Results Act: Observations on the Federal Emergency Management Agency's
Draft Strategic Plan (Correspondence, 07/22/97, GAO/RCED-97-204R).

Pursuant to a congressional request, GAO reviewed the Federal Emergency
Management Agency's (FEMA) draft strategic plan, focusing on whether:
(1) it fulfills the requirements of the Government Performance and
Results Act and to provide GAO's views on its overall quality; (2) it
reflects FEMA's key statutory authorities; (3) it reflects interagency
coordination for crosscutting programs, activities, or functions that
are similar or complementary to other federal agencies; (4) it addresses
major management problems GAO has previously identified; and (5) FEMA
had adequate data and information systems to provide sufficiently
reliable information for measuring results.

GAO noted that: (1) overall, FEMA's draft strategic plan indicates that
the agency has made good progress towards fulfilling the requirements of
the Results Act; (2) it focuses on a few strategic goals that are
generally results-oriented and well-linked to a mission that reflects
consideration of key statutory provisions; (3) the draft plan, however,
is missing two of the six critical elements required by the Results Act
and OMB's guidance, a relationship between general goals and annual
performance goals and a description of the role of program evaluations;
(4) the plan could be made more useful to FEMA, the Congress, and other
stakeholders by clarifying the linkage among goals, objectives, and
strategies and by making other changes to better conform to the Results
Act and OMB's guidance; (5) although FEMA's draft strategic plan
reflects consideration of the key statutory provisions that authorize
FEMA's programs, it does not explicitly reference the major legislation
or executive orders that serve as a basis for its mission statement,
goals, and strategies; (6) the plan might benefit from explicit
references to these authorities and descriptions of how they relate to
the agency's goals and objectives; (7) FEMA's draft plan clearly
acknowledges that the nation's emergency management system is built on a
partnership with states, localities, and individuals; (8) however, it
does not reflect the significant role that other federal agencies play
in emergency management, particularly in helping communities and
individuals recover from the effects of disasters; (9) it might benefit
by mentioning the external stakeholders, such as federal agencies with
related missions, and how FEMA coordinated with them in developing its
plan; (10) the plan does not specifically address certain management
issues that GAO and others have previously identified; (11) furthermore,
FEMA's draft plan does not directly address financial and information
management problems that could hinder the achievement of its strategic
goals and objectives; (12) FEMA's capacity to provide reliable
information on achieving its goals is uncertain; (13) the performance
measures discussed in FEMA's draft plan include approaches for long-term
measurement processes that have not yet been developed or propose to use
baseline data that are not yet available; and (14) while obtaining
information for some performance measures may be difficult, costly, or
both, the plan does not discuss what resources may be required to
develop the proposed measurement processes and data.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-204R
     TITLE:  Results Act: Observations on the Federal Emergency 
             Management Agency's Draft Strategic Plan
      DATE:  07/22/97
   SUBJECT:  Agency missions
             Strategic planning
             Congressional/executive relations
             Interagency relations
             Intergovernmental relations
             Information resources management
             Emergency preparedness
             Disaster relief aid
             Program evaluation
IDENTIFIER:  Disaster Relief Fund
             National Performance Review
             FEMA Integrated Financial Management Information System
             
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Cover
================================================================ COVER



September 1997


GAO/RCED-97-204R

FEMA's Strategic Plan

(385688)


Abbreviations
=============================================================== ABBREV

  BOP - Federal Bureau of Prisons
  CFO - Chief Financial Officers
  DEA - Drug Enforcement Administration
  DOJ - Department of Justice
  FBI - Federal Bureau of Investigation
  FEMA - x
  INS - Immigration and Naturalization Service
  NPR - National Performance Review
  OMB - Office of Management and Budget
  FMFIA - x
  IFMIS - x

Letter
=============================================================== LETTER


B-277479

July 22, 1997

The Honorable Richard K.  Armey
Majority Leader
House of Representatives

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

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

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

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

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


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :1

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

We obtained the June 24, 1997, draft strategic plan that FEMA
provided to congressional committees.  It is important to recognize
that FEMA's final plan is not due to the Congress and the Office of
Management and Budget (OMB) until September 30, 1997.  Furthermore,
the Results Act anticipated that perfecting the process may take
several planning cycles and that the final plan will continue to be
refined as future planning cycles occur.  Thus, our comments reflect
a "snapshot" of the agency's plan at this time.  We recognize that
developing a strategic plan is a dynamic process and that FEMA is
continuing work to revise the draft with input from OMB,
congressional staff, and other stakeholders. 

