
    plicit in the Governor's statement. FEMA told us that although
    the Governor did not employ the precise wording of the law, his
    request certainly evinced an understanding of the spirit of law
    and legislative intent.
    25

    in another request, the Governor said:
    "In my judgment, Federal assistance is necessary to
    effectively alleviate the conditions caused by the
    disaster. Legislative bodies of the affected areas
    (4 counties) are considering all ways of coping with
    the financial problems involved."

    The Governor made no statement whatsoever regarding State
    capability, although it is one of the most affluent States in
    the Nation. In this case, FEMA concluded that one county did
    not have the capability to handle the disaster and it was granted
    Federal assistance. FEMA told us that, based on telephone con-
    versations between headquarters and the region, it determined
    the State would not be able to provide an effective response to
    the unmet needs in~ one of the four counties involved, but the
    rationale for this decision was not documented.

    An Assistant General Counsel, FEMA, said it was impermisi-
    sible to declare a major disaster if the Governor does not certify
    that the situation is beyond the caLbabilities of the State and
    local governments.

    Commitment

    In these requests the Governors generally described State
    and local efforts being made and actions being taken to alleviate
    the disaster situation. And, even when a dollar commitment was
    mentioned, the Governors did not always certify that it was a
    reasonable amount of available State and local government funds.
    For example, one Governor said that 200 State employees and nu-
    merous crews from the county, the district, and contractors were
    working on the disaster and that certification of expenses in-
    curred for this disaster would be transmitted as soon as possible.
    FEMA's regional office reported that the State legislature had
    recently enacted the fiscal year budget without providing funds
    for disaster assistance and that the State's expenditures had
    been insignificant. The required certification by the Governor
    was not in FEMA's files so we asked FEMA to explain the bases
    for recommending this major disaster request which was declared.
    FEMA told us that its
    If* * * declaration letter stipulated 75/25 cost
    sharing of eligible public assistance and this
    was considered an adequate commitment on the part
    of the State and local governments."

    State commitments must be
    significantly proportional

    The act requires that State commitments be a significant
    proportion of State and local government obligations and expendi-
    tures. FEMA cannot possibly determine whether State commitments
    are significantly proportional when commitments (1) are only
    26

    described as significant, (2) do not specify obligations and
    expenditures of local governments, or (3) include a total amount
    not identified to either the State or local government. For
    example, one Governor who requested Federal assistance only cer-
    tified that State and local governments would make reasonable
    expenditures and obligations consisting of State and local efforts
    for public safety, rescuer removal of debris, and the State's
    share of the individual and family grant program. He included no
    dollar estimates for these expenditures.
    Regarding this Governor's certification, the FEMA region
    reported that it had requested additional information estimating
    the monetary value of State assistance. The region said this
    information was not available from the State at that time ande
    if required by headquarters, it would be provided later. How-
    ever, based on its inspection and past experience with State
    operations, the region concluded that the State would continue
    to provide all available State'resources in recovery operations.
    Federal assistance was provided even though FEMA did not have
    the required information on State and local commitments.

    One year later *this same Governor made similar statements
    regarding State and local government commitments for another
    disaster without specifying details on the commitment. FEMA
    estimated that this commitment would amount to $115,000 based
    on the estimated cost for debris removal and emergency protec-
    tive measures. Although FEMA did not determine the proportion of
    State and local government commitments, Federal assistance was
    granted.

    The Director said that corrective action has been taken and
    that FEMA is insisting that legal requirements are complied with
    when a request is made. In this regard, the weekly Director's
    Memorandum dated February 27, 1981, issued to headquarters and
    regional personnel, contained the following policy statement:

    "I. On receipt of requests from Governors for
    Presidential declarations under PL 93-288, care-
    fully review the requests to ascertain that the
    request complied with the requirement for certain
    essential elements of information such as State
    and local commitment or implementation of the
    State emergency plan (for major disasters). Where
    such required actions are not included in the
    request, it should be noted in the acknowledgement
    to the Governor and the State advised to furnish
    the information in order to preclude a delay in
    processing."
    This matter will also be considered when FEMA revises its
    regulation on the Declaration Process.
    27

    Analysis and evaluation of
    capability and commitment
    data is inadequate'

    FEMA does not use the same type of information for (1)
    measuring the capability of State and local governments.and (2)
    assessing the reasonableness of their commitments. Each request
    is analyzed and evaluated on diffLerent bases and, thus, there is
    no assurance that each major disaster and emergency request is
    considered in a fair and equitable manner. We recognize the need
    for FEMA to act quickly when a disaster occurs. However, this
    situation could be remedied if FEMA makes States aware in advance
    of the kinds of information it needs to perform complete and uni-
    form evaluations and consistently requires the States to provide
    the informiation.

    Governors generally provide much of the information required
    by the law and regulation, but they do not provide much of the
    information FEMA uses in its evaluation. They usually describe
    State and local efforts by identifying the various departments and
    agencies whose personnel'and equipment have been used to respond
    to the incident and assist individuals, evacuate citizens, remove
    debris, and perform emergency'protective measures. These efforts
    are known as."soft match," since the salary and equipment costs
    would normally not have exceeded the cost of regular operations.
    Soft match is not usually quantified in terms of dollars spent.
    Governors usually identify the type of State and local work which
    has been done or will be done and the amount of funds spent or to
    be spent for which no Federal reimbursement will be requested.

    Some Governors also voluntarily provide additional informa-
    tion regarding State and local financial conditions, general
    economy of the affected area, and prior disaster history.

    Although FEMA believes each disaster request must be
    subjectively evaluated on its own merit, it did develop an inter-
    nal paper in 1975 on the "Logic of Evaluating Requests for Dec-
    laration of a Major Disaster." To measure capability, FEMA's
    objective is to determine what State and local governments can do
    or have the ability to do. The paper suggests considering a
    States' (1) authority to spend funds, (2) financial conditions,
    (3) general economy--income, unemployment, etc., and (4) prior
    disaster history. The paper also suggests considering location
    and concentration of damage. To evaluate the reasonableness of
    commitments, FEMA's objective is to determine whether the State
    and local government response is commensurate with the severity,
    and magnitude of the incident and whether the State is playing
    an important role in the recovery effort. In this regard, the
    paper suggests considering (1) general economy, (2) impact of the
    incident on fiscal outlays, (3) fiscal outlays in recently de-
    clared and non-declared disasters, (4) authority to spend funds,
    (5) debt and borrowing limitations, and (6) bottom line or forced
    contr ibution,.
    28

    In June 1981, headquarters advised the regions that their
    damnage assessments were not uniform. Regions were instructed to
    review the "Logic" paper for guidance and were offered copies of
    the paper if it were not available in the regions.
    We used these guidelines to determine the type and quantity
    of information FEMA actually uses to arrive at its decisions.
    FEMA uses the Governor's request and obtains whatever additional
    information that is readily available to make a decision. The
    Director informed us that for marginal cases, the FEMA national
    office requests additional information which may require field
    trips and.research. Nevertheless, the following schedule shows
    the type.of information FEMA considered in the 31 disaster
    requests we reviewed.

