Hearing of the Senate Homeland Security and Governmental Affairs Committee - The New FEMA: Is the Agency Better Prepared for a Catastrophe Now Than it was in 2005?

Interview

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SEN. SUSAN M. COLLINS (R-ME): Thank you, Mr. Chairman.

We are approaching the third hurricane season since Hurricane Katrina and later this year the second anniversary of the Post-Katrina Emergency Management Reform Act that the chairman and I, Senator Coleman and others worked so hard to enact.

Today's hearing gives us an opportunity to evaluate how well FEMA has drawn on the lessons learned from Hurricane Katrina and acted on congressional mandates to prepare for a new catastrophe -- a challenge that we know is inevitable and yet hope will never come.

As I reviewed the report of the DHS inspector general, I read comments that mirrored my own observations. The IG found that FEMA has made progress in all of the areas reviewed but that in some important ways the progress has been limited or modest.

I don't believe that we should underestimate just how difficult it is to completely revamp procedures, processes and people while continuing to cope with many natural disasters. I know that FEMA has improved and is working hard on its deficiencies. Last year I saw firsthand the agency's effective response to the devastating Patriots' Day storm in my state. I also observed a training exercise in Massachusetts and Rhode Island that was impressive in its coordination and scope.

The regional approach that the chairman and I advocated is clearly producing results. Nevertheless, the effect of implementation of all of the comprehensive reforms is essential if FEMA is to learn the lessons of Katrina and to prepare for even worse disasters, such as a biological, chemical or even a nuclear attack.

Of the nine key areas of readiness reviewed by the IG, four showed only modest progress and one was judged to show limited progress. The weakest area concerned mission assignments, the system for issuing and coordinating task orders among federal agencies. Our investigation of the Katrina catastrophe identified fundamental flaws in the mission assignment process, particularly between FEMA and the Department of Defense.

These were a major roadblock to a quick and effective response, and I am concerned that we have not made as much progress in that key area. The IG report also notes that obstacles like staffing shortages, inadequate funding, a lack of coordination, incomplete strategic plans, a lack of accountability and resistance to change from both internal and external stakeholders continued to be problems.

There are some overarching issues as well. The IG observes that FEMA is working on plans for catastrophic preparedness and response on the Gulf Coast, in the New Madrid Fault Seismic Zone and in the major cities. But the IG adds that the plans are very geocentric and that disaster officials regard them as not readily transferable.

I want, however, to discuss this further with the IG, since a regional approach focusing on the most likely scenario for that area strikes me as making good sense and it is consistent with the reform act. Moreover, the department has devoted considerable resources to national planning. For example, FEMA and the operations directorate of the department, in concert with other federal departments and agencies, have been drafting strategic plans for each of the 15 national planning scenarios.

Just a few months ago FEMA issued its National Response Framework, which articulates the national doctrines, principles and architecture for our nation's preparedness for any emergency, whether man-made or natural. It is important to note, however, that plans are only as effective as the people implementing them and as the adequacy of resources backing them, and that is why the budget issues that the chairman mentioned are still critical, as is getting the right people into the right position -- something that I know that David Paulison has worked very hard to do.

It's also precisely why FEMA's efforts to establish robust regional offices, as required by the reform act, is so vital. One of the changes that I think is making a real difference is having a Department of Defense coordinating official actually sitting in the regional FEMA offices. I've heard that has made a big difference and is improving coordination enormously. Since we came up with that proposal, I always like to highlight it as one of the successes.

SEN. LIEBERMAN: That's okay with me. (Laughter.)

SEN. COLLINS: (Laughs.) The regional offices are also working much more closely than ever before with state and local emergency managers and with first responders on the entire preparedness cycle, including training, exercises, equipping, educating, Homeland Security grants, in addition to planning. The drive for a stronger and more effective FEMA also requires that we maintain the agency's location within the Department of Homeland Security, and I bring that issue up because we continue to hear some members who pursue the idea of taking FEMA out of the Department of Homeland Security. That would require a huge duplication of effort.

FEMA has made real progress, but as the GAO warned us last year, successful transformations of large organizations, even those faced with less strenuous reorganizations than DHS, can take from five to seven years to achieve. Another reorganization at this time would simply introduce distractions and disruptions that would undermine the progress that we are making without addressing any of the issues that have constrained that progress.

