Disaster Assistance: Information on FEMA's Post 9/11 Public	 
Assistance to the New York City Area (29-AUG-03, GAO-03-926).	 
                                                                 
The terrorist attacks on New York City created the most costly	 
disaster in U.S. history. In response, the President pledged at  
least $20 billion in aid to the city. Approximately $7.4 billion 
of this aid is being provided through the Federal Emergency	 
Management Agency's (FEMA) public assistance program, which	 
provides grants to state and local governments to respond to and 
recover from disasters. The Senate Committee on the Environment  
and Public Works requested that GAO determine (1) what activities
FEMA supported in the New York City area through its public	 
assistance program after the terrorist attacks; (2) how the	 
federal government's response to this terrorist event differed	 
from FEMA's traditional approach to providing public assistance  
in past disasters; and (3) what implications FEMA's public	 
assistance approach in the New York City area may have on the	 
delivery of public assistance should other major terrorist	 
attacks occur in the future.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-926 					        
    ACCNO:   A08269						        
  TITLE:     Disaster Assistance: Information on FEMA's Post 9/11     
Public Assistance to the New York City Area			 
     DATE:   08/29/2003 
  SUBJECT:   Federal funds					 
	     Financial management				 
	     Funds management					 
	     Strategic planning 				 
	     Terrorism						 
	     Comparative analysis				 
	     Disaster relief aid				 
	     World Trade Center (NY)				 
	     New York (NY)					 

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GAO-03-926

Report to the Committee on Environment and Public Works, U. S. Senate

United States General Accounting Office

GAO

August 2003 DISASTER ASSISTANCE

Information on FEMA*s Post 9/ 11 Public Assistance to the New York City
Area

GAO- 03- 926

FEMA has supported many activities through its $7.4 billion in public
assistance- related funding to the New York City area. Activities funded
include grants to state and local governments for emergency response, such
as debris removal, and permanent work, such as the repair of
disasterdamaged public facilities. FEMA also provided public assistance-
related funding specifically directed by Congress that would not otherwise
have been eligible for assistance (e. g. reimbursing costs of
instructional time for students who lost school time after the terrorist
attacks). The major uses for this funding are as follows:

$1.7 billion for debris removal operations and insurance.

$2.8 billion to repair and upgrade the transportation infrastructure of
Lower Manhattan.

$0.6 billion to the New York City Police and Fire Departments for such
purposes as emergency efforts and replacing destroyed vehicles.

$0.3 billion to miscellaneous city agencies for a wide range of activities
(e. g., instructional time for students and building cleaning).

$0.7 billion for non- New York City agencies for many purposes (e. g.
office relocations and repair of damaged buildings).

$1.2 billion available on June 30, 2003, for public assistance- related
reimbursements to New York City and state (work to be decided).

The provision of public assistance to the New York City area differed in
three significant ways from FEMA*s traditional approach.

Differences in This Public Assistance Approach FEMA and New York City
officials agreed that FEMA*s public assistance approach in the New York
City area creates uncertainties regarding the delivery of public
assistance in the event of another major terrorist event. They differed on
the effectiveness of using the public assistance program as currently
authorized as the vehicle for federal disaster response to a future

major terrorist event. Key New York City officials said that the program
needed major revisions, while FEMA officials said it worked well along
with the congressional prerogative to provide additional assistance.
Nevertheless, FEMA has begun to consider ways to redesign the program to
make it better able to address all types and sizes of disasters, including
terrorist attacks. The terrorist attacks on New York City created the most
costly disaster in U. S. history. In response, the President pledged at
least $20 billion in aid to the city. Approximately $7. 4 billion of this

aid is being provided through the Federal Emergency Management Agency*s
(FEMA) public assistance program, which provides grants to

state and local governments to respond to and recover from disasters. The
Senate Committee on the Environment and Public Works requested that GAO
determine (1) what activities FEMA supported in the New York City

area through its public assistance program after the terrorist attacks;
(2) how the federal government*s response to this terrorist event differed
from FEMA*s traditional approach to providing public assistance in past
disasters; and (3)

what implications FEMA*s public assistance approach in the New York City
area may have on the delivery of public assistance should

other major terrorist attacks occur in the future. www. gao. gov/ cgi-
bin/ getrpt? GAO- 03- 926. To view the full product, including the scope

and methodology, click on the link above. For more information, contact
JayEtta Z. Hecker at (202) 512- 2834 or heckerj@ gao. gov. Highlights of
GAO- 03 -926, a report to the

Committee on Environment and Public Works, U. S. Senate

August 2003

DISASTER ASSISTANCE

Information on FEMA*s Post 9/ 11 Public Assistance to the New York City
Area

Page i GAO- 03- 926 Disaster Assistance Letter 1 Results in Brief 4
Background 7 $7.4 Billion in Public Assistance- Related Funding Provided
for

Broad Range of Activities 11 Debris Removal Operations and Insurance 12
Interagency Agreement for Lower Manhattan Transportation System
Reconstruction 16 NYC Police and Fire Department Reimbursements 18
Reimbursements to Other NYC Government Agencies 19 Reimbursements to Non-
NYC Government Agencies 21 Reimbursements for Public Assistance- Related
Work Authorized

by Congress 23 Public Assistance to NYC Differed from the Traditional FEMA
Response in Several Areas 24 No Sharing of Public Assistance Costs by
State or Local Governments 24 Different Processes for Selecting Projects
and Closing Out the Disaster Based on Capped Funding Amounts 26 Size and
Type of Work Was Different Than Work in Other Major Disasters 27 Response
to NYC Area Creates Uncertainties about How Assistance Would be Delivered
in a Future Catastrophic Terrorist Event 32 Conclusions 35 Agency Comments
36 Appendix I Scope and Methodology 37

Appendix II Comments from the Federal Emergency Management Agency 40

Appendix III GAO Contacts and Staff Acknowledgments 42 GAO Contacts 42
Acknowledgments 42 Contents

Page ii GAO- 03- 926 Disaster Assistance Table

Table 1: Ten Projects We Reviewed and Applicant Organizations Interviewed
for Each of Them 38 Figures

Figure 1: Distribution of $7.4 Billion in Public Assistance and Public
Assistance- Related Funding 4 Figure 2: Public Assistance Funding Provides
the Largest Federal

Contribution to the NYC Area*s Recovery 10 Figure 3: Public Assistance-
Funded Debris Removal Operations 14 Figure 4: Debris Screening and
Inspection Operations 15 Figure 5: Interagency Agreement Will Fund
Construction of a Permanent New Station to Replace the Extensively Damaged
PATH Station Beneath the World Trade Center Towers 18 Figure 6: Public
Assistance Funded Police and Firefighter Overtime

and Replaced Emergency Vehicles That Were Destroyed in the Terrorist
Attacks 19 Figure 7: NYC Agencies Received Public Assistance Funding for a

Range of Work Including Cleaning Dust from Buildings 21 Figure 8: Port
Authority Received Public Assistance Funding to Restore Tunnels That Were
Flooded in the Terrorist Attacks 22

Page iii GAO- 03- 926 Disaster Assistance Abbreviations DHS Department of
Homeland Security

DOT Department of Transportation EPA Environmental Protection Agency FEMA
Federal Emergency Management Agency FTA Federal Transit Agency NEMIS
National Emergency Management Information System NYC New York City OMB
Office of Management and Budget PATH Port Authority of New York and New
Jersey

This is a work of the U. S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

Page 1 GAO- 03- 926 Disaster Assistance

August 29, 2003 The Honorable James M. Inhofe Chairman The Honorable James
M. Jeffords Ranking Minority Member Committee on Environment and Public
Works United States Senate

The Honorable George V. Voinovich The Honorable Hillary Rodham Clinton
United States Senate The September 11, 2001, terrorist acts were the most
destructive and costly terrorist events* in terms of lives lost, physical
damage, emotional trauma, and economic hardship* that this country has
ever experienced.

In New York City (NYC), the attacks killed almost 3,000 people, injured
thousands more, and leveled 16 acres of Lower Manhattan, including the
World Trade Center Towers and other buildings on or around the World Trade
Center site. The attacks also disabled major electrical and communications
facilities and the transportation infrastructure in the Lower Manhattan
area and left many residents temporarily homeless and thousands
unemployed. To help NYC respond to and recover physically, emotionally,
and

economically from the damages it incurred, the President pledged and
Congress appropriated over $20 billion in federal assistance. Today, less
than 2 years after the terrorist attacks, the rubble that was the World
Trade Center is gone and rebuilding efforts have started. The Federal
Emergency Management Agency (FEMA) led the federal response. 1 Total FEMA
funding for several programs it administered to help NYC area

accounts for about $8.8 billion of the $20 billion in federal assistance,
making this the largest disaster response in the agency*s history. In only

1 In March 2003, FEMA and its approximately 2, 500 staff became part of
the Department of Homeland Security (DHS). Most of FEMA* including its
disaster assistance efforts* is now part of the Department*s Emergency
Preparedness and Response Directorate; however, it has retained its name
and individual identity within the department. We therefore refer to FEMA
in this report.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 926 Disaster Assistance

six other disasters had FEMA provided more than $1 billion in assistance,
the largest of them being the Northridge earthquake in California in 1994.
2 FEMA*s public assistance program was the largest federal disaster effort

to the NYC area, totaling $7.4 billion. 3 This program is designed to
provide federal disaster grants to eligible state and local government
agencies and specific types of private nonprofit organizations. It funds
eligible

*emergency work,* such as responses by local emergency personnel and
debris removal, and *permanent work,* such as the repair, replacement, or
restoration of disaster- damaged facilities, as authorized by the Robert
T. Stafford Disaster Relief and Emergency Assistance Act. 4 FEMA is
expected to provide about $7.4 billion to the NYC area through the public
assistance

program and public assistance- related spending directed by Congress,
making FEMA*s public assistance funding the largest single federal
disaster aid effort to the NYC area. 5 You asked us to review several
aspects of the federal government*s

response and recovery efforts. Since FEMA*s public assistance program was
the largest federal assistance program to help the New York City area, we
agreed to identify what activities were funded and the possible
implications of this public assistance response to any major terrorist
events that may occur in the future. Specifically, we agreed to provide
information on (1) what activities FEMA supported in the NYC area with its
public assistance program after the terrorist attacks, (2) how the

2 The six other disasters for which FEMA spent more than $1 billion were
caused by earthquakes, hurricanes, or floods. These six disasters are: $6.
99 billion for the Northridge Earthquake, Calif. (1994); $2. 25 billion
for Hurricane Georges, Ala., Fla., La., Miss., P. R., V. I. (1998); $1.84
billion for Hurricane Andrew, Fla., La. (1992); $1. 13 billion for
Hurricane Hugo, N. C., S. C., P. R., V. I. (1989); $1. 14 billion for
Midwest Floods, 9 Midwestern states

(1993); and $1.08 billion for Hurricane Floyd, 13 Eastern Seaboard states
(1999). 3 The term *public assistance* is also used for unrelated
government programs administered by other agencies. For example, in the
Department of Health and Human Services, public assistance refers to
benefits for low- income individuals. For this report, public assistance
refers to the FEMA program.