    Requests
    Information   information
    Type of information	Provided by	added by
    considered	Governors	FEMA	Total

    Prior disaster history	14	10	24
    General economy	9	12	21
    Fiscal outlays in
    recent disasters	13	7	20
    Authority to spend'funds	6	9	15
    Financial condition	7	7	14
    Impact of disaster
    on fiscal outlays	6	6	12
    Surplus	0	7	7-
    Ability to spend funds	4	0	4
    Debt and borrowing
    capacity                           0             1           1
    Note:  FEMA declared 24 and denied 7 of these disaster requests.
    The weight or influence which these factors have on FEMA's
    subjective decisions are impossible to determine. in some re-
    quests FEMA considered information on only one factor and in other
    requests FEMA considered information on several factors.

    We believe that if FEMA is to evaluate requests on a fair
    and equitable basisF it must obtain the same type of information
    in every case and uniformly evaluate them. FEMA's decisions for
    declarations or denials may have been different if additional
    information factors had been considered in individual cases. For
    example, in one case FEMA based a denial, in part, on the fact
    that the State and local governments had debt and borrowing
    capacity. Had this factor been Uniformly considered in all re-
    quests, other FEMA declarations might have been denials.

    The financial conditions of States vary, with many States
    having large surpluses. Few Governors provide information on
    surplus funds in their requests. if they do, they usually advise
    that they do not have the authority to spend surplus funds for
    disaster relief. Some States also advise that they have no
    I
    29

    I
    authority or programs to aid their own citizens or their local
    governments. FEMA provides Federal assistance -to States not
    having the authority to spend surplus funds or provide other
    assistance.
    For example, FEMA denied a major disaster request because
    the State and at least one of the two affected counties had large
    surplus balances. The Governor protested FEMA's decision. He
    explained that he did not have the authority to spend surplus
    funds without approval from the State legislature. FEMA then
    recommended and the President declared an emergency and Federal
    assistance was provided. A week later the State legislature,was
    to convene and could have authorized State assistance.

    Surplus does not appear to be a valid and reliable measure
    of State capability since FEMA does not know whether i t is acces-
    sible. Nevertheless, if State surplus is a factor considered by
    FEMA in reaching its subjective decision, then FEMA should uni-
    formly consider this factot for all requests.

    FEMA denies Federal assistance to States when it determines
    the request is primarily for "budgetary relief." In these re-
    quests, FEMA generally finds that much of the damage has already
    been repaired and that Federal assistance would essentially re-
    'place budgeted funds spent. Whether these budgeted funds had
    been earmarked for other essential public services that were fore-
    gone is not considered. Had the State and local government not
    proceeded and made the repairs, they would have had an unmet need
    and Federal assistance may have been provided. Such a practice
    penalizes those who take care of their needs in anticipation of
    Federal assistance. If this.practice is valid, it should become
    a formal policy and made known to all States.

    FEMA may deny part of a request for Federal disaster assis-
    tance if it believes the State or local government commitment is
    inadequate. For example, one Governor identified six departments
    of the State that had committed personnel and some equipment.. He
    said,
    "State and local efforts in response to this disaster
    have been and are presently continuing to be signifi-
    cant in the areas of debris removal, damage assessment,
    and recovery efforts. * * * Costs for these items and
    the indirect costs of managing the disaster recovery
    effort from the State and local funds are considered
    to be a significant contribution toward disaster costs
    for which no Federal reimbursement will be requested."

    FEMA considered the State commitment to be totally unaccept-
    able, but still granted Federal assistance to individuals and,
    ultimately, for limited public assistance. FEMA explAined to us
    that it concluded that correcting the damage and loss to public
    facilities was within the capability of the State and local
    .governments. Consequently, its denial of public assistance would
    force these governments to repair their own public facilities.
    .3
    0

    As such, this would constitute an increase in commitments which
    FEMA then considered reasonable. This practice is known as forc-
    ing a commitment. In our view, the Governor should be advised
    that the commitment is inadequate and be given an opportunity to
    increase it. otherwise, the entire request should be denied.
    FEMA's inability to obtain adequate and reasonable State
    and local government commitments is acknowledged by its adoption
    of a 75 percent/25 percent cost-sharing policy.with regard to
    eligible public assistance costs. We found that this policy
    is consistent with the act, as discussed more fully in chapter 4.

    STATES' FINANCIAL CAPABILITIES
    NEED TO BE ADEQUATELY ASSESSED
    In August 1979, we reported on FEMA's reimbursement policies
    for snow emergencies (CED-79-97). 1/ We identified problems in
    FEMA's reimbursement policies and made several recommendations
    to correct these policies. FEMA has not resolved all of the
    problems. One unresolved problem concerns inequities in the
    Disaster Relief Act of 1974. Our report recognized that the way
    the act is implemented unfairly penalizes or rewards States
    applying for Federal reimbursements because of differences in
    State laws and States' preparedness to deal with major disasters
    and emergencies. We recommended that FEMA prepare a comprehen-
    sive analysis of the impact of these potential inequities on
    Federal disaster assistance and submit to the Congress a detailed
    plan and legislative changes to correct such weaknesses.
    FEMA agreed that inequities exist in disaster relief because
    of differences in State laws,r fiscal procedures, and flexibility
    in allocating funds. It agreed to conduct a study if directed
    by the Congress to do so.
    The recommended analysis has not been undertaken. if this
    analysis had been undertaken, FEMA would now be in a better posi-
    tion to evaluate the capability of State and local governments
    and the reasonableness of their commitments. And, the problems
    discussed in this report may have been minimized.

    FEMA said that our comments on budgetary relief (p. 31)
    are not consistent with the comments and recommendations made
    by GAO in its August 1979 report on FEMA's reimbursement policies
    for snow emergencies.

    I/The GAO report was actually directed to the Administrator of
    the Federal Disaster Assistance Administration, one of FEMA's
    predecessor agencies.
    31

    IWe requested that FEMA identify the specific comments and
    recommendations to which they referred. They identified several
    pages in our August 1979 report and informed us that throughout
    these pages we were insisting that States use all available
    resources before Federal assistance be provided.

    We believe that FEMA has misinterpreted the message in
    both of our reports. That message is that FEMA is not adequately
    assessing the capability of State and local governments to respond
    to their own disasters and emergencies. Out August 1979 report
    contained comments, such as the following:
    --"The act intends that Federal funds should not be dis-
    bursed to the extent that the State can use its legally
    ,available financial and physical resources."
    --"The act requires that State and local governments will
    do all they are capable of doing in responding to snow-
    storms before Federal assistance may be provided."1
    ---" To the extent that States have the financial capacity
    to meet the demands of the snowstorm, they should not be
    eligible to receive financial assistance under the act."

    Our August 1979 report also made the following recommendation:

    --That FEMA "revise the snow removal reimbursement policy
    to better safeguard the President's Disaster Relief Fund
    by (1) ensuring that Federal reimbursements are not paid
    to States that can afford their own cost of snow removal,
    (2) reimbursing only the cost of those activities which
    the State could not have performed without Federal finan-
    cial assistance, and (3) -discontinuing to reimburse States
    for costs that would have been incurred without a snow-
    storm."

    In discussing "budgetary relief" in this report, we referred
    to those situations where Federal assistance is denied to States
    who have, as an expediency, used budgeted funds from other
    sources for disaster assistance. This raises a question as to
    whether the States have used all "available" financial resources
    or whether they have gone beyond their own financial capability.
    A major issue in both reports is that FEMA does not know
    what State and local government funds are available for disaster
    assistance and are, therefore, not adequately assessing the
    capability of State and local governments to handle their own
    disasters.