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


   BACKGROUND
------------------------------------------------------------ Letter :2

FEMA is an independent agency charged with helping states and
localities deal with natural disasters.  FEMA's programs and
activities encompass all four phases of emergency management: 
preparedness (developing and maintaining the capability to respond to
disasters), mitigation (reducing the risk of loss of life and
property from natural hazards), response (providing immediate relief
to disaster victims), and recovery (rebuilding and restoring
disaster-damaged communities).  Prior to the establishment of FEMA in
1979, these functions were administered by various federal agencies,
including the departments of Defense, Housing and Urban Development,
and Commerce.  FEMA's budget is affected by the number and scope of
presidential disaster declarations.  During the 1990s, the agency's
disaster assistance obligations have averaged about $2 billion
annually. 

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

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

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


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :3

Overall, FEMA's draft strategic plan indicates that the agency has
made good progress towards fulfilling the requirements of the Results
Act.  It focuses on a few strategic goals that are generally
results-oriented and well-linked to a mission that reflects
consideration of key statutory provisions.  The draft plan, however,
is missing two of the six critical elements required by the Results
Act and OMB's guidance:  a relationship between general goals and
annual performance goals and a description of the role of program
evaluations.  The plan could be made more useful to FEMA, the
Congress, and other stakeholders by clarifying the linkage among
goals, objectives, and strategies and by making other changes to
better conform to the Results Act and OMB's guidance.  For example,
while the plan identifies some external factors that affect the
agency's ability to achieve its goals, it does not link the external
factors to particular goals or describe how achieving the goals could
be influenced by the factors. 

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

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

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

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


   FEMA'S STRATEGIC PLAN COULD
   BETTER MEET THE REQUIREMENTS OF
   THE RESULTS ACT
------------------------------------------------------------ Letter :4

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


      MISSION STATEMENT
---------------------------------------------------------- Letter :4.1

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

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


      STRATEGIC GOALS AND
      OBJECTIVES
---------------------------------------------------------- Letter :4.2

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



                                Table 1
                
                  Goals and Objectives in FEMA's Draft
                             Strategic Plan

Goal                                Objective
----------------------------------  ----------------------------------
1.Protect lives and prevent the     1.By the end of fiscal year 2002,
loss of property from all hazards.  reduce by 10 percent the risk of
                                    loss of life and injury from
                                    hazards.

                                    2.By the end of fiscal year 2002,
                                    reduce by 15 percent the risk of
                                    property loss and economic
                                    disruption from hazards.

2.Reduce human suffering and        3.By the end of fiscal year 2002,
enhance the recovery of             reduce by 25 percent human
communities after disaster          suffering from the impact of
strikes.                            disasters.

                                    4.By the end of fiscal year 2002,
                                    increase by 20 percent the ability
                                    of individuals, businesses, and
                                    public entities to recover from
                                    disasters.

3.Ensure that FEMA serves the       5.By the end of fiscal year 2002,
public in a timely and cost-        improve by 20 percent the
efficient manner.                   efficiency with which FEMA
                                    delivers its services.

                                    6.By the end of fiscal year 2002,
                                    achieve 90 percent overall
                                    customer satisfaction, internal
                                    and external, with FEMA's
                                    services.
----------------------------------------------------------------------
The draft plan characterizes the first two goals as mission-related
and the third as organizational.  We note that the first two goals
are results-oriented and the third goal, based on customer service
and efficiency, is process-oriented (characterizing how FEMA intends
to operate instead of expressing an outcome resulting from FEMA's
actions). 