4 Pub. L. No. 93- 288, 88 Stat. 143 (1974), as amended. The Stafford Act
authorized the public assistance program that gives FEMA authority to
provide assistance, defines basic program criteria and eligibility, and
authorizes FEMA to publish regulations.

5 In the Consolidated Appropriations Resolution for fiscal year 2003,
Congress authorized the state and NYC to use funds appropriated to FEMA
for disaster relief for costs associated with the World Trade Center
attacks that are not reimbursable under the Stafford Act. We refer to
these funds as public assistance- related because they are used for
projects in the public domain that are not related to hazard mitigation.

Page 3 GAO- 03- 926 Disaster Assistance

federal government*s response to this terrorist event differed from FEMA*s
traditional approach to funding public assistance in past disasters, and
(3) what implications FEMA*s public assistance approach in the NYC area
may have on the delivery of public assistance should other major terrorist
attacks occur in the future. We also agreed to provide a separate report
on the overall federal disaster assistance given to help the NYC respond
to

and recover from the terrorist attacks. That report will be provided to
you later this year.

To address our objectives, we reviewed disaster- related project
documentation, and we analyzed management information system data on the
public assistance FEMA provided and its cost. We reviewed approaches FEMA
traditionally used to fund major natural disasters and the staffing and
coordination processes it used to deliver the assistance and compared them
to approaches used in the aftermath of the World Trade Center attacks.
Using a structured data collection and interview instrument, we reviewed
decisions FEMA made on funding applications for 10 projects that were
nontraditional when compared to the types of work funded in the aftermath
of previous major natural disasters. We also interviewed FEMA, NYC, and
nonprofit organization officials about the assistance provided and the
challenges FEMA faced in delivering public assistance. We asked these
officials their views on whether differences in the approach to delivery
of public assistance in the NYC area demonstrated a need for a new
approach to providing public assistance

should another major terrorist event occur in the future. Our scope and
methodology are discussed in greater detail in appendix I.

Page 4 GAO- 03- 926 Disaster Assistance

FEMA supported a wide range of activities for the NYC area with its public
assistance program. The approximately $7.4 billion in funding was
distributed to major categories of recipients. (See fig. 1.)

Figure 1: Distribution of $7.4 Billion in Public Assistance and Public
AssistanceRelated Funding

Note: $0.08 million in grant administration costs are not reflected in the
graph but are part of the total public assistance- related spending.
Percentages do not total 100 percent because these costs are not included
and due to rounding. a Includes the NYC Departments of Sanitation and
Design and Construction, and the U. S. Army

Corps of Engineers. b Excludes the NYC Departments of Police, Fire,
Sanitation, and Design and Construction.

Reimbursements to these four departments are shown under Debris Removal
Operations & Insurance and NYC Police and Fire Departments. c Includes New
York state agencies, nonprofit organizations, and the Port Authority of
New York and

New Jersey.

Debris removal operations (costing about $0.7 billion) involved removing,
screening, and disposing of 1.6 million tons of debris. The establishment
of an insurance company to cover possible claims resulting from debris
removal operations is projected to cost about $1 billion. The largest
Results in Brief

8.1% 37.9%

16.3% 23.0%

9.5%

Source: GAO analysis of FEMA data. Interagency agreement for

transportation system reconstruction ($ 2.8 billion)

NYC Police & Fire Departments ($ 0.6 billion) Debris removal operations
and insurance a

($ 1.7 billion)

4.1%

NYC government agencies b ($ 0.3 billion) Non- NYC government agencies c
($ 0.7 billion) Public assistance- related work authorized after 6/ 03 ($
1.2 billion)

Page 5 GAO- 03- 926 Disaster Assistance

individual amount of FEMA*s public assistance funds*$ 2.8 billion or 38
percent* will be used jointly with additional funds from the U. S.
Department of Transportation to repair and upgrade the transportation
infrastructure* including streets, subway systems, and commuter railways*
damaged in the disaster. Reimbursements for NYC Police and Fire
Departments* emergency efforts, pensions, and vehicle and equipment

losses amounted to $0.6 billion. The $0.3 billion in reimbursements to NYC
agencies other than the Departments of Design and Construction,
Sanitation, Police and Fire were for various activities such as exterior
building cleaning, rescheduling elections, and DNA testing to identify
victims. Another $0.7 billion provided to non- NYC government agencies*
such as New York state agencies, nonprofit organizations, and the Port
Authority of New York and New Jersey* was to reimburse these agencies for,
among other things, relocating offices and supporting some

transportation projects that were not covered in transportation efforts
listed above. Lastly, $1.2 billion was made available in June 2003 as a
result of FEMA*s early close out of its traditional public assistance
program to NYC and state for congressionally authorized costs associated
with the terrorist attacks. Most of these costs would not have been
eligible for reimbursement under FEMA*s traditional public assistance
program. To receive the $1.2 billion reimbursement for public assistance-
related costs, FEMA officials reported that NYC and state officials must
prepare traditional grant applications to document that disaster- related
costs have been incurred, however Congress authorized a much wider scope
of costs

that could be reimbursed than are authorized under the Stafford Act. As we
concluded our review, the list of projects to be funded had not been
determined, but NYC and state had requested reimbursements for heightened
security in the aftermath of the terrorist attacks and cost- ofliving
adjustments to pensions of the survivors of fire fighters and police
officers killed in the line of duty in the terrorist attacks. A
reimbursement had been made for a public awareness campaign called *I Love
New York,* which was designed to attract visitors back to the city after
the terrorist attacks.

While FEMA followed traditional processes for considering most
applications, public assistance provided to the NYC area after the
terrorist attacks differed significantly in three major ways from FEMA*s
traditional approach. First, FEMA did not require state or local
governments to provide a share of federally provided disaster response and
recovery costs. Typically, FEMA*s public assistance program shares
disaster costs burdens, with FEMA providing 75 percent of the costs* the
minimum provided for under the Stafford Act* and affected state and local
governments paying the remaining share. At the direction of the President,

Page 6 GAO- 03- 926 Disaster Assistance

FEMA provided 100 percent of all public assistance costs in the NYC area.
This was the first time an entire FEMA public assistance operation was 100
percent federally funded. The second distinct aspect of FEMA*s public
assistance to New York was that there was a funding target that became a
cap on the level of the assistance. As a result, the public assistance
program did not follow customary project selection and close out
processes. Consistent with the President*s and Congress* commitment of
approximately $20 billion in disaster assistance to New York, FEMA
operated with a set spending level appropriated by Congress that it did
not exceed for all public assistance- related work for the NYC area. In
contrast, in prior disasters all applications for public assistance that
FEMA determined to be eligible under the provisions of the Stafford Act
were funded. Also, FEMA closed out public assistance funding for the World
Trade Center disaster in June 2003, releasing money that had not been
spent to NYC and state officials to use at their discretion for
disasterrelated expenditures. A FEMA official said that no prior disaster
had been closed out in this manner before work had been completed. Third,
the size and type of work funded was quite different from the public
assistance provided after prior major natural disasters. FEMA determined
some nontraditional work was eligible for its public assistance program
using flexible interpretations of the Stafford Act. For example, public
assistance has traditionally been limited to coverage of disaster- related
losses and damages* restoring, but not improving, existing infrastructure.
However, FEMA officials said that they broadly interpreted the Stafford
Act to allow funding that will not only to rebuild transportation systems
that were damaged from the terrorist attacks, but may also improve the
overall transportation system in Lower Manhattan. For example, within the
FEMA/ Department of Transportation interagency agreement, work has been
proposed to construct a new transit station to replace the existing but
undamaged Fulton Street station to improve the overall flow of commuter
traffic. Congress also authorized FEMA to fund other disasterrelated work,
some of which would not have been eligible for assistance under the
Stafford Act. As a result of the June 2003 close out of the public
assistance program, $1.2 billion in funds that had not been spent for
traditional public assistance work was made available to the city and
state of New York for broader purposes authorized by Congress. For
example, NYC plans to use FEMA funds to cover some of the costs of
heightened security after the attacks. These distinct aspects of FEMA*s
public assistance response in the NYC

area compared to public assistance responses delivered after previous
major disasters create uncertainties about the delivery of public
assistance should there be another catastrophic terrorist attack in the
future. FEMA

Page 7 GAO- 03- 926 Disaster Assistance

and NYC officials who managed the disaster recovery efforts agreed that
the decisions made in New York would likely be considered if terrorists
struck again, and that it is uncertain whether an approach similar to the
one that evolved in NYC would be followed. Furthermore, NYC and FEMA
officials differed on how well the public assistance program, as
authorized by the Stafford Act, serves as the federal government*s vehicle
for delivering this type of assistance. The NYC officials we interviewed
did not think that the current program fully addressed the needs of the
city. They said it should not be used to respond to major terrorist events
unless it is significantly amended to address what they believe are unique
challenges in aligning disaster assistance with the consequences of a
terrorist

incident; these concerns include long- term environmental liabilities and
the need for heightened security efforts in the immediate aftermath of a
terrorist attack. In contrast, FEMA officials said that they were
generally satisfied that the Stafford Act provides the necessary
flexibility for

responding to terrorist attacks since Congress may authorize additional
assistance to disaster- affected areas to address specific and unique
needs, as it did for the NYC area. As we were completing our audit work,
FEMA established a working group to look at ways to redesign the public
assistance program to meet community needs for all types and sizes of
disasters in the future, including those resulting from terrorist events.
This group expects to provide an initial concept for revising the program
by September 30, 2003.