    CONCLUS IONS

    When a major disaster or an emergency occurs, FEMA needs to
    quickly evaluate the situation and determine whether a declara-
    tion should b'e made. FEMA reacts to the situation, obtains
    and considers readily available information, and makes its
    32

    recommendation to the President. However, F'EMA does not always
    document the relevant factors considered in their decisions.
    Better advanced planning by FEmA and uniform policies, procedures,
    And guidelines would enable FEMA to speed the process while, at
    the same time, enable it to obtain more information and perform
    better.analyses. This should also minimize unwarranted requests
    and the expenditure of Federal resources to evaluate the requests.
    Not all Governors comply with the requirements of the act
    and regulations. As a result, FEMA frequently finds it neces-
    sacy to work with incomplete information. FEMA should advise the
    StAtes in advance as to the specific nature of these requirements
    and make it clear 'that future requests which fully comply with
    Federal laws and regulations will help avoid delays in processing
    their requests.

    FEMA has made little effort'to inform States fully on the
    policies, procedures, methods, and guidelines which it uses to
    evaluate requests. The disclosure of such information would
    enable State and local governments to better decide whether
    they had a valid requ.est to make and provide them with know-
    ledge 'of the types and amounts of information FEMA needs to make
    its decision.

    Differences in State laws, fiscal procedures, and funding
    levels make it difficult for FEMA to assess States' capability
    and create inequities among the States in administering disaster
    relief.

    RECOMMENDATIONS
    We recommend that the Director, FEMA:
    --Reevaluate and improve FEMA's assessment criteria for
    evaluating major disaster and emergency requests.
    --Establish written policies, procedures, and guidelines
    to use when evaluating major disaster and emergency
    requests and publish them in the Federal Register. This
    should include (1) an explanation of FEMA's basic philos-
    ophy for evaluating capability and commitment, (2) an
    explanation of the use of evaluation factors, such as debt
    and borrowing capacity, surplus funds, prior disaster
    history, and (3) FEMA's positions on budgetary relief,
    forced commitments, and similar matters.

    --Require that Governors' requests include comprehensive
    information on the financial capability of the State,
    the availability of such resources under State law, per
    capita income, disaster trends, and similar factors to
    expedite FEMA's assessment of the level of capability each
    State could attain and to aid FEMA in evaluating the
    reasonableness of State commitments.
    33

    --Make it clear that future requests which fully comply with
    Federal laws and regulations will help avoid delays in
    processing the requests.
    --Require the documentation of all substantive discussions
    and evaluation meetings held by FEMA.

    AGENCY COMMENTS AND OUR EVALUATION
    The Director informed us that the first four recommendations
    are being given consideration in the development of a revised
    regulation on the Declaration Process. Shortly after receipt of
    the Director's comments, FEMA established a plan for consiaering
    all o f the foregoing recommendations, with final regulatory action
    to be completed by September 30, 1982. We have no basis for
    evaluating the Director's response to our recommendations and the
    FEMA plan until the regulation has actually been issued.

    The Director agreed that documentation of the basis for
    their final recommendation to the President, including a statement
    of relevant factors considered~, is needed. However, he would not
    want the documentation process to impede the expeditious process-
    ing of the requests. We had spoken to the former Associate Di-
    rector, DR&R, regarding this matter and he did not,believe that
    such documentation would slow down the decisionmaking process.

    RECOMMENDATION TO THE CONGRESS
    As recommended to FEMA in August 1979, we recommend that the
    Congress direct FEMA to prepare a comprehensive analysis of the
    impact of potential State inequities on Federal disaster assis-
    tance and submit to the Congress a detailed plan and legislative
    changes to correct such weaknesses.
    34

    CHAPTER 4

    THE CONGRESS NEEDS TO CLARIFY
    DISASTER ASSISTANCE ISSUES
    Two recent FEMA actions have raised serious concerns that it
    may have changed the scope of the Disaster Relief Act. First, in
    May 1980 FEMA adopted a general policy of requiring State and
    local governments to pay 25 percent of eligible public assistance
    costs. Second, disaster assistance has been provided for man-made
    events, such as the Love Canal chemical contamination and the
    Cuban refugee influx in Florida. Such assistance has stirred
    consiLderable controversy because many feel that these situations
    were not natural disasters covered by the act.
    FEMA COST-SHARING POLICY
    IS CON51STENT WITH THE ACT
    FEMA has encountered numerous problems, as explained earlier,
    in trying to assess the "1reasonableness" of State and local gov-
    ernment commitments. To overcome these problems, FEMA unilater-
    ally adopted in May 1980 a policy of providing 75 percent Federal
    funding for eligible public assistance costs and requiring the
    State and local governments to finance the remaining 25 percent.
    FEMA advises us that the President ultimately decides the actual
    percent which,State and local governments must assume.

    Problems in obtaining
    a reasonable State and
    local commitment
    To ensure that Federal disaster assistance is supplemental
    to State and local efforts, FEMA regulations require each State
    applying for Federal disaster relief to execute a Federal-State
    agreement as a prerequisite to receiving Federal disaster assist-
    ance (44 C.F.R. 205.44 (1980)). Under these agreements, the
    Governor must assure that a reasonable amount of State and local
    government funds will be committed to disaster relief.
    FEMA has difficulty in ascertaining the reasonableness of
    the Governors' commitments. FEMA's experience is that these
    commitments extended to circumstances where the Governors have on
    occasion agreed to assume (1) the expense of accomplishing work
    which is necessary for recovery purposes but which would not be
    eligible for Federal reimbursement undet the disaster assistance
    program, (2) admin-istrative and other costs, sometimes including
    the cost of prudent hazard mitigation to reduce or eliminate the
    threat of similar future damage and hardship, or (3) the entire
    cost of particular projects or categories of projects which would
    otherwise be eligible for Federal reimbursement. Governors have
    also, at times, agreed to a contribution based on a percentage of
    disaster-r-elated costs which would otherwise be eligible for
    Federal reimbursement.
    35

    FEMA often found, after the fact, that,the State and local
    contributions were not substantial or significant. Furthermore,
    States were not always prudent in their requests for public
    assistance. The Associate Director, DR&R, told us that States
    were providing limited co-mmitments so far as public assistance
    was concerned and that FEMA attempted to negotiate greater con-
    tributions from States. The Deputy Associate Director, DR&R,
    told us that commitments were often soft, in that State and local
    governments often used normal programs such as police and fire
    departments as their required commitments.

    At a Regional Directors' conference in December 1980, the
    Director, FEMA, cautioned that "without restraints the Disaster
    program could becomDe a welfare program."

    Adoption of cost-sharing
    policy for public assistance

    in May 1980 FEMA adopted a policy of requiring all States to
    agree to pay 25 percent of the costs of eligible public assist-
    ance programs unless such States could show, or the President
    determines, that 25 percent was not a reasonable commitment.
    FEMA's adoption of the cost-sharing approach was an effort to
    obtain reasonable commitments of funds and uniformity among the
    States.

    FEMA justified this new policy primarily on the grounds that
    it is in accordance With congressional intent to make Federal
    disaster assistance supplemental to State efforts and that such
    a policy readily ensures that States will pay a "reasonable
    amount" of the costs of disaster relief. FEMA believes that such
    a policy would also provide greater equity among the States.
    Some States, for example, have set aside funds to use in the
    event of a disaster while other States have no fund and, there-
    fore, depend on 100 percent Federal funding. One State with a
    voter-imposed limitation on taxes argues that this limitation is
    grounds for more generous Federal disaster assistance.

