Hill Misled on Disaster Recovery Costs, GAO Says

By Archibald, George | The Washington Times (Washington, DC), September 5, 2000 | Go to article overview

Hill Misled on Disaster Recovery Costs, GAO Says


Archibald, George, The Washington Times (Washington, DC)


The Federal Emergency Management Administration has misinformed Congress for many years about disaster recovery costs and misallocated hundreds of millions of dollars appropriated by Congress, says a General Accounting Office (GAO) report.

FEMA's mistakes totaled $250 million in one monthly report to Congress last year because officials in its 10 regional offices and Washington disagreed on how much was obligated to states and communities recovering from past disasters, the GAO says in an Aug. 29 report to the Senate Appropriations Committee.

"Obligation amounts reported by regional staff were both higher and lower than amounts reported by headquarters staff, and FEMA officials could not tell us which amounts were correct," the report says.

The problem was traced mainly to a "systemic error" in FEMA's financial management system, which relied on budgeted amounts rather than actual payouts for disaster recovery projects. No hint of fraud or embezzlement is mentioned in the report.

"The first problem FEMA officials noted involved projects that ultimately cost less than the amount FEMA initially approved," the GAO found. "FEMA found that if a state returned the unexpended funds for a particular disaster, the method FEMA was using to extract data from [the financial management computer] did not recognize and account for the unexpended funds."

FEMA has now modified the cost-tracking system so actual payouts are credited to budgeted amounts for individual disaster projects and leftover money is deducted from outstanding projected costs, the report says.

FEMA reported that the new cost-tracking method had reduced disagreements over outstanding disaster costs between regional and headquarters officials from $250 million to $41 million, the GAO told a Senate Appropriations subcommittee led by Sen. Christopher S. Bond, Missouri Republican, who called for the probe.

Mr. Bond, whose subcommittee has approved $27.4 billion in regular and emergency supplemental funding for FEMA over the past decade, became angry early last year when the agency reported a $700 million projected surplus for the next six months but came back only weeks later to say money would run out by Sept. 30. …

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