In commenting on a draft of this report, the Acting Director of FEMA*s
Recovery Division said that FEMA officials are proud of the agency*s
response in delivering public assistance programs to NYC and state, and
that they are satisfied that FEMA*s authority was adequate and flexible
enough in most circumstances to meet the response and recovery needs of
New York. FEMA*s comments are reprinted in appendix II. FEMA also

provided technical comments on our draft, which we incorporated into the
report where appropriate.

Under the Stafford Act, when a major natural catastrophe, fire, flood, or
explosion occurs that is beyond the capabilities of a state and local
government response, the President may declare that a major disaster
exists. This declaration activates the federal response plan for the
delivery of federal disaster assistance. The response plan is an agreement
signed by 27 federal departments and agencies, including the American Red
Cross.

Under the Stafford Act, FEMA is responsible for coordinating both the
federal and private response efforts. President Jimmy Carter established
FEMA in 1978 to consolidate and coordinate emergency management Background

Page 8 GAO- 03- 926 Disaster Assistance

functions in one location, addressing concerns about the lack of a
coordinated federal approach to disaster relief. FEMA most recently
redesigned its public assistance program in 1998. The federal assistance

coordinated by FEMA is designed to supplement the efforts and available
resources of state and local governments and voluntary relief
organizations. 6 While FEMA had the lead in coordinating the federal
response to the

attacks on NYC, other federal agencies, including the Department of
Transportation (DOT), the Small Business Administration (SBA), the U. S.
Army Corps of Engineers, and the Environmental Protection Agency (EPA)
also provided significant assistance. The disaster declaration from

the President triggers not only a role for FEMA as coordinator of the
federal emergency response plan, but also a role in delivering assistance
through several programs it administers. These programs include individual
assistance to victims affected by a disaster and hazard mitigation funds
to state and local governments to take steps to prevent future disasters.
However, FEMA*s public assistance program is typically its largest
disaster assistance effort. It is designed to provide grants to

eligible state and local government agencies and specific types of private
nonprofit organizations that provide services of a governmental nature,
such as utilities, fire departments, emergency and medical facilities, and
educational institutions, to help cover costs of emergency response
efforts and work associated with recovering from the disaster. According
to FEMA regulations, work eligible for public assistance must be

 to repair damage that occurred as a result of a declared event, 
located within an area declared by the President as a disaster area, and 
the legal responsibility of an eligible applicant.

The Stafford Act sets the federal share for the public assistance program
at no less than 75 percent of eligible costs of a disaster with state and
local governments paying for the remaining portion. The assistance is to
be provided to repair, restore, reconstruct, or replace eligible
facilities. The

6 In a December 2002 report, we discussed charitable organizations*
contribution to the disaster relief efforts in the NYC area and the need
for a greater FEMA role in facilitating collaboration among these
organizations. U. S. General Accounting Office, September 11: More
Effective Collaboration Could Enhance Charitable Organizations*
Contributions in Disasters, GAO- 03- 259 (Washington, D. C.: Dec. 19,
2002).

Page 9 GAO- 03- 926 Disaster Assistance

amount of public assistance provided is reduced by, among other
considerations, insurance proceeds and salvage value. Because the
assistance provided by the program is limited by these factors, as well as
certain eligibility criteria, the amount of public assistance funds FEMA
provides in a disaster does not equal the total financial impact of a
disaster on an affected community or area.

The Stafford Act has been amended several times since its enactment in
1974, and FEMA has taken steps over the years to redesign its public
assistance program with internal policy changes to make eligibility
criteria for public assistance clearer, and more consistent and accurate.
The

Senate report on the Disaster Mitigation Act of 1999 noted that the
congressional interest in reducing the federal cost of disaster assistance
would be achieved by, among other things, reducing the types of facilities
and activities that may receive assistance in the event of a disaster. 7
In August 2001, we reported that in a period of about 2 years since FEMA
had completed a 1998 redesign of the public assistance program, it had
developed or revised public assistance program policies in 35 areas or
topics in part to make clearer eligibility criteria and improve the
consistency and accuracy of eligibility determinations for individual
projects. 8 FEMA*s public assistance program is the largest portion of the
federal

assistance provided to New York in the aftermath of the World Trade Center
attacks. Of a total of over $20 billion in federal assistance approved for
this disaster, either in the form of direct assistance or in the form of
tax benefits, about $7.4 billion was funded through FEMA*s public
assistance program or through public assistance- related spending
authorized by Congress through appropriations to FEMA. Figure 2 shows that
FEMA*s public assistance program is providing the largest single portion
of the federal contribution to the NYC area*s disaster recovery effort.

7 Senate Report 106- 295. 8 U. S. General Accounting Office, Disaster
Assistance: Improvement Needed in Disaster Declaration Criteria and
Eligibility Assurance Procedures, GAO- 01- 837 (Washington, D. C.: Aug.
31, 2001).

Page 10 GAO- 03- 926 Disaster Assistance

Figure 2: Public Assistance Funding Provides the Largest Federal
Contribution to the NYC Area*s Recovery

Note: Percentages do not total 100 percent due to rounding. a Includes the
Department of Health and Human Services, Department of Labor, and SBA.

b DOT funds are to assist in rebuilding and improving the transportation
infrastructure. c HUD funds are to be used for a variety of purposes,
including assistance to businesses and individuals, infrastructure
restoration, and economic recovery. d Estimate by the Joint Congressional
Committee on Taxation in March 2002 of the cost of the Liberty

Zone tax package to the federal government. The cost of the tax package in
lost revenues to the federal government will not be precisely determined
because data is not available. The package contains provisions designed to
spur economic revitalization in Lower Manhattan.

FEMA may assign work or enter into agreements with other federal agencies
and the American Red Cross to handle aspects of public assistance within
their areas of expertise. These agreements are called mission assignments
and interagency agreements. Mission assignments

were widely used in the first few months after the World Trade Center
disaster to provide assistance for short- term projects. Interagency
agreements* used for long- term projects* are similar to mission
assignments in that they are funding agreements between agencies to
provide goods and services on a reimbursable basis.

FEMA public assistance- related funding ($ 7.4 billion)

24.5% 11.8%

17.2% Housing and Urban Development (HUD) funding c ($ 3.5 billion)

Liberty zone tax package d ($ 5.0 billion)

6.4%

FEMA individual and nonpublic assistance- related funding ($ 1.3 billion)

DOT funding b ($ 2.4 billion)

3.9%

Other federal agency a funding ($ 0.8 billion) Source: GAO analysis of
FEMA and Congressional Budget Office data.

36.3%

Page 11 GAO- 03- 926 Disaster Assistance

In March 2003, FEMA and its responsibilities were placed entirely into DHS
in the largest reorganization of the federal government since the
formation of the Department of Defense. The Emergency Preparedness and
Response Directorate within DHS has responsibility for the public
assistance program and continues to be referred to as FEMA, which we do in
this report. 9 The approximately $7.4 billion of public assistance and
public assistancerelated

work funded through FEMA is providing a broad range of aid to the NYC
area. For example, public assistance- related funding was, or will be,
provided to reimburse NYC authorities for immediate response and recovery
actions* such as debris removal operations and emergency efforts by the
NYC Departments of Design and Construction, Sanitation, Fire, and Police*
and for long- term actions to repair and upgrade damaged facilities and
transportation systems. Because of the unique nature of the NYC disaster,
existing FEMA data system categories for tracking and reporting public
assistance do not provide for some of the large public assistance- related
efforts. 10 Based on our analysis, we categorize the public assistance and
related funding for NYC into six general areas:

9 FEMA*s Office of National Preparedness, which is responsible for
terrorism preparedness and response, was placed in the Border and
Transportation Security Directorate. This placement was designed to
achieve a measure of consolidation with preparedness functions from other
agencies. However, as we reported in our Performance and Accountability
Series in January, 2003, other disaster preparedness and response efforts

will be in the Emergency Preparedness and Response Directorate and close
coordination will be needed among these groups to ensure that problems of
duplication, overlap, and confusion that occurred in the past are not
replicated. U. S. General Accounting Office,

Major Management Challenges and Program Risks: Federal Emergency
Management Agency, GAO- 03- 113 (Washington, D. C.: January 2003).