    FEMA also believes that such a cost-sharing arrangement has
    the advantage of reducing Federal expenditures for the disaster
    relief program--estimated at $30 million in fiscal year 1982--and
    that it will reduce the time previously required to deliver
    disaster relief assistance to affected States by reducing the
    time it takes to evaluate the extent of State and local contri-
    butions to the disaster relief effott.

    FEMA policy creating
    opposition and concern

    FEMA's cost-sharing policy has created much opposition and
    concern on the part of Governor's! legislators, and organizations
    of State officials. The Governors who have had to agree to thie
    cost-sharing in order to receive Federal disaster assistance feel
    the 75/25 percent cost-sharing policy is an arbitrary FEMA de-
    cision that should not have been made without consulting with
    36

    them and the Congress. They contend that State and local
    governments already bear a major role in disaster relief because
    of their predeclaration commitment of resources and their assump-
    tion of ineligible public assistance costs. They also contend
    that FEMA's new policy further burdens the State and local gov-
    ernments by requiring them to pick up, in addition to the above
    mentioned cost, 25 percent of the eligible public assistance
    costs.
    Legislators have expressed the belief that statutory
    authority does not support this policy, and several Governors
    have written directly to the President making such statements as:
    --Iam signing the Disaster Agreement under protest."

    --"I must object strongly to your limitation of Federal
    reimbursement for public facilities."
    in view of the foregoing, FEMA has submitted proposed legis-
    lation to incorporate the 75/25 cost-sharing policy into present
    law.
    Cost-sharing policy
    consistent with the act
    FEMA'has not formalized its policy by promulgating a regula-
    tion or by publishing a notice in the Federal Register. However,
    our analysis of the act and its legislative history indicates
    that FEMA can determine that previous levels of sharing have been
    unacceptably low and that 25 percent represents a reasonable level
    of State and local government participation in all foreseeable
    circumstances. The policy would not be proper if FEMA were un-
    willing to deviate from it no matter what the circumstances. How-
    ever, FEMA informs us that it remains willing to modify its cost-
    sharing ratio if the circumstances surrounding a disaster warranted
    a different cost-sharing ratio. Thus, we cannot say that FEMA's
    policy is an abuse of discretion.
    While this policy has not been embodied in a formal rule,
    FEMA has provided us with a draft of such a rule. The draft rule
    justifies this approach primarily on grounds that it is in ac-
    cordance with congressional intent to make Federal disaster
    assistance supplemental to State and local efforts and that such
    a policy readily ensures that States and local governments will
    pay a reasonable amount of disaster relief costs.
    The draft of FEMA's proposed rule expressing its 75/25
    percent cost-sharing policy indicates that exceptions might be
    made when there are:
    `* * * such extraordinary and compelling
    circumstances, unique to a particular disaster-
    affected State, that State and local contribu-
    tions at this level or of this type would be
    clearly precluded. Such circumstances might
    37

    include the occurrence of an overwhelmingly
    catastrophic event or repeated disasters
    affecting the same jurisdiction.":I
    FEMA's policy of requiring States to bear 25 percent of the
    cost of public assistance, if applied without exception, could
    result in State and local governments having to pay for disaster
    relief costs which they believe are beyond their capability or
    which they believe constitute more than a reasonable amount of
    State and local funds. Conversely, States which can afford.to
    pay more than 25 percent could be allowed to contribute less than
    a reasonable amount.

    We are not able to conclude that FEMA is acting improperly,
    as long as it does not refuse to make exceptions to the policy.
    In terms of the statutory goal that costs be shared between
    Federal and State and local authorities, FEMA can legitimately
    seek assurances that the State and local governments'are, in fact,
    contributing a reasonable amount of their funds, as required by
    section 301(b) of the act. As a consequence, based on its ex-
    perience with the program, FEMA concluded that 25 percent was a
    reasonable proportion for St.ate and local governments in virtually
    all conditions.

    CONCLUS ION
    FEMA's apparently strict adherence to the 75/25 cost-sharing
    ratio is based on a discretionary assessment that this cost-
    sharing approach results in a reasonable level of State and local
    government participation in disaster relief costs in almost
    all cases. It obviates the administrative problems associated
    with attempting to determine a reasonable commitment for each
    disaster and also assures compliance with the statutory purpose
    that the Federal aid be supplemental. Moreover, FEMA has left
    itself free to recommend providing more or less than 75 percent
    of the ass-Istance should it be convinced in a particular situa-
    tion that an exception is warranted. Under these circumnstances,
    FEMA's cost-sharing policy is consistent with existing law. How-
    ever, the policy has created controversy on the part of Gover-
    nors, legislators, and organizations of State officials.
    RECOMMENDATION TO THE CONGRESS
    Because of the controversy surrounding FEMA's cost-sharing
    policy, we recommend that the Congress reevaluate the present law
    and clarify the extent to which supplemental Federal assistance
    should be given in major disasters and emergencies.
    AGENCY COMMENTS AND OUR EVALUATION
    The Director informed us that FEMA had not adopted a
    general policy of requiring State and local governments to pay
    25 percentlof eligible public assistance costs. He said such
    adoption would have had to be promulgated as a regulation in
    the Federal Register. Accordingly, he said all references to
    FEMA's policy on cost sharing should be corrected.
    38

    We see to need to change our terminology. We are using
    the word "policy" in a general sense as described by Webster's
    dictionary: "a principle,, plan,,or course of action, as pursued
    by a government, organization., individual, etc." We did not ad-
    dress the issue of whether this policy should have been promul-
    gated.in the Federal Register as it was not germane to our
    review.
    USING THE DISASTER RELIEF
    ACT FOR OTHER THAN NATURAL
    CATASTROPHES NEEDS CLARIFICATION

    In 1980 the President declared emergencies for the Cuban
    refugee influx into Florida and the chemical contamination of
    Love Canal in New York.  This provoked co'ngressional conc ern that
    the act was drafted too.broadly,land,was being applied to catas-
    trophes.other th.an'nat,ural disasters as the Congress original-
    ly intended.
    Because other than natural1 catastrophes do not generally
    fall within the definition of those catastrophes specifically
    enumerated-.bby section 102 of the act, major disaster or emergency
    declarations issued in response to such catastrophes must be
    supported by reference to the general phrase in the act's defin-
    itional section "other catastrophe." While a literal reading
    of this phrase indicates that the President possesses consider-
    ~able latitude in selecting the type of catastrophes which may
    qualify as major disasters or emergencies, the legislative his-
    tory of the act indicates that the Congress intended it to al-
    leviate State and.local conditions caused primarily by natural
    catastrophes.