The Results Act requires that strategic goals and objectives be
stated in a manner that allows a future assessment to be made on
whether they were or are being achieved.  By including specific
deadlines and targets, FEMA's goals meet this criterion.  However,
the objectives would be improved by clarifying their intended
results--that is, the specific reduction, increase, or improvement
that is intended.  For example, it is not clear whether the second
objective is to reduce the risk of property loss and economic
disruption from hazards by 15 percent from the level existing in an
earlier baseline year or to make the risk 15 percent lower in 2002
than the level that would have prevailed in the absence of FEMA's
programs.  (While the latter interpretation appears to be consistent
with FEMA's mission statement and first goal, the discussion of
performance measurement seems to support the former interpretation.)
This clarification is important because it could affect which
specific strategies to use, levels of resources to require, and
specific performance measures to use. 

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

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


      STRATEGIES FOR ACHIEVING
      GOALS/OBJECTIVES
---------------------------------------------------------- Letter :4.3

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

FEMA's draft plan provides information on approaches for achieving
the goals and objectives in two sections:  (1) a discussion of
performance measures associated with each objective and (2) a section
entitled "Strategies." However, neither of these sections fully meets
the guidance described above--that is, they do not discuss the
resources, the technologies, or the agency operations that will be
needed to accomplish the goals and objectives, how the goals and
objectives with be communicated throughout FEMA, or how
accountability will be assigned. 

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


      KEY EXTERNAL FACTORS
---------------------------------------------------------- Letter :4.4

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

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

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


      THE RELATIONSHIP BETWEEN
      GENERAL AND ANNUAL
      PERFORMANCE GOALS
---------------------------------------------------------- Letter :4.5

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

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

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


      PROGRAM EVALUATIONS
---------------------------------------------------------- Letter :4.6

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

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


      OTHER OBSERVATIONS
---------------------------------------------------------- Letter :4.7

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

Given the many and varied stakeholders that will have critical roles
in determining the extent to which FEMA's goals are met, the plan
should briefly identify the major stakeholders that contributed to
its development both inside and outside the agency.  Also, by
simplifying some of the language, the plan might more clearly
communicate FEMA's strategic direction to make it clearer to readers
outside of the emergency management community.  For example, such
terms as "risk" and "all hazards" have specific meanings in the
context of emergency management that may differ from their meanings
in other contexts.  To FEMA's credit, the draft plan explicitly
defines such terms as "preparedness," "mitigation," "response," and
"recovery." This change should also make FEMA's mission statement
much clearer to external audiences. 

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


   FEMA'S STRATEGIC PLAN REFLECTS
   KEY STATUTORY AUTHORITIES
------------------------------------------------------------ Letter :5

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

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


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


   DRAFT STRATEGIC PLAN DOES NOT
   IDENTIFY CROSSCUTTING PROGRAM
   ACTIVITIES
------------------------------------------------------------ Letter :6

FEMA's draft strategic plan clearly acknowledges that the nation's
emergency management system depends on a partnership with states,
localities, and individuals.  However, it does not reflect the
significant role that other federal agencies, such as the Small
Business Administration and the U.S.  Army Corps of Engineers, play
in emergency management, particularly in helping communities and
individuals recover from the effects of disasters.  The plan would
benefit by incorporating some descriptions of other agencies'
programs and their influence on FEMA's strategic objectives. 

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

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

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


   DRAFT STRATEGIC PLAN DOES NOT
   ADDRESS MANAGEMENT CHALLENGES
------------------------------------------------------------ Letter :7

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

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

  -- In a May 1996 report, we presented several proposals, which had
     been identified by FEMA regional officials, to reduce the costs
     of its public assistance program.\3 (This program provides
     financial and other assistance to restore or rebuild
     disaster-damaged facilities that serve a public purpose,
     including government buildings and water distribution systems.)
     For example, FEMA officials suggested limiting the impact of
     building codes and standards and eliminating funding for some
     water control projects. 