10 FEMA*s categories for public assistance work are (1) debris removal,
(2) emergency protective measures, (3) road and bridge systems, (4) water
control facilities, (5) public buildings and equipment, (6) public
utilities, and (7) recreation and other. However, some large public
assistance efforts funded in NYC did not fit well within the standard
categories. For example, a $64.6 million application to cover increased
NYC contributions

to the retirement system due to the line- of- duty deaths of police and
fire fighters in the terrorist attacks was classified as an emergency
protective measure, and a FEMA official noted that the *recreation and
other* category was used to classify reimbursements that did not fit in
other categories. For example, funding to provide additional school time
for students who lost instructional time as a result of the terrorist
attacks was classified as

*recreational or other.* For this reason, we did not use the FEMA
categories for our analysis. $7.4 Billion in Public

Assistance- Related Funding Provided for Broad Range of Activities

Page 12 GAO- 03- 926 Disaster Assistance

 debris removal operations and insurance;  reconstruction of the Lower
Manhattan transportation infrastructure

under an interagency agreement with DOT;  reimbursement of police and
fire department costs;  reimbursement of expenses incurred by NYC
agencies other than the

Departments of Design and Construction, Sanitation, Police and Fire for
such activities as DNA and forensic testing to identify victims and
exterior building cleaning;

 reimbursement of expenses to agencies that are not part of the NYC
government (i. e., New York state agencies, the Port Authority, and
private non profits) for disaster- related costs such as transportation
work not covered under the interagency agreement discussed above; and

 reimbursement of public assistance- related expenses authorized by
Congress that would not otherwise have been eligible for assistance (i. e.
heightened security after the terrorist attacks) from funds made available
after the June 30, 2003, close out of the traditional public assistance
program.

Refer to figure 1 on page 4 for a graphic illustration of how public
assistance funding to the NYC area was or will be distributed within these
six categories.

Each category of public assistance funding and some of the major efforts
funded in each of them, are described in the following sections.

FEMA funded about $1.7 billion in work related to debris removal
operations and to reimburse the NYC Departments of Design and Construction
and Sanitation for debris removal expenses. The most significant and
costly activities in this category were removing and disposing of the
destroyed World Trade Center buildings, screening debris for victims*
remains and personal effects, and establishing an insurance

company for possible claims resulting from debris removal operations.
Workers spent an estimated 3.1 million hours over 9 months to remove about
1.6 million tons of debris from the World Trade Center site. Debris from
the collapse of the World Trade Center towers extended 7 stories into the
earth and more than 11 stories high at Ground Zero. Thick dust Debris
Removal

Operations and Insurance

Page 13 GAO- 03- 926 Disaster Assistance

covered streets, buildings, and vehicles for blocks around the site. FEMA
provided $620.9 million for removing the debris from the World Trade
Center site and barging it to a landfill in Staten Island, N. Y., for
screening, sorting, and disposal. Original estimates projected that the
recovery effort and cleanup would take 2 years and $7 billion. Figure 3
shows debris removal and barging operations.

Page 14 GAO- 03- 926 Disaster Assistance

Figure 3: Public Assistance- Funded Debris Removal Operations

The need to sort and screen the debris to recover the remains and personal
effects of victims and criminal evidence made the debris removal operation
even more difficult. FEMA provided $72 million to the U. S. Army

Source: FEMA Photo Library. Debris removal contractors survey the piles of
debris, estimated at 1.6 million tons, at the site where the World Trade
Center towers once stood.

Source: FEMA Photo Library. FEMA- funded debris removal efforts are in
progress at the World Trade Center about a month after the terrorist
attacks.

Source: FEMA Photo Library. Two 500- ton floating cranes continue debris
removal operations, loading wreckage onto barges to be towed to a city
landfill in Staten Island, N. Y., for screening, inspection, and disposal.

Page 15 GAO- 03- 926 Disaster Assistance

Corps of Engineers to manage the debris inspection at the landfill. The
sorting activities were an intense, meticulous effort to recover remains
and personal belongings of victims to return them to their families and to
gather criminal evidence related to the terrorist attacks. The Corps of
Engineers provided labor, heavy equipment, conveyer belts, and screening
equipment. The Corps also provided temporary buildings for storage and to
shelter workers, worker decontamination facilities, and food service
facilities. Figure 4 shows debris screening and inspection operations at
the landfill.

Figure 4: Debris Screening and Inspection Operations In addition to the
costs of debris removal and disposal, FEMA set aside $1 billion to
establish a debris removal insurance company to cover contractors and NYC
for liability claims resulting from debris removal operations. 11
According to city officials, private contractors came to Ground Zero to do
search and rescue, recovery, and debris removal work

11 FEMA was authorized to do so by the Consolidated Appropriations
Resolution of 2003, Pub. L. No. 108- 7. $1 billion is a projected cost,
but actual costs will be unknown for many years.

Source: FEMA News Photo. Source: U. S. Army Corps of Engineers. Two views
of inspectors at work at the city landfill in Staten Island, N. Y.,
screening through mixed debris for victims* remains and personal effects
and criminal evidence.

Page 16 GAO- 03- 926 Disaster Assistance

in the immediate aftermath of the terrorist attacks before entering into
formal contract agreements with NYC. The outstanding issue that kept the
contractors and NYC from reaching a final agreement on compensation for
the work done was liability insurance coverage. City officials said that
liability insurance could not be obtained from a private insurance company
because of the unknown risks and potentially large number of liability
claims. Based on input from insurance experts, city officials and FEMA
determined that the best solution was to establish an insurance company
with $1 billion in federal capital to provide $1 billion in coverage for a
payout period of up to 25 years. The insurance fund will cover NYC workers
and contractor employees. As of June 2003, the details of the insurance
coverage had not been finalized. Additional perspectives on how aspects of
FEMA*s establishment of the insurance fund differed from a traditional
public assistance activity can be found on page 30 of this report.

FEMA provided $2.8 billion to help fund an interagency agreement with the
DOT to reconstruct the Lower Manhattan transportation system. The
terrorist attack at the World Trade Center severely damaged the intermodal
public transportation system that was used by about 80 percent of the
350,000 daily commuters to Lower Manhattan* the highest

percentage of people commuting to work by public transit of any commercial
district in the nation. The Port Authority of New York and New Jersey
(Port Authority) commuter station underneath the World Trade Center was
destroyed, and subway stations servicing the area were sufficiently
damaged to prevent trains from stopping at them. In addition, some tunnels
were temporarily closed, preventing commuter buses from

entering Lower Manhattan. Access to and mobility within Lower Manhattan
was severely diminished. Many streets were closed due to debris from the
collapsed buildings and the subsequent debris removal operations. Large
rescue vehicles and heavy debris removal equipment also damaged the area
streets, making them more difficult to navigate.

Plans are underway to rebuild and improve the Lower Manhattan
transportation system with funding from FEMA and DOT. These agencies,
under an interagency agreement, will contribute $4.6 billion to these

transportation system projects, with FEMA providing $2.8 billion and DOT
providing an additional $1.8 billion. The agreement will result in not
only rebuilding a system that was damaged, but also improving the overall
Lower Manhattan transportation system. The agreement designated DOT*s
Federal Transit Administration (FTA) as the lead agency in charge of
Interagency

Agreement for Lower Manhattan Transportation System Reconstruction

Page 17 GAO- 03- 926 Disaster Assistance

administering the federal assistance and coordinating with state and local
implementing agencies.

In February 2003, the Governor of New York submitted funding requests to
FEMA and DOT for three priority projects estimated to cost between $2. 55
billion and $2.85 billion* the World Trade Center Transportation Hub,
Fulton Street Transit Center, and South Ferry Subway Station to improve
the overall flow of commuter traffic in lower Manhattan. Although the uses
for the remaining $1.7 billion to $2.0 billion of the $4.6 billion in
FEMA/ DOT funds had not been determined as of June 2003, uses for the

remaining funds being evaluated included improvements in access to JFK
Airport and Long Island, improvements to West Street Route 9A, a tour bus
facility, the World Trade Center sub grade infrastructure, and commuter
ferries and street configuration work.

Figure 5 shows the extensive damage to the PATH commuter station beneath
the World Trade Center Towers after the terrorist attacks and a model of
the permanent station planned to be constructed in its place with FEMA/
DOT interagency agreement funds.

Page 18 GAO- 03- 926 Disaster Assistance

Figure 5: Interagency Agreement Will Fund Construction of a Permanent New
Station to Replace the Extensively Damaged PATH Station Beneath the World
Trade Center Towers

FEMA is also funding transportation- related work for the Port Authority
outside of the scope of this interagency agreement. This work is discussed
on page 21 of this report. We provide additional perspective on how
aspects of this interagency agreement differ from FEMA*s traditional
public assistance response to major disasters on page 28 of this report.

FEMA provided about $643 million in assistance to the NYC Police and Fire
Departments to pay benefits and wages to emergency workers during response
and recovery efforts and to replace vehicles and equipment. As first
responders, these departments suffered heavy casualties and damages in the
collapse of the twin towers of the World Trade Center: 343 NYC fire
department employees, 23 active city police officers, and 5 retired city

police officers died in the line of duty, and 238 emergency vehicles, as
well as radios and other equipment were lost or destroyed. In the months
after the attack, nearly 100 firefighters per shift worked at the disaster
site around the clock standing over contractor- operated steel- ripping
machines looking for victims* remains. Similarly, police officers were
stationed 24 hours a day, 7 days a week to provide security at the
disaster site. Figure 6 NYC Police and Fire

Department Reimbursements

Source: FEMA News Photo. The PATH train station beneath the World Trade
Center Towers was severely damaged in the attacks. A new permanent station
will be constructed within the FEMA/ DOT interagency agreement. Source:
Port Authority of N. Y. and N. J.

A model of the permanent station to be designed and constructed within the
FEMA/ DOT interagency agreement in place of the damaged facility.

Page 19 GAO- 03- 926 Disaster Assistance

includes photographs of police and firefighters during the search and
rescue phase of work immediately after the terrorist attacks and 2 of the
emergency vehicles that were destroyed in the World Trade Center collapse.