    In 1980, the Senate Committee on Environment and Public
    Works criticized the President's declaration of an emergency for
    the Cuban refugee influx in Florida. The committee stated that
    the Congress historically intended Federal disaster assistance to
    apply to a fixed range of responses to particular kinds of events
    which were spelled out in the act's definitional sections. Fur-
    thermore, the committee stated that the reauthorization act
    (Public Law 96-568) should not be applied to extraordinary occur-
    rences not specifically enumerated in the act insofar as it is
    not intended to provide assistance for occurrences of strictly a
    social or economic nature.
    The Deputy Associate Director, DR&R, told us that he
    considers the Cuban refugee influx to be a man-made emergency.
    He contends that FEMA assistance was provided primarily to al-
    leviate the hardship and suffering of Florida citizens and not
    to help the Cuban refugees. He'contends FEMA should continue to
    provide such assistance because FEMA is the only Federal agency
    with existing authority to readily provide funds, direct other
    Federal agencies to act, and reimburse State and local govern-
    knents for their expenditures.
    39

    CONCLUSION

    Until the Congress amends the definition section of the
    act, by deleting the pDhrase "or other catastropDhe" or includes
    an additional provision limiting the scope of the act to occur-
    rences resulting from natural catastrophes, Presidential authority
    to declare a major disaster or an emergency in response to other
    than natural disasters exists. While Presidential declarations
    premised on this approach seem to be based on a broad interpre-
    tation of the act, nonetheless, as pIresently worded, the act gives
    discretionary authority to the President to determine which occur-
    rences amount to other catastrophes.

    RECOMMENDATION TO THE CONGRESS

    We recommend that the Congress clarify the act by spelling
    out as clearly as possible the type of incidents which may re-
    ceive disaster assistance. It could define more precisely the
    intended coverage of the act and specify that disaster assistance
    should be provided if there are no other Federal programs avail-
    able and the State is unable to cope with the situation. FEMA
    and the administration would then be better able to administer
    the act as the Congress intends.
    i
    I

    I
    I
    40

    APPENDIX I
    APPENDIX I
    MAJOR DISASTERS, EMERGENCIES,

    AND DENIALS REVIEWED BY GAO
    -   ;                        -,   ,~~~~~~~~~~~~~~�

    FEMA
    declaration      Date of
    number       declaration

    Major disasters:
    -
    ....
    Total estimated
    requirements
    (note a)

    $  1,618,553
    1,328,294
    1,335,866
    1,909,482
    1,255,000
    8,249,808
    23,462,600
    133,000
    1,618,555
    2,475,:098
    2,967,000
    219,341
    444,000
    1,650,000
    510,000
    287,292
    3,732,946
    12,024,918
    128,783,242
    3,389,000
    373,600
    566,000
    547,034
    2,607,376
    FEMA
    region

    9
    9
    6

    4
    6

    5

    : 7
    6
    7
    4
    3
    1
    9
    10
    9
    9
    9
    6
    6
    7
    5
    9
    State

    Calif.
    La.
    Hi.
    Ark.:
    Okla.
    Ala .
    Ill.
    Tex.
    Kans.
    N. Meex.
    Iowa
    N.C.
    Va.
    Conn.
    Am. Sam.
    Wash.
    Hi.
    Ariz.
    Calif.
    La.
    Ark.
    Mo.
    Wis.
    Calif.
    566
    567
    573
    574
    576
    578
    583
    587
    588
    589
    590
    605
    606
    608
    610
    612
    613
    614
    615
    616
    617
    620
    626
    633
    Oct. 9, 1978
    Dec. 6, 1978
    Mar. 7, 1979
    Apr. 11, 1979
    Apr. 13, 1- 9:'79
    Apr. 18, 1979
    Apr. 30, 1979
    Junez 14, I979-
    June 15, 1979
    June 23,1i979I
    July 1, 1979
    Sept. 29, 1979
    Sept. 29, 1979
    Oct. 4, 1979
    Nov. 9, 1979
    Dec. 31, 1979
    Feb. 6, 1980
    Feb. 19, 1980
    Feb. 21, 1980
    Apr. 9, 1980
    Apr. 16, 1980
    May 15, 1980
    July 24, 1980
    Oct. 2, 1980
    Emergencies:
    3070
    3071
    3072
    3073
    3074
    3075
    3078
    3081
    Mar.
    Mar.
    Mar.
    Mar.
    Mar.
    Mar.
    Feb.
    June
    12, 1979
    12, 1979
    13, 1979
    15, 1979
    17, 1979
    24, 1979
    1, 1980
    13, 1980
    Wash.
    Mo.
    Ga.
    N.H.
    Ala.
    Fla.
    Calif.
    Pa.
    10
    7
    4
    1
    4
    4
    9
    3
    30,000
    100
    41,000
    319,168
    657,338
    784,506
    21,294,311
    0
    41

    APPENDIX I
    APPENDIX I
    FEMA
    declaration
    number
    Total estimated
    requirements
    (note a)
    FEMA
    region
    Date of
    declaration
    State
    Denials:
    $  3,053,960
    913,804
    976,000
    1,227,100
    2,465,500
    1,461,560
    3,570,000
    3,570,000
    963 .211
    Mar. 12, 1979
    Mar. 30, 1979
    Apr. 23, 1979
    Nov. 26, 1979
    Dec. 7, 1979
    Apr. 26, 1980
    May 1, 1980
    May 31, 1980
    June 10. 1980
    Fla.
    Miss.
    Wash.
    Kans.
    Hi.
    Hi.
    N.Y.
    N.Y.
    Ala.
    4
    4
    10
    7
    9
    9
    2
    (Appeal)  2
    4

    a/Estimated requirements for major disasters and emergencies were
    obtained from FEMA reports available at the time of our review.
    Amounts related to denials were obtained from regional disaster
    summary reports.
    42

    APPENDIX 11
    APPENDIX 11
    ~TECHNICAL ANALYSES-
    This appendix provides details for the technical reader on
    the analyses and models used in this report'.
    THE DATA BASE
    we analyzed 96 of 102 requests for disaster assistance from
    fiscal years 1979 and 1980. Our primary source of information
    was the FEMA decision files on each disaster. The files contained
    information on FEMA's decisions with respect to the Governors'
    requests-,-i.e., complete or-parti,al assistance granted and assis-
    tance denied. The files contained statistics describing the
    magnitude of the disasters, in terms of number of lives lost,
    people injured, number-of homes damaged, and similar data. The
    files also contained miscellaneous data on a State's capability
    to handle the disaster and some information on the local dollars
    committed to dealing with it. We identified a total of about 30
    pertinent variables.contained in the FEMA files.
    The major,problem with the data was that much of it was
    missing or ambiguous. While a few of the 96 requests had infor-
    mation on most of the 30 variables., most did not, and it was
    not always clear as to why the data was missing. For example,
    if there were no statistics on number of homes damaged, we did
    not know whether any homes were damaged in the disaster or whether
    no good esti-mates to report existed.
    A review of some of the requests'and discussions with FEMA
    officials led us to believe that often requests with missing
    values fell into two categories: (1) minor disasters where a
    missing value usually meant zero.or a relatively small number
    and (2) obviously large disasters like Mt. St. Helens where a
    missing value meant a large,number and officials, in their hurry
    to process.the re'quest, did not take the time to estimate the
    number.