  -- In March 1995 testimony, we discussed three broad approaches to
     potentially reduce the costs of federal disaster assistance.\4
     These included (1) establishing more explicit and/or stringent
     criteria for providing federal disaster assistance, (2)
     emphasizing hazard mitigation through incentives, and (3)
     relying more on insurance. 

  -- In a September 1995 report, we noted that the flexibility and
     generally subjective nature of FEMA's criteria had raised
     questions about the consistency of providing federal disaster
     assistance.\5 These criteria directly affect FEMA's costs for
     providing disaster assistance. 

  -- In July 1995, FEMA's Office of the Inspector General (OIG)
     issued a report identifying ways to reduce the costs of federal
     disaster assistance by eliminating or restricting eligibility or
     by replacing existing grants with loans.\6

  -- Similarly, in 1993, the National Performance Review recommended
     that FEMA propose comprehensive federal policies to reduce the
     total cost of disasters and minimize federal costs of disaster
     assistance.\7

FEMA's draft strategic plan mentions cost reduction in several
places.  For example, the plan recognizes the importance of
mitigation--which includes minimizing the risk of property losses
from hazards--for reducing the future societal costs of disasters. 
Also, the plan's third goal acknowledges the importance of operating
in a cost-efficient manner.  However, the objective associated with
this goal implies reducing FEMA's administrative costs, which are
small relative to program costs.  For example, in fiscal year 1996,
FEMA's obligations for salaries and expenses totaled about $164
million while obligations for the Disaster Relief Fund were about
$3.6 billion. 

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

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


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

\3 Disaster Assistance:  Improvements Needed in Determining
Eligibility for Public Assistance (GAO/RCED-96-113R, May 23, 1996). 

\4 Disaster Assistance:  Information on Expenditures and Proposals to
Improve Effectiveness and Reduce Future Costs (GAO/T-RCED-95-140,
Mar.  16, 1995). 

\5 Disaster Assistance:  Information on Declarations for Urban and
Rural Areas (GAO/RCED-95-242, Sept.  14, 1995). 

\6 Options for Reducing Public Assistance Program Costs (Inspection
Report I-02-95, July 1995). 

\7 National Performance Review, Creating a Government That Works
Better and Costs Less:  Federal Emergency Management Agency
(Washington, D.C.:  U.S.  Government Printing Office, 1993). 


   FEMA'S CAPACITY TO PROVIDE
   RELIABLE INFORMATION ON THE
   ACHIEVEMENT OF STRATEGIC GOALS
   IS UNCERTAIN
------------------------------------------------------------ Letter :8

FEMA needs reliable data to measure its progress in achieving its
goals.  The performance measures discussed in FEMA's draft strategic
plan (1) include approaches for long-term measurement processes that
have not yet been developed and/or (2) propose to use baseline data
that are not yet available.  The plan does not discuss what resources
may be required to develop the proposed measurement processes and
data.  Obtaining information for some performance measures may be
difficult, costly, or both.  For example,

  -- Data may be scarce for some of the plan's proposed proxy
     measures.  For example, one proxy uses, as its universe,
     communities that have (1) experienced a presidentially declared
     disaster, (2) implemented mitigation measures, and (3)
     experienced a similar type disaster within a 10-year period. 
     Communities that meet all three criteria might be rare. 

  -- One measure includes quantifying access to roads and
     transportation, educational institutions, medical facilities,
     utilities, water treatment, and businesses following a disaster. 
     Depending on data availability and reliability, this measure may
     be difficult to quantify. 

  -- In several cases, surveys are proposed as the methodology to
     measure performance.  Depending on their size, scope, and rigor,
     surveys may be costly. 

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

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


   AGENCY COMMENTS
------------------------------------------------------------ Letter :9

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


---------------------------------------------------------- Letter :9.1

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

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

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

*** End of document. ***