Figure 6: Public Assistance Funded Police and Firefighter Overtime and
Replaced Emergency Vehicles That Were Destroyed in the Terrorist Attacks

Public assistance grants to these two city agencies included $341 million
for police overtime and death benefits and $223 million for firefighter
overtime, death benefits, and funeral costs. Grants also reimbursed
emergency service departments $44 million to replace 98 firefighter
vehicles, radios, and other equipment; and $26 million to replace 140
police emergency vehicles and emergency equipment that were destroyed in
the terrorist attacks.

Although the NYC Departments of Design and Construction, Sanitation, Fire,
and Police were the city agencies that received the largest amounts of
FEMA public assistance funding for debris removal and insurance and for
emergency response losses and expenses related to the terrorist attacks,
FEMA also provided direct public assistance to a number of other NYC
agencies for a wide range of work totaling almost $300 million. Projects
included: Reimbursements to

Other NYC Government Agencies Source: FEMA News Photo. Police and
firefighters worked around the clock in the search and

rescue phase following the terrorist attacks. FEMA public assistance
reimbursed for overtime.

Source: New York Fire Department. Two of the emergency vehicles destroyed
when the World Trade Center towers collapsed. FEMA public assistance
reimbursed NYC the funds to replace emergency vehicles and equipment.

Page 20 GAO- 03- 926 Disaster Assistance

 $46.7 million to the Office of the Chief Medical Examiner for DNA
testing, forensic analysis and equipment to help identify victims of the
terrorist attacks;

 $8 million to the Department of Elections to reimburse the expenses it
incurred to reschedule elections that were being held on September 11,
2001, and to replace damaged voting equipment;

 $19.3 million to the NYC Department of Education to pay for
instructional time for students who missed school due to closures, delayed
openings, and school relocations 12 ; and

 $8.6 million to the NYC Department of Environmental Protection for
exterior building cleaning.

Other examples of funding that went to city agencies are $12.9 million to
the NYC Department of Citywide Administrative Services for emergency
supplies, equipment and services, and $10.6 million to set up the
facilities and provide equipment and furniture for the NYC Family Center
and reimburse city and state personnel for overtime at the Family Center
who provided services for NYC residents in the aftermath of the terrorist
attacks. Figure 7 shows the cloud of dust that covered buildings for
blocks around the World Trade Center.

12 Funding of $77 million was approved for the NYC Board of Education for
this purpose. As of April 2003, $19.3 million was. The remaining funds
were de- obligated from the project and directed to public assistance
related work authorized by Congress after the close out of the traditional
assistance program.

Page 21 GAO- 03- 926 Disaster Assistance

Figure 7: NYC Agencies Received Public Assistance Funding for a Range of
Work Including Cleaning Dust from Buildings

FEMA provided over $700 million in public assistance- related funding to
agencies that were not part of the NYC government, including the Port
Authority, state agencies, counties, and private nonprofit organizations.
Among the agencies receiving some of the largest amounts was the Port
Authority, which sustained substantial losses of lives and property as a
result of the terrorist attacks. The funding for the Port Authority was in
addition to the FEMA transportation funding provided in its interagency
agreement with DOT to rebuild and improve the Lower Manhattan
transportation system, as discussed on page 16.

FEMA reimbursed the Port Authority for a wide range of work including
$285.0 million to relocate offices that were located in the World Trade
Center, repair commuter train tunnels that were damaged in the terrorist
Reimbursements to

Non- NYC Government Agencies

Source: U. S. Environmental Protection Agency. Contaminant- filled dust
covered buildings in the blocks around the World Trade Center. FEMA
reimbursed the NYC Department of Environmental Projection for the exterior
cleaning of 244 buildings in Lower Manhattan.

Page 22 GAO- 03- 926 Disaster Assistance

attacks, implement emergency ferry services, open a temporary PATH
station, and pay overtime to the Port Authority police. The damage to the
Port Authority*s PATH train system was extensive; tunnels leading from the
station to New Jersey were flooded and the Exchange Place station in New
Jersey had to be closed because the station could not operate as a
terminal. All tunnel components (i. e., fiber optics, conduits, pipes,
lighting,

ductbanks, track, contact rail, and ballast) needed to be replaced. The
Port Authority also received public assistance funds to replace equipment
it lost when its World Trade Center facilities were destroyed, including
its voice telephone network, desktop computers, and fax and photocopy
machines, and to pay overtime labor costs for the emergency response.
Figure 8 shows PATH tunnel repair and construction efforts.

Figure 8: Port Authority Received Public Assistance Funding to Restore
Tunnels That Were Flooded in the Terrorist Attacks

FEMA also provided public assistance funds to many other non- NYC
government agencies to reimburse them for emergency and repair costs. For
example, the New York State Police received $45 million for security
operations, and New York University received $5.9 million for air
monitoring, environmental cleaning, and emergency supplies and services.
Other examples include the NYC Office of Emergency Management, which

Source: Port Authority of N. Y. and N. J. Ongoing efforts in June 2002 to
restore two 2- mile PATH tunnels under the Hudson River, connecting Lower
Manhattan and New Jersey. The tunnels were flooded as a result of the
terrorist attacks.

Source: Port Authority of N. Y. and N. J. As of March 2003, progress shows
in one PATH tunnel as the PATH Service Restoration project moves forward
to the goal of restoring service to Lower Manhattan in December 2003.

Page 23 GAO- 03- 926 Disaster Assistance

received $11.8 million from FEMA to replace destroyed equipment and leased
office space that was located in the World Trade Center; Pace University,
which was provided $4.4 million for damaged buildings; and

the Battery Park City Authority, which received $3.9 million to repair
damaged facilities.

Lastly, $1.2 billion was made available in June 2003 as a result of FEMA*s
early close out of its traditional public assistance program to NYC and
state for congressionally authorized costs associated with the terrorist
attacks. Most of these costs would not have been eligible for
reimbursement under FEMA*s traditional public assistance program. The
close out freed funds for discretionary public assistance- related uses by
NYC and state and ensured that FEMA would spend the entirety of the
appropriated assistance to the NYC area. Funds obligated for all of FEMA*s
programs, including individual assistance and hazard mitigation, were
reconciled, and funds that had not been expended for approved projects as
of April 2003 were de- obligated to be used for discretionary public
assistance- related expenditures. To receive the $1.2 billion
reimbursement for public assistance- related costs, FEMA officials
reported that NYC and state officials must prepare traditional grant
applications to document that disaster- related costs have been incurred;
however, Congress authorized wide discretion on the type of costs that
could be reimbursed.

As we concluded our review, the list of projects to be funded had not been
determined, but NYC and state had requested reimbursements for heightened
security in the aftermath of the terrorist attacks and cost- ofliving
adjustments to pensions of the survivors of firefighters and police
officers killed in the line of duty in the terrorist attacks. A $19
million reimbursement has been made for a public awareness campaign called
*I Love New York,* which was designed to attract visitors back to the city
after the terrorist attacks. We discuss the heightened security

reimbursements in more detail on page 32 of this report as an example of
funding that was different in scope than a typical public assistance
project and that would not have been eligible for FEMA funding unless it
was

specifically authorized by Congress. Reimbursements for

Public AssistanceRelated Work Authorized by Congress

Page 24 GAO- 03- 926 Disaster Assistance

Each disaster to which FEMA responds has aspects that make it unique from
other disasters, resulting in some differences in forms of assistance
provided to affected communities within the parameters of the Stafford Act
eligibility requirements, according to the head of FEMA*s public

assistance program. While FEMA followed traditional processes for
considering most applications, the public assistance response in the NYC
area after the terrorist attacks differed significantly from the
traditional

approach FEMA has used in providing assistance under the Stafford Act
after major natural disasters. The three significant differences were:

 the elimination of any local sharing of disaster response and recovery
costs,

 capped amounts of funding that resulted in significant modifications to
the project selection and close out processes, and

 the size and type of projects funded. Many of these differences are
based on presidential and congressional direction; however, some are the
result of FEMA*s interpretations of the Stafford Act to allow the approval
of funding for certain assistance to New York.

The Stafford Act sets the federal share for the public assistance program
at no less than 75 percent of eligible costs. The President can increase
the federal share for the public assistance program if it is determined
that the disaster costs greatly exceed a state*s financial capabilities.
In practice, the federal share has reached 100 percent for emergency work,
for limited periods of time, if determined that it was necessary to
prevent further damage, protect human lives, or both. In 1992, for
example, after Florida and Louisiana suffered large disaster expenses as a
result of Hurricane Andrew, FEMA funded 100 percent of all public
assistance costs above $10 per capita. 13 According to a FEMA official,
the 1994 Northridge, California earthquake, which cost almost $7.0
billion, was FEMA*s most costly disaster funding effort until the World
Trade Center attacks occurred; FEMA provided for 90 percent of all public
assistance costs. In discussing the question of state and local sharing of
public assistance costs, FEMA

13 Per capita personal income is commonly used in federal grant programs
as a basis for sharing program costs between states and the federal
government. Public Assistance to

NYC Differed from the Traditional FEMA Response in Several Areas

No Sharing of Public Assistance Costs by State or Local Governments

Page 25 GAO- 03- 926 Disaster Assistance

officials stated that they are reluctant to recommend a 100 percent
federal share for projects unless there are compelling reasons to do so
because the traditional process with a matching share creates incentives
for state and local officials to control costs and closely evaluate
projects.

In the days immediately following the terrorist attacks, the President
determined that the magnitude and nature of the disaster justified the
federal government funding the total cost of public assistance projects,
and he directed that FEMA fund 100 percent of the eligible costs with no
state or local matching funds. This increased FEMA*s costs and

significantly reduced costs to NYC and other recipients. For example, on
the transportation repair and improvements efforts, NYC area recipients
did not have to make a financial contribution that could have totaled
nearly $680 million* 25 percent of the $2.75 billion that FEMA is
providing.