    We tried to reconcile the missing data problem in several
    ways.  We used only the important variables with the least
    amount of missing data and combined several variables. For
    example,w we combined homes with minor damage, major damage,
    and those completely destroyed into one measure of homes damaged.
    We also added the estimated amount of eligible costs for indi-
    vidual assistAnce and public assi stance to have one figure as
    the total amount of eligible assistance. This combination of
    variables was also desirable to reduce them to a manageable
    number for-the regression analysis discussed later.
    Another way we tried to solve the problem was to substitute
    what-we believed were reasonable estimaltes for missing values.
    For example, there were 16 requests that had mis'sing values
    for the total estimated eligible costs--an essential variable
    for the analysis. We found that 9 of the 16 requests were large
    and declared as disasters. For these, we used current estimated
    43

    APPENDIX II                                              APPENDIX II
    requirements as a substitute. The other seven requests were
    denied assistance and appeared to have total damage less than
    the smallest request received ($138,000).  We arbitrarily assIumed
    $100,000 as the total eligible,costs for these denied requests.
    We did not have good substitute values for missing dat-a on homes,
    damaged or people killed'or injured so we assumed they were zero
    for some analyses. While the assumption may be adequate for the
    small disasters, it is probably inadequate for the large disas-
    ters. Consequently, we dropped the nine large disasters with
    missing values from some of our analyses.
    In addition to the FEMA files, we collected da ta from the
    statistical abstract on,per,capita income in the States where.
    the disasters occurred--we used this as an indicator of a State's
    financial capacity. For.jurisdictions in the Pacific, such:as
    the Trust Territories with no published data on per capita in-
    come, we assumed a value of $1,000.
    Such assumptions and approximations may appear to make anyz
    analyses of questionable value. The reAder should certainly
    keep these limitations in mind in reviewing the results. How-
    ever,.a major focus of our analysis was to assess FEMA's de-,
    cisionmaking criteria and this application data with all the
    missing values is the primary data FEMA had on which to base
    its decisions, although FEMA probably supplemented the decision
    ,file data with some information from phone calls and other in-
    formed contacts. While our assumptions may be crude, we expect
    that they simulate, to some degree, the assumptions FEMA made.
    BASIC ANALYSIS
    For selected variables, we developed a separate frequency
    distribution for both granted and denied requests. These vari-
    ables are total estimated eligible costs, people injured, homes
    damaged, State per capita income, month the event occurred,I
    political party of the Governor, and commitment statement on the
    part of the State in which its disaster occurred. These dis-
    tributions were compared to see if there was a difference between
    granted and denied requests.  These distributions are shown in
    the tables in the text of the report.
    DECISION MODELS
    To further estimate the basis of FEMA's decisions we
    developed several statistical models. We attempted to see how
    FEMA used several variables in concert to make decisions.  For
    example, if some measure of disaster severity were extremely
    high, would this compensate for other variables that wer'e low?
    We also used the models for leads on cases that FEMA may have
    classified inconsistently.  This was done by determining.what
    individual cases the models classified the outcome, granted
    or denied, differently than FEMA.
    44

    APPENDIX II
    APPENDIX II
    The models were basically statistical multiregression
    models.  But instead of using the traditional straight line re-
    gression, we used an "S" shaped curve to try to better fit the
    data to the dichotomous dependent variable, i.e., 0 (denied) or
    1 (granted).  See figure 3, which is a hypothetical example
    showing the cumulative probability of granting assistance for
    one independent variable.

    FIGURE 3
    CUMULATIVE PROBABILITY CURVE
    1.0

    a

    II

    /
    /
    I
    /
    /
    /
    /
    /
    /
    I

    -    /
    I
    I
    I
    I

    /
    I
    I

    / /
    I
    I
    a
    w
    2
    z

    AD

    0
    o
    'U

    n
    a
    I-
    '4

     0.5
    0

    o
    0
    m -
    A.
    ./

    , _

    _  _	_ -	-
    i II rr IL	.00goo so
    t-
    I
    I
    I                                                                                                                                                                                               I I
    0
    30
    10
    20
    40
    : TOTAL ESTIMATED ELIGIBLE COST IN MILLIONS OF DOLLARS
    r  I   ;
    45

    APPENDIX II                                               APPENDIX II

    We used a logit model based on, the cumulative logistic
    probability function which is often used to give this k,ind of.
    probability curve.  The equation for the logistic model is:

    P = 1 + EXP 1-(Bo + BiX1 + B-2X2...+BXj + u)]         ,

    Where:   P is the probability a request is granted.

    X1, X-...Xnare the influencing variables, i.e., size

    of disaster in dollars, homes damaged, etc.

    Bo is the constant term in the regression equation.

    B1, B2... Bn are the regression coefficients for the

    variables, size of- disaster in dollars, homes damaged,
    etc.

    EXP is the exponential function.

    u is the error term.

    The logit equationocan be written as: 1/

    Z   Log  (1_   = Bo + B1X] + B2X2...B1nXXn + u
    u yt-p /

    Where:  Z is a probability index that a request
    is granted.

    While some authorities recommend estimating the logit
    models by Maximum Likelihood or simulation, we used the simpler
    Ordinary Least Squares (OLS) method using P=.999 for P=l and
    P=.001l for P=0. These approximations were necessary because
    otherwise Z will be undefined.. The more sophisticated method
    may be more mathematically rigorous, but in many cases will,
    give the same results as OLS.

    1/If the estimated probability of approval, as -derived from the
    estimated value of Z, is equal to or greater than .5, the
    request is considered approved, otherwise it is denied.
    46

    APPENDIX
    IIAPEDXI
    APPENDIX 11
    Another analytical problem was that requests for assistance
    can be decided in several ways. For example, a request for a
    combination of both individual and,public assistance could be
    decided in four ways: (1) both-granted, (2) only public assis-
    tance granted, (3) only individual assistance granted, or (4)
    both denied. But, the models were designed only to classify
    decisions in one of two ways--granted or denied. Ideally we
    would have liked to develop separate models for each .type of
    assistance but there were not enough observations to do this.
    To partially accommodate this problem we grouped all the requests
    together and included the categorical variables-type of request.
    We also ran separate models for certain categories.

    To more thoroughly analyze F'EMA's decisionmaking process we
    *experimented with different variables.. In some cases we also
    combined several variables into one term, an.interaction term.
    This is an attempt to capture differential responses for some
    of the continuous variables, e.g., total el-igible cost, number of
    homes damaged, etc. As a consequence, several models were devel-
    *oped.  Six of these-are shown in table 8 of the text.  The
    discussion that follows is a summary of the results of the six
    models.

    R~jessonresults

    For most of the six models a positive relationship exists
    between the Z score and the total eligible costs, number of people
    injured and number of homes damaged. I/ This indicates that the
    greater the.values of total eligible costs, the more people in-
    jured, and the more homes damaged, the greater 'the probability
    of a request being granted.
    The impact of a Governor making the required commitment
    statement is not entirely clear since the coefficient for the
    commitment variable is not significant at the 80 percent confi-
    dence level except in one case. Also, the sign of the coef-
    ficient is negative in two of the models.

    The coefficient of the month variable is negative and
    is usually significant.  It suggests that the probability of
    getting a request granted-is less the more months that pass
    starting from October 1978 if all other variables remain the
    same. This may be partly because of inflation decreasing the
    real.value of total dollars requested. Also, while the month
    variable was not explicitly designed to estimate fiscal year
    influences, it probably picked up some of the impact of budget
    problems towards the end of fiscal year 1980.

    l/While eligible cost and people :injured were statistically
    significant in the six models, homes damaged was significant
    in only three of the models.
    47

    APPEINDIX II
    APPENDIX II
    The sign of the coefficient of per capita income is
    negative but is not significant at the 80-percent confidence
    level in most models. This negative sign indicates that the
    chance of a request from a State with a low per capita income
    being granted is higher if everything elseremains the same.