I look forward to hearing from both of our distinguished witnesses today; we've worked very closely with them. We are eager to help you sustain FEMA's progress and catch up in the areas where improvements have lagged. We want to fully realize the promise of the new FEMA envisioned in our 2006 reform.

Thank you, Mr. Chairman.

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SEN. COLLINS: Thank you.

Chief, as part of the FEMA Reform Act, we also directed FEMA to enter into pre-disaster contracts as much as possible so that we didn't see once again the problems in the wake of Hurricane Katrina where these enormous sole-source contracts were awarded and far more money was spent than if the contracts had been negotiated in advance and then could just be pulled off the shelf when disaster struck.

I'm also pleased to see that with the additional funding that we have provided that FEMA has increased its contracting staff. As I recall, there were only 35 during Hurricane Katrina and today you have 162 contracting positions. So that allows you to do far better planning and avoid an excessive or unnecessary reliance on noncompetitive contracts.

However, the IG's report still expresses a concern about FEMA's ability to monitor a contract after it's been awarded. And the GAO last November also was critical about FEMA's management of a contract for managing and maintaining group manufactured housing sites in Mississippi and reported more than $30 million in questionable payments. These payments occurred, according to GAO, for the period between June of 2006 and February of last year, so it's not in the immediate aftermath of Hurricane Katrina.

What is FEMA doing going forward to ensure better contract management after the award of the contract? Seems to me you've made a lot of progress on the front end, but there's still problems on the back end.

MR. PAULISON: One of the big issues of having enough people to do that, and with the numbers of positions that this Congress has given us, we are in the process of hiring people to do that. Like you say, we have over 100 contract people now, but that also includes our contract specialists who monitor those contracts. We're putting more and more of those people on the ground. We don't have enough yet. But with the '09 budget, if that '09 budget is approved as submitted, FEMA would have gone from 2,100 full-time employees to 4,300 in just two years. So we have -- would have almost doubled the size of this organization. That gives us the resources that you're talking about that we need to fulfill those that the IG and the GAO both reported to us, so we need to do a better job of monitoring the contracts.

SEN. COLLINS: Well, just this week, a general complaint to me that all of the good DOD contract officials are now going to FEMA, so apparently you're making some progress.

That actually is a serious problem throughout the federal government. The procurement work force is very strained. Many of them are eligible for retirement. And as part of the contracting reform bill that this committee has reported and the Senate has passed, we take direct aim at bolstering the contracting work force, which I know is a problem throughout the federal government.

Mr. Skinner, let me ask the next question to you. Shortly after Hurricane Katrina, you testified to this committee or before this committee about the work of the Hurricane Katrina Fraud Task Force, because unfortunately at that time, FEMA did not have the common-sense safeguards in place to prevent fraud in the individual assistance program. And we held hearings which revealed widespread fraud in that program, truly outrageous examples of prisoners, for example, receiving housing assistance. What is the status of the work of that task force?

MR. SKINNER: It is still working and it's going very strong. We're located now in Baton Rouge. We're working collectively with over a dozen IGs and other law enforcement agencies -- the FBI, Secret Service, postal inspectors. We're continuing to receive allegations. Approximately I believe we're getting right now in Louisiana alone about 100 allegations a week. In Mississippi, where they're less, but we're receiving approximately 30 to 40 allegations a month on various corruption schemes. Just in the past quarter, we have had over 30 arrests, 20-some indictments. We have approximately 200 to 300 open cases in Louisiana alone.

We're working about 50 cases with other IGs. We have committed to that task force and we intend to stay there for the long haul, not only in Baton Rouge to cover the Louisiana storms but also in Texas for Rita and as well as offices that we have set up in Biloxi and Vicksburg, Mississippi. So it's going strong and we have invested the resources there. And we continue to -- and we intend to keep them there as long as they're needed.

SEN. COLLINS: Do you think that FEMA has implemented sufficient safeguards in its process for awarding individual assistance to prevent the kind of fraud that you found through your investigations? For example, I remember that one of the deficiencies was