Although New York received the benefits of 100 percent FEMA funding of
public assistance projects, the President reduced the amount of related
Hazard Mitigation Grant Program funds provided to New York. Created in
1988 by the Stafford Act, this grant program provides funds to communities
affected by major disasters to undertake mitigation measures following a
major disaster. At the time of the terrorist attacks, grants funds up to
15 percent of the total amount of FEMA assistance provided are available
to states following a disaster. 14 However, in this case, the President
limited the mitigation grant funds to 5 percent of the amount spent. Had
the hazard mitigation funding percentage not been reduced, more than $1.2
billion in mitigation funds would have been required using the customary
15 percent of total cost criteria.

14 The Consolidated Appropriations Resolution of 2003, Pub. L. No. 108- 7,
has since amended the Stafford Act to reduce the amount available for
mitigation grant funds to 7.5 percent. However, pursuant to the The
Disaster Mitigation Act of 2000, up to 20 percent of the total estimated
federal assistance amount is available for states that meet enhanced

planning criteria.

Page 26 GAO- 03- 926 Disaster Assistance

In a typical major disaster, FEMA*s consideration of whether work is
eligible for public assistance is not constrained by a limit on the total
amount of public assistance funding that can be spent, and disasters
remain *open* with FEMA until public assistance work is substantially
completed. Generally, FEMA officials approve all public assistance
applications that meet eligibility criteria under the Stafford Act, and
they fund the work from FEMA*s disaster relief fund. Also, according to a
FEMA public assistance official, direct congressional appropriations are
not typically made for a specific disaster. The official explained that
damaged facilities are identified within 60 days following a kick- off
meeting to begin federal disaster assistance between FEMA officials and
state and local officials of the area impacted by the disaster. Proposed
work is then considered for eligibility and funded through *project
worksheets** applications for specific funding amounts to complete
discrete work segments. Project worksheets document the scope of work,
cost estimates, locations, damage descriptions and dimensions, and special
considerations of each work segment. No limit is set on the dollar amount
of eligible work that can be approved. As the response and recovery
progresses, states reimburse applicants for all costs that meet the
Stafford Act*s public assistance eligibility criteria and FEMA reimburses
the states for the federal share. A public assistance official noted that
disasters remain open with FEMA long after public assistance funds have
been obligated. For example, as of June 2003, the Northridge, California,
earthquake was still an open FEMA disaster 9 years after it occurred due
to large and long- term reconstruction efforts. Disasters are *closed*
when the project is complete, the final costs are known, and all appeals
of funding decisions have been resolved.

Following the terrorist attacks, however, the process of selecting
projects that were eligible for funding and closing out the public
assistance for the NYC area did not follow FEMA*s customary process
because FEMA had a

set amount of funds available for public assistance efforts. Congress
provided FEMA with specific appropriations for the terrorist attacks that
resulted in a capped funding amount of $8.8 billion for its efforts to aid
the NYC area from the President*s pledge of at least $20 billion in
federal assistance. In consideration of funding required for its other
programs (assistance for individuals impacted by the disaster and hazard
mitigation grants), $7.4 billion remained available for public assistance
and public assistance- related projects. To help ensure that the amount of
public assistance did not exceed this amount, FEMA asked that city and
state officials prioritize their funding needs. As a result, about $400
million in funding initially budgeted for the Port Authority was
eventually reallocated to other projects. FEMA also delayed a decision on
funding for Different Processes

for Selecting Projects and Closing Out the Disaster Based on Capped
Funding Amounts

Page 27 GAO- 03- 926 Disaster Assistance

city and state pension actuarial losses resulting from line of duty deaths
of police and fire fighters at the World Trade Center site so that
officials could be certain that the costs of the project would not cause
FEMA to exceed its total appropriation for the disaster.

A second major difference from how FEMA typically manages a disaster
occurred when it established a June 30, 2003, deadline for closing out the
regular public assistance program and the disaster before work was
completed. According to FEMA officials, they established this deadline for
closing out public assistance projects eligible for funding under the
Stafford Act so that any remaining funds could be used for work identified
as high priorities by city and state officials in New York and authorized
by

Congress. They said that deadlines for closing out public assistance had
not been set in any prior disaster until work was completed, but that they
believed it was necessary for the NYC area to manage the available funds
to ensure that its priorities are best met as quickly as possible.

The response to the NYC terrorist attacks was the largest public
assistance effort in FEMA*s history and by far its largest response to a
terrorist event. Prior to the World Trade Center attacks, FEMA*s most
costly disaster assistance* almost $7 billion* was provided to aid in the
recovery from the Northridge, California, earthquake in 1994. FEMA spent
more than $1 billion for five other disasters in its history. Further,
FEMA*s experience with terrorism was limited to two occasions prior to the
World Trade Center attacks. In April 1993, a major disaster was declared
in the aftermath of an explosion caused by terrorism at the World Trade
Center. FEMA spent about $4.2 million on that disaster recovery. In April
1995, an emergency and then a disaster were declared in Oklahoma City,
Oklahoma, in the aftermath of the bombing of the Murrah federal building*
FEMA spent about $530 million on that recovery effort.

In its response to terrorism in the NYC area, FEMA provided public
assistance funds for the same types of projects that are funded after a
natural disaster (e. g., removing debris, repairing roads, and replacing
emergency vehicles that were destroyed). However, other work funded

was quite different because of the magnitude and nature of the disaster.
FEMA officials said that they determined that some non traditional work
was eligible for its public assistance program using flexible
interpretations of the Stafford Act. Examples of public assistance
projects approved by FEMA that we identified as being different from
traditional public assistance work due to their size and/ or type of work
done included Size and Type of Work

Was Different Than Work in Other Major Disasters

Page 28 GAO- 03- 926 Disaster Assistance

improvements to the Lower Manhattan transportation system and air quality
testing. Some of these projects are discussed as follows.

Improving Lower Manhattan*s Transportation System ($ 2.75 billion). Public
assistance has traditionally been limited to repair of disaster- related
losses and damages to existing infrastructure. Assistance has not
generally

been provided to enhance or modernize the infrastructure beyond its pre
disaster conditions. In recognizing the interdependence of Lower
Manhattan*s transportation system, however, FEMA officials said that they
broadly interpreted their guidelines to enter into an interagency
agreement

with DOT to rebuild physical facilities that were damaged from the attacks
and construct new facilities that may improve the overall Lower Manhattan
transportation system. FEMA attorneys said that they determined that the
Stafford Act would permit funding for the restructuring of the Lower
Manhattan transportation system because they concluded that repairing and
replacing individual elements would not

completely restore the system*s functionality. Testing air quality and
cleaning buildings ($ 36.9 million). FEMA officials said that air quality
testing and removing dust from buildings had not been an issue in prior
major disasters, however, it was important to the physical and
psychological well being of NYC citizens in the aftermath of this

disaster. FEMA determined that the testing of air quality and cleaning
were eligible for public assistance funding where the collapse of the
World Trade Center buildings, resulting fires, and subsequent debris
removal caused potential health issues related to air quality. To meet
this need, FEMA entered into interagency agreements with EPA to sample and
test air quality in the NYC area, as well as to test ways to clean
potentially hazardous dust in building interiors. FEMA also provided
funding to the New York Department of Environmental Protection for the
exterior cleaning of 244 buildings and the interior cleaning of
residences. EPA provided oversight over the interior cleaning program as
part of the interagency agreement with FEMA.

Reimbursing costs for rescheduling New York elections ($ 11 million).
According to a FEMA official, this disaster was the first during which
elections were being held on the day of a federally declared disaster
event. FEMA officials said that they considered whether the costs of
canceling

the elections statewide and rescheduling them at a later date were
eligible for public assistance or were increased operating expenses for
the state and local governments that are not considered to be eligible for
assistance under the Stafford Act. After initially denying the public
assistance application for reimbursement, FEMA officials reconsidered and

Page 29 GAO- 03- 926 Disaster Assistance

determined that the costs were eligible for reimbursement as disaster
related expenses. NYC was also reimbursed for costs of damaged and
destroyed computers, voting machines, and ballots as Stafford Act eligible

public assistance. Aiding WNET Public Television (covered completely by
private insurance) and the Legal Aid Society of New York for Public
Assistance ($ 1.6 million). According to FEMA officials, WNET, a nonprofit
television station, requested reimbursement from the public assistance
program for expenses for a communications antenna that was damaged in the
World Trade Center attacks. The New York Legal Aid Society asked for
reimbursement of disaster- related costs including repair of damages to
its building and reconstruction of its data hub that was destroyed in the
attacks. Although public television stations are not among the specific
types of non profit organizations that are normally considered to be
eligible applicants for public assistance because they provide essential
government services (i. e. educational, medical, water, and sewer
treatment facilities), FEMA

determined that WNET was eligible as a public facility because it provided
health and safety information to the general public during the crisis.
Later, WNET received full coverage for its claims from a private insurance
company, so FEMA funds were not awarded. Similarly, FEMA officials said
that although legal aid societies are not generally eligible for public
assistance, the Legal Aid Society of New York was eligible because it
provided government services as the public defender for NYC. These
projects were not traditional because they required flexibility in FEMA*s
interpretation of Stafford Act definitions of private nonprofit and public
facilities that are eligible for public assistance.

Notwithstanding its efforts to be flexible in defining public assistance
activities eligible under the Stafford Act, FEMA officials denied some
applications because they determined they were not eligible for public
assistance under the Stafford Act, but the Congress directed FEMA to
reimburse the NYC area for some public assistance- related costs that
would not otherwise have been eligible for funding. An estimated total of
$2.2 billion of FEMA*s public assistance funds* about 28 percent* will go
to these costs. 15 This public assistance- related funding was different
from work FEMA funds under the Stafford Act. The projects included

15 The congressionally directed funding includes funding for projects that
FEMA officials said were at least partially eligible for public assistance
under the Stafford Act (i. e. the contractor portion of the $1 billion
debris removal insurance fund to cover workers at the World Trade Center
site.)