    Table 10 shows the regression coefficients for the Z score
    for two different models provided for illustration purposes.
    These numbers show the magnitude and direction of the relations
    between the variables and Z scores. The significance of the
    coefficient is indicated by the "t" shown in parentheses. The
    larger the absolute number for "t" the more confident we are in
    the significance of the coefficients. I/

    Summary statistics on the table are indicators of how
    accurately the regression equation, as a whole, expresses the
    relationship among variables.  The R2 expresses the percentage
    of the variation in Z score that is explained by the influencing
    variables. The closer R2 is to 1.0 the better the equation fits
    the data.

    The R2 we achieved for some of the models might be con-
    sidered somewhat low.  However, in this kind of model with qual-
    itative dependent variables, the goodness of fit of these equa-
    tions is better measured by the percentage of correct classifi-
    cation of decisions (i.e., cases the model classified the same
    as FEMA). Most of the models classified more than 80 percent
    of the decisions as FEMA did. Overall, we believe the regression
    equations express the relationship between the decision and the
    other variables reasonably well. However, we feel FEMA needs
    to do additional work on those models before they can be used
    for assessing requests.

    We also used the six models to find leads on cases that
    FEMA may have classified inconsistently.  But they seemed to
    overclassify cases granted because of certain technical problems.
    There seemed to be a different probability of a case being de-
    clared for the different types of assistance. For example, if
    one requests both types of assistance FEMA seems more likely to
    grant either both or individual assistance in comparison with
    granting public assistance. We did not try to evaluate FEMA's
    underlying rationale for this but we tried to capture these in-
    fluences by adding the categorical variable-type of assistance
    granted.  Therefore, some of the models have not only the vari-
    ables that characterized the disaster, e.g., people injured, but
    also the two categorical variables--type of request as well as
    type of assistance granted. The combination of these two
    categorical variables in a sense measures the propensity of FEMA

    I/Some authorities would argue that all variables would be
    significant in our analysis since we are dealing with the
    universe of requests in fiscal year 1979 and 1980 and not a
    sample.
    48

    APPENDIX II                                               APPENDIX II
    to grant certain types of assistance given a certain type of
    request. We also used these additional models to look for FEMA
    inconsistencies. Table 11 lists the cases that FEMA classified
    differently from any of our models. To further evaluate if these
    20 cases were inconsistent FEMA decisions, we compared the values
    of key variables, e.g., number of homes damaged, for these cases
    with the average value for the particular type of assistance
    granted. In those cases denied, the values of key variables were
    compared with the average of those turned down. Table 9 in the
    text shows this comparison for eight cases.

    0

    F

    I

    I

    e

    49

    APPENDIX II
    APPENDIX II
    Table 10

    Selected Regression Equations
    Model number
    3     .      5
    Independent variables
    5.7987*
    (2.06)
    8.4649*
    (2.58)
    Constant
    Request for individual
    assistance only

    Request for public assistance
    only
    -5.8968*
    (-3.05)

    -9.0600*
    (-5.54)
    Total estimated eligible
    cost, in $100 millions
    3.6828*
    (1.37)
    27.343*
    (1.66)
    Homes damaged and destroyed,
    in thousands
    0.8259*
    (2.08)
    0.2074
    (0.43)
    People injured, in thousands

    Per capita income in the State
    in which the disaster
    occurred, in dollars
    9.9469*
    (1.51)

    -0.0004
    (-1.08)
    29.7749*
    (2.30)

    -0.0003
    (-0.94)

    I
    If Governor made required
    commitment statement

    Month of decision
    0.4873
    (0.43)
    -1.3144
    (-0.92)
    -0.2458*
    (-2.38)
    Summary statistics
    0.40
    96
    0.24
    67
    Number of decisions
    Number of decisions classified
    differently than FEIMA
    Percent of decisions classified
    the same as FEMA
    16
    13
    83
    8
    1
    * Significant at least at the 80-percent confidence level.
    50

    APPENDIX II
    APPENDIX II
    Table 11
    Decisions that Models Predicted
    Differently from FEMA
    * D

    iL.

    I.                   1
    FEMA
    Decision decision
    number   (note a)
    Model
    decision
    (note a)
    3
    6
    9
    23
    24
    27
    30
    31
    32
    34
    35
    37
    40
    44
    46
    52
    71
    1
    1
    1
    1
    1
    0

    0
    0
    0
    0
    0
    0
    0
    0
    0
    0
    1
    0
    0
    0
    0
    0
    1
    1
    1
    1
    1
    1
    1
    1
    1
    1
    1
    0
    0
    1
    1

     1 indicates approval.
    _1
    73	1
    97 1	0
    98	0
    a/0 indicates disapproval and

    51

    APPENDIX III
    APPENDIX III
    Federal Emergency Management Agency
    Washington, D.C. 20472

    SEP 29 1981

    Mr. Henry Eschwege
    Director
    Community and Economic
    Development Division
    United States General
    Accounting Office
    Washington, D.C.   20548
    Dear Mr. Eschwege:
    I appreciate the opportunity to review the draft report entitled
    "Improvements Should Be Made in Evaluating Requests for Federal
    Disaster Assistance." As the a�ency charged with the responsibility
    for administering the President s Disaster Relief Fund, FEMA has
    an interest in the entire subject matter of this report.
    This report has a number of worthwhile comments regarding the
    problems associated with State and local government commitment,
    State and local government capability, and cost sharing. These
    are interrelated and must be considered in requests for Federal
    disaster assistance under Public L~w 93-288. FEMA has been
    seeking improvements in this area and currently is in the process
    of revising 44 CFR 205, Subpart C, the Declaration Process. The
    comments and recommendations in this draft report will be con-
    sidered in this revision.
    FEMA, on behalf of the Administration, has submitted an amendment
    to the Disaster Relief Act by including 75/25 cost sharing for
    Public Assistance.  We believe that our proposal would result in a
    clear identification of funds expended on the part of a State and
    its local governments as required by the Act for a commitment.
    I am enclosing specific comments on this draft report.
    Sincerely,

    Director
    Enclosure
    52

    APPENDIX III                                                       APPENDIX III

    GAO DRAFT REPORT ENTITLED "IMPROVEMENTS SHOULD
    BE MADE IN EVALUATING REQUESTS FOR FEDERAL DISASTER ASSISTANCE

    Specific Comments by FEMA to this report are:
    1.  Page 6, second paragraph.  This paragraph refers to FEMA's
    evaluation of requests wherein it states that "FEMA advised us
    that it had no specific criteria for evaluating requests for
    assistance..."  There are criteria established -in Sections 201 and
    301 of the Act that FEMA 'uses for its evaluation of requests.
    2.  Page 8, first  'paragraph.  This paragraph dealing with "unmet
    needs" and "impact" is accurate, but this paragraph also fails to
    recognize the statutory criteria contained in Sections 201 and 301
    of the Act.   (See GAO note 2, below.)
    3.  Page 8, first paragraph under Problems.  In responding to a
    request, regional personnel visit the scene of the incident to
    make a first-hand evaluation of the damage and requirements for
    Federal assistance.  The report then states, "They then make their
    recommendation to the Director of FEMA..." It would be more
    correct to revise'the last sentence to read, "Basedon this
    review, the Regional Director then makes a,recommendation..."
    4.  Page 10,seco�nd paragraph.  The first sentence reads, "It is
    clear that the higher the estimate of eligible costs, the greater
    the chance of a request being granted."  This is not entirely
    correct. Generally, it would be true for the same State, the same
    type of catastrophe and under similar circumstances.
    5.  Page 13, State Commitment.  It should be noted' that for some
    disasters in the past, a declaration was made with the;expectation
    of working-out the specific State commitment and including it in
    the Federal-State Agreement.  Section 44 CFR 205.44 provides that.
    the Federal-State Agreement shall contain a statement of the
    commitment. Since no FEMA.funding is approved until this agreement
    is signed, the specific commitment is sometimes obtained after the
    declaration.  Instances of this are rare and are generally limited
    to those situations where immediate Federal assistance is required
    to prevent a delay in initiating Federal disaster response activities.
    6.  Page 19-, first recommendation. 'That FEMA develop comprehensive,
    uniform forms to be used by Governors in submitting their requests
    and by regional offices in performing damage assessments.
    FEMA is currently in the process of revising 44 CFR 205, Subpart
    C, the Declaration Process.  This recommendation will be considered.
    7.  Page 19, second recommendation.  That FEMA use computer models
    such as those developed by GAO as a tool for program decision-
    making and evaluation.

    GAO notes: 1. Some page references have been changed to agree with the
    final report.
    2.  This paragraph refers to FEMA's internal guidelines.
    Statutory criteria is set forth on pages 23 and 24.
    53

    APPENDIX III                                                      APPENDIX IllI

    Nonconcur. The use of a computer model may have some merit in
    thle evaluation of certain aspects of the Disaster Relief Program
    and has been discussed. However, its use in decision-m aking with
    regard to disaster requests is severely limited. Key factors in
    the evaluation of a request include hardship, suffering and impact.
    Thete is no proper. way that these can be quantified for use in a
    decision-making computer model.
    8. Page 23, line 18: "Prior" should be added before "expenditure,"
    so t'S sentence will read, "The prior expenditure of funds is not
    a prerequisite for emergenQy requests, but the Governor is still
    required to..." in the definition section (102(l)), an "emergency"
    is a catastrophe ". ..which requires Federal emergency assistance
    to supplement State and local efforts to save lives and protect
    property.. ." Further, in requesting an "emergency," a Governor
    must describe the "State and local efforts and resources which
    have been or will be used to alleviate the emergency..." (Section
    301(a).)   lie therefore conclude that some expenditure of State
    and local funds must be made either before or following an e'mergency.
    9.  Page 23, last   paragraph.  These'comments with regard to the
    capability and commitment of State and local governments will be
    considered in the current revision of Subpart C.
    10.  Pag e24, fourthparagraph.  The report states that FEMA does
    not aTw'ays r`equire Governors to comply with legal requirements.
    FEMA has taken corrective action in this regard. FEMA it insisting
    that these legal requirements are complied with when a request is
    made.
    11. Page 29, second paragraph. The statement that FEMA bases its
    decision on the "Governor's request" and "whatever additional
    information is readily available" infers that FEMA may not adequately
    investigate each request. it should be noted that for marginal
    requests, FEMA national offfee does request additional information
    which may require field trips and research. These cases go beyond
    "readily available" in the scope of assessments.
    12. Page 30, fourth paragraph. With reference to "budgetary
    relief," the comment in this report is not consistent with the
    comments and recommendations made by GAO in its August 2, 1979
    report, "Federal Snow Removal Policy: Improvements Needed."
    13. Pages 33 and 34, Recommendations. GAO recommends that the
    Director of FEMA take the following actions:
    Reevaluate and improve FEMA's assessment criteria.
    Establish written policies, procedures, and guidelines that
    are used by FEMA to evaluate major disaster and emnergency
    requests and publish them in the Federal Register. This
    should include (1) an explanation of FEMA's basic philosophy
    ,for evaluating capability and commitment, (2) ani expression
    of the use of evaluation factors such as debt and borrowing
    54

    APPENDIX'- I S-I
    APPED IX I I I

    I
    .          ...  .
    capacity;. s-urpiu, fundsd-. pr hler saterhistory;-ad (3) -
    its positions on .b,udgetary relief', fobrcid Ccommftments d an :d
    similar matters. '      "                 -       '  -            -
    Require. that G:overno,rs!. r,equests include comprehensive
    information  on S.tate laws aindfunding' provfisfions, Sta:te
    revenues, per capita incom:e, -dias:ter ttinds, and sinfilar	?
    factors to ex.pedite', FgMA's assessm,nt tf'the'l level' of	i.
    capability eeach State coduld a,ttd'in and'"to aid-FEMA 'in. :.	:' -:
    evaluating ithe-te'asonableess of' State 'ommitments:.	-i   .
    Make it clear.t that .future reques't's whic'h fully comply with
    Federal laws and reg'ulation"s wi il' help avoid delays in..
    processing the requests.                             '-      -
    Require the documentation of all substantive discussions
    and evaluation meetings held by FEMA.
    The first four recommendations are being given consideration in
    the development of Subpart C. As to the final recommendation, we
    agree that documentation of the basis for the final recommen-
    dation, including the statement of relevant factors considered, is
    needed. However, we would not want the documentation process to
    impede the expeditious processing of the requests. It is FEMA's
    position that such documentation is not available under the Freedom
    of Information Act.
    14. Page 35, first paragraph: FEMA has not "adopted a general
    policy of requiring State and local governments to pay 25 percent
    of eligible public assistance costs.   Such adoption would have
    had to be promulgated as a regulation in the Federal Register.
    Rather, the FEMA Regional Directors, with Governors of disaster-
    affected States, have entered into Federal-State Agreements for
    each disaster starting with Mount St. Helens in May 1980, which
    provide that the costs of public assistance shall be met 75 percent
    by FEMA and 25 percent by State and local governments. For a
    vast majority of such disasters, the President has required this
    cost-sharing directly in his declaration letters. All similar
    references to FEMA's "policy" on 75/25 cost sharing at pages 35-
    39, and elsewhere in the report, should be corrected.
    15.  Page 35, third paragraph.  The first sentence reads, "To
    ensure that Federal disaster assistance is supplemental to State
    and local efforts, FEMA's regulations require each State applying
    for Federal disaster relief to execute a cost sharing agreement as
    a prerequisite to receipt of Federal disaster assistance..." This
    is misleading and technically inaccurate. FEMA's regulations do
    not require that Federal-State Agreements be "cost sharing agree-
    ment[s]." However, the report correctly notes that the Governor
    must assure that a reasonable amount of State and local government
    funds will be committed. The first sentence can be corrected by
    the elimination of "cost-sharing" in the third line.

    APPENDIX III
    APPENDIX III
    16. Page 38, Recommendation to the Congress. That the Congress
    reevaTu-Tt� t-he present law and FEMA's cost sharing policy and
    clarify the extent of supplemental Federal assistance to be given
    in major disasters and emergencies.
    Concur. FEMA, on behalf of the Administration, has submitted
    an amendment to the Disaster Relief Act by including 75/25 cost
    sharing for Public Assistance. Our proposal applies to restoration
    work and debris removal but not to other emergency work. We believe
    that this proposal would result in a clear identification of funds
    expended on the part of a State and its local governments as
    required by the Act for a commitment. Also, it would provide a
    more consistent approach among States with regard to their commitment
    on public sector repairs.

    (068109)
    56