Page 30 GAO- 03- 926 Disaster Assistance

authorizing a debris removal insurance fund for workers at the World Trade
Center site and reimbursing NYC agencies for the costs of providing
heightened security after the terrorist attacks. In addition, as discussed
on

page 24 of this report, as we concluded our review, FEMA and NYC and state
officials were considering projects to be funded with $1.2 billion that
became available after the close out of traditional work in June 2003 for

congressionally authorized purposes. None of these reimbursements were
eligible for funding under FEMA*s public assistance program.
Reimbursements being considered included payment of increased costs of the
Medicaid program to meet health needs of recipients after the attacks, a
public awareness campaign called *I Love New York,* which was designed to
attract visitors back to the city after the terrorist attacks, and cost of
living adjustments made to the pensions of survivors of firefighters and
police officers killed in the line of duty in the terrorist attacks.

Debris removal insurance for workers at the World Trade Center site ($ 1
billion). As discussed on page 15, this project establishes an insurance
company to insure NYC and its contractors for claims arising from debris
removal at the World Trade Center, including claims filed by workers who
suffer ill health effects as a result of working on debris removal
operations. FEMA officials said that the project is unprecedented in its
size and complexity and because it involves long- term health and
environmental issues of a scope FEMA had not considered in prior major
disasters. Although officials said that FEMA has never established an
insurance fund to manage claims from other major disasters, FEMA Office of
General Counsel officials noted that FEMA does frequently pay for
contractors* insurance because it is built into the contract between the
public assistance applicant and the contractor. In this instance, workers
rushed to the disaster site before any contracts were approved, and no
private insurance company would carry the insurance because of unknown
liabilities. FEMA officials said that the portion of the project
pertaining to contractors qualified for public assistance under the
Stafford Act and is a disaster- related cost that FEMA has traditionally
assumed in major natural disasters. Expanding the coverage to include
liability for claims filed against NYC or by city workers was an
eligibility issue that was under consideration within FEMA when Congress
authorized the funding in the Consolidated Appropriations Resolution for
fiscal year 2003. 16 16 Pub. L. No. 108- 7. Descriptions of Three

Projects and the Congressional Actions Taken to Fund Them Follow

Page 31 GAO- 03- 926 Disaster Assistance

Reimbursement for heightened security costs in the aftermath of the
terrorist attacks (amount of funding not determined). FEMA denied
applications for public assistance to reimburse city agencies, including
the Departments of Environmental Protection, Corrections, Fire, and
Transportation to cover costs for increased security (e. g., the
Department of Environmental Protection took increased security measures to
protect the city water supply). A FEMA official said that the applications
were not eligible for public assistance because the work was of the sort
that was being done nationwide after the terrorist attacks and were
intended to prevent future attacks rather than respond to the disaster
that had occurred. However, NYC Office of Management and Budget (OMB)
officials said that some of the heightened security costs would be
reimbursed as a result of the enactment of the Consolidated Appropriations
Resolution for fiscal year 2003, which allowed NYC flexibility in covering
disaster- related costs not otherwise reimbursable under the Stafford Act.
At the time of our review, the amount of funding to be provided for
heightened security costs had not been determined, but it was anticipated
by FEMA officials to be over $100 million.

Reimbursement for instructional time for students to make up for days
missed after the terrorist attacks ($ 19.3 million). FEMA initially denied
a public assistance request to pay for additional hours of instructional
time for students who missed school due to closures, delayed openings, and
school relocations in the aftermath of the terrorist attacks. FEMA
officials said that the application was denied because the after- school
program designed by the NYC Board of Education to make up for the lost
instructional time was predicated on direct FEMA funding, but it did not
meet the standards of emergency work for which applicants must perform
work immediately after a disaster, regardless of who will pay, to
eliminate an immediate threat to health, life, and safety. However, FEMA
was specifically directed by the congressional conference committee making
supplemental appropriations for fiscal year 2002 to provide funds for the
additional instructional time. The conference report also directed FEMA to
provide compensation to the NYC school system for costs stemming from the
terrorist attacks for services and supplies, including mental health and
trauma counseling, guidance and grief counseling, and replacement of lost
textbooks and perishable food. 17 NYC Board of Education had spent $19.3
million of a total $77.6 million approved for this 17 House Report 107-
593.

Page 32 GAO- 03- 926 Disaster Assistance

work as of April 30, 2003. The remainder of the funding was de- obligated
to be used for public assistance related spending authorized by Congress.

Because the public assistance response to the NYC area after the terrorist
attacks was unique and expanded in terms of the level and types of
assistance provided, it creates uncertainty about how public assistance
will be delivered if another catastrophic terrorist attack occurs. Both
NYC and FEMA officials, including managers of the World Trade Center
Federal Recovery Office and top officials of the NYC Offices of Emergency
Management and OMB, agreed that they were uncertain regarding the level

and type of future FEMA assistance. These officials stated that if another
major terrorist disaster occurs, other communities might seek similar
types of assistance as was received in the federal public assistance
response to New York. In this regard, an official of the NYC OMB
anticipated that one of the first calls by a mayor of a city that
experienced a major terrorist event would be to NYC to discuss the
decisions made in

the aftermath of the World Trade Center attacks. FEMA Recovery Office
officials agreed that the decisions made in New York would be on the table
at discussions of federal assistance for any future terrorist event. They
noted that it would remain to be seen whether an approach similar to the

one that evolved in NYC, including a 100 percent federal share for public
assistance funding, a capped funding amount, and flexibility in addressing
needs, would be used following any future event. The Congressional
Research Service noted similar concerns in a June 2002

report about the implications that the response and assistance provided to
the NYC area may have on future federal response to catastrophic terrorist
events. 18 The agency*s report pointed out that one of the long- standing
principles of federal disaster assistance policies has been that federal
aid should supplement* not supplant* nonfederal efforts and that the
actions

taken in the aftermath of the terrorist attacks might have established
precedent for an expanded federal role in consequence management after
terrorist attacks. The report noted that traditionally, the types and

amounts of assistance provided after one disaster have been sought
following succeeding catastrophes.

18 Congressional Research Service, Federal Disaster Policies After
Terrorists Strike: Issues and Options for Congress (Washington, D. C.:
June 24, 2002). Response to NYC Area Creates

Uncertainties about How Assistance Would be Delivered in a Future
Catastrophic Terrori st Event

Page 33 GAO- 03- 926 Disaster Assistance

The report also states that the overriding question is whether the range
of existing federal policies for responding to disasters is appropriate if
a terrorist attack more devastating than that of September 11 were to
occur. This is a question to which NYC and FEMA officials have differing
positions. With respect to the effectiveness of the Stafford Act in
dealing with a major terrorist event of an impact equal to or greater than
the World

Trade Center attacks, the officials from NYC involved in the response and
recovery efforts whom we interviewed did not believe that the act fully
addressed the needs of the city and did not think it should be used to
respond to major terrorist events unless it had significant amendments to
address the unique challenges related to terrorist events. According to
top officials of both the NYC Office of Emergency Management and OMB, the
public assistance program authorized by the Stafford Act is not a good fit
for the needs of a large municipal government that is coping with the

effects of a terrorist event. They pointed out that the impacts of the
terrorist attacks in NYC were different than impacts from the natural
disasters that the act was created to address. For example, the Stafford
Act does not address concerns such as the federal government*s
responsibility for addressing long- term environmental liabilities.
Additionally, a NYC emergency management official noted that the Stafford
Act lacked provisions for cities and states to be eligible for
reimbursement of money spent to provide security in the immediate
aftermath of terrorist attacks. The city officials noted that funding to
help alleviate these impacts was eventually approved, but not without

considerable discussion with FEMA officials and specific direction from
Congress.

A key NYC OMB official also said that the Stafford Act is too restrictive
for responding to a major terrorist event because it does not allow the
reimbursement to affected communities for budget shortfalls resulting from
lost tax revenues. The official said that NYC lost tax revenues, both from
real estate taxes from the destroyed buildings and corporate, sales,

and income taxes from displaced businesses and individuals that were
eligible for reimbursement under the Stafford Act. He said that NYC
requested $650 million in reimbursement for revenue shortfalls in fiscal
years 2002 and 2003 that were directly related to the terrorist attacks.
While FEMA officials agreed that the estimate seemed reasonable, the
amount was not eligible for reimbursement under the Stafford Act.

Congress recognized the problem and provided the city some flexibility to
cover expenses in these areas. However, the New York OMB official said
that a federal block grant would have allowed the city to spend the money
in ways that were most needed without specific congressional

authorization to do so; he viewed a block grant approach to providing

Page 34 GAO- 03- 926 Disaster Assistance

disaster relief as preferable to trying to obtain the funding under the
Stafford Act.

In contrast, FEMA officials said that the Stafford Act worked
appropriately for the NYC area. FEMA attorneys said that the Stafford Act
contains enough flexibility to allow funding for non traditional
activities. They added that every disaster has unique aspects, which
continually challenge FEMA officials to exercise their discretion under
the act to provide needed

assistance. Furthermore, they point out that it is always the prerogative
of the Congress to provide additional assistance to disaster- affected
areas to address specific and unique needs. If Congress saw a need to fund
public assistance- related work not covered under the Stafford Act in the
event of another major act of terrorism, it could appropriate funds
specifically for

the disaster, as it did in NYC. Consequently, the FEMA officials are
generally satisfied that they are able to apply provisions of the Stafford
Act to respond to the terrorist attacks and, as of June 2003, did not
believe significant changes to the legislation were necessary in the
aftermath of September 11, 2001.

Nevertheless, FEMA recently initiated an effort to develop a concept for
redesigning the public assistance program. A working group of the Public
Assistance Program Redesign Project, formed at the request of the director
of FEMA*s Recovery Division, held its first meeting in May 2003. Members
included FEMA public assistance and research and evaluation staff and
state program managers to provide a broader perspective on the issues and
concerns. The project was established to suggest proposals to improve the
public assistance program and make it more efficient and capable of
meeting community needs for all types and sizes of disasters, including
those resulting from terrorism. Among other things, the project seeks to
transform the program to one that:

 is flexible enough to meet the demands of disasters of all types and
sizes,  reduces overall resource requirements,  offers incentive for
timely close outs,  places operational control principally with states
and applicants, and

 eliminates redundancies in decision making and processes. The working
group will examine potential options for redesigning the program that
include an annual block grant program managed by the

Page 35 GAO- 03- 926 Disaster Assistance

states, a disaster- based state- managed program, and a capped funding
amount. The project is currently scheduled to hold a listening session for
local officials and representatives of other organizations in August 2003,
and develop a basic concept design for revising the program by September
30, 2003.

The public assistance program FEMA delivered in the NYC area after the
terrorist attacks was substantially different in several ways from a
*typical* FEMA public assistance response. For example, in the NYC area
there was a lack of cost sharing with state and local governments; a
smaller than usual federal share of hazard mitigation funding; a different
process for project review, selection, and close out; and, most
significantly, the size and scope greatly exceeds the traditional public
assistance response after a major natural disaster. The reasons for these
differences are many and include the President*s early commitment to
providing a specified amount of funding to New York, congressional
direction on activities to fund, and FEMA*s discretion under the Stafford
Act.

Irrespective of the reasons for the differences in the way public
assistance was delivered after the terrorist attacks, these differences
raise questions about FEMA*s response to any future major terrorist event
in this country. The key issue is whether the differences in the ways the
public assistance program in the NYC area was delivered will serve a
baseline for the federal approach in the event of another major terrorist
event. Should such a terrorist event occur, it is not unrealistic to
assume that affected communities will expect to receive public assistance
comparable to that provided for the NYC area to meet their needs.

DHS, within its Emergency Preparedness and Response Directorate, has an
opportunity to assess the questions raised as a result of these
differences and, if necessary, revise the public assistance program or
provide Congress with suggestions for legislative changes that are needed
so that it will be positioned to address new expectations for disaster

assistance. The newly formed Public Assistance Redesign Project,
established as we were concluding our audit work at the request of the
Director of FEMA*s Recovery Division, plans to address many of the issues
raised in this report, including whether the approach used in NYC is the
appropriate way to provide federal assistance for recovery from terrorist
acts. It is too early for us to assess the impact the project will have on
the public assistance program in the future; however, it is a promising
first step toward addressing these issues and better ensures that DHS will
have Conclusions

Page 36 GAO- 03- 926 Disaster Assistance

a process in place to deliver public assistance that eliminates
uncertainties and questions about the ways in which the needs of affected
communities will be met in the event of another major terrorist attack.

In commenting on a draft of this report, the Acting Director of FEMA*s
Recovery Division said that FEMA officials are proud of the agency*s
response in delivering public assistance programs to NYC and state, and
that they are satisfied that FEMA*s authority was adequate and flexible
enough in most circumstances to meet the response and recovery needs of
New York. The Acting Director did not take exception to any of the

information provided in our report. FEMA*s comments are reprinted in
appendix II. FEMA also provided technical comments on our draft, which we
incorporated into the report where appropriate.

As we agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this letter. We will then send copies of this report
to the Secretary of Homeland Security and interested congressional
committees. We will make copies available to others upon request. In
addition, this report will be available at no charge on our Web site at
http:// www. gao. gov.

If you or your staff have any questions about this report, please contact
me on (202) 512- 2834 or at heckerj@ gao. gov. Individuals making key
contributions to this report are listed in appendix III.

JayEtta Hecker Director, Physical Infrastructure Issues Agency Comments

Appendix I: Scope and Methodology Page 37 GAO- 03- 926 Disaster Assistance

To determine what activities the Federal Emergency Management (FEMA)
supported through its public assistance program, we analyzed published
FEMA reports and FEMA*s National Emergency Management Information System
(NEMIS) data. NEMIS is FEMA*s primary information system that manages
disaster grant funding, and we analyzed NEMIS data on public assistance
funding for this disaster. Though we were not able to completely assess
the reliability of the published FEMA program data, we did perform logic
tests of the data and found no obvious errors of completeness or accuracy.
Also, according to FEMA officials, the published reports are the most
reliable information available. The officials said that published FEMA
reports were compiled based on NEMIS data, as

well as the knowledge of public assistance program managers of funding for
specific projects. We also updated spending amounts for some projects to
reflect changes made after FEMA*s June 30, 2003, closeout of the
traditional public assistance program, based on technical comments to our
draft report. We interviewed FEMA headquarters, regional, and recovery
office officials in New York City, N. Y., and Washington, D. C. We
analyzed

FEMA, Office of Management and Budget (OMB), and Congressional Research
Service reports on federal assistance to the New York City (NYC) area to
recover from the terrorist attacks. We reviewed the Stafford Act and FEMA
regulations for ensuring that public assistance program

funds are spent appropriately on eligible work and discussed oversight
processes with FEMA headquarters, regional, and recovery office officials.
We also discussed the agreements that FEMA used to coordinate responses of
other federal agencies. We selected and examined the FEMA agreements with
the U. S. Army Corps of Engineers, Department of Transportation (DOT), and
Environmental Protection Agency (EPA) and reviewed support documents. We
met with officials of the FEMA Inspector General to discuss planning for
full audits of selected projects within 3 years of their completion.

To determine how the federal government*s response to the terrorist event
differed from FEMA*s traditional approach to funding public assistance in
other disasters, we selected 10 projects for detailed review from an issue

matrix created by the public assistance officer at the World Trade Center
Federal Recovery Office. The issue matrix tracked 32 public assistance
funding issues and other types of concerns that required higher than
normal levels of review. In making our selection of projects, we consulted
with officials of the FEMA Office of General Counsel in Washington, D. C.,
and FEMA officials at the World Trade Center Recovery Office in New

York City, N. Y. For each project selected, we reviewed available written
documentation such as project worksheets, case management files, letters,
and memoranda. We reviewed the legislation that directed FEMA to fund
Appendix I: Scope and Methodology

Appendix I: Scope and Methodology Page 38 GAO- 03- 926 Disaster Assistance

selected projects. Using structured interview instruments, we interviewed
FEMA project managers and representatives of agencies that applied for
public assistance to discuss how the challenging issues were considered
and resolved. Table 1 lists the 10 projects we reviewed and the applicant
organizations that participated in interviews on each of them. We also
discussed FEMA*s staffing processes with human resources officials at FEMA
Headquarters in Washington, D. C., World Trade Center Federal Recovery
Office managers, and representatives of each of FEMA*s three technical
assistance contractors who sent staff to NYC.

Table 1: Ten Projects We Reviewed and Applicant Organizations Interviewed
for Each of Them Project Applicant organization

Debris removal insurance for workers at Ground Zero  NYC OMB

Reimbursement for NYC budget deficits directly related to the terrorist
attacks

 NYC OMB Reimbursement for instructional time for students to make- up
for days missed after the terrorist attacks

 NYC Department of Education NYC share of reimbursement for pension
actuarial losses resulting from line of duty deaths of police and
firefighters at Ground Zero

 NYC OMB Commuter train station construction costs  Port Authority of N.
Y. and N. J.

 NYC Department of Transportation Reimbursement for damage to voting
equipment and rescheduling NYC elections

 NYC Board of Elections Reimbursement for heightened security costs in
the aftermath of the terrorist attacks

 NYC OMB

 NYC Office of Emergency Management  NYC Fire Department

 NYC Police Department

 NYC Office of Corrections

 NYC Department of Environmental Protection

Cleaning of dust and debris from emergency vehicles

 NYC OMB

 NYC Office of Emergency Management  NYC Fire Department

 NYC Police Department WNET Public Television eligibility for public
assistance for disaster- related costs

 Educational Broadcasting Corporation

(WNET)

Appendix I: Scope and Methodology Page 39 GAO- 03- 926 Disaster Assistance

Project Applicant organization

Legal Aid Society of N. Y. eligibility for public assistance for disaster-
related Costs

 N. Y. Legal Aid Society Source: GAO.

To identify some of the implications these different approaches may have
on the delivery of public assistance should terrorist attacks causing
similarly catastrophic damage occur in the future, we interviewed FEMA
officials in NYC, and FEMA and Congressional Research Service officials in
Washington, D. C. We also analyzed our report and Congressional

Research Service reports on federal emergency response and recovery
policies, and we reviewed the Stafford Act and FEMA regulations.

We conducted this review from August 2002 to July 2003. We performed our
audit work in accordance with generally accepted government auditing
standards.

Appendix II: Comments from the Federal Emergency Management Agency Page 40
GAO- 03- 926 Disaster Assistance

Appendix II: Comments from the Federal Emergency Management Agency

Appendix II: Comments from the Federal Emergency Management Agency Page 41
GAO- 03- 926 Disaster Assistance

Appendix III: GAO Contacts and Staff Acknowledgments

Page 42 GAO- 03- 926 Disaster Assistance

JayEtta Z. Hecker (202) 512- 2834 John R. Schulze (202) 512- 4390

In addition to those named above, John E. Bagnulo, C. Vashun Cole, Kara
Finnegan- Irving, Julian L. King, Deborah A. Knorr, and John A. Rose
Appendix III: GAO Contacts and Staff

Acknowledgments GAO Contacts Acknowledgments

(544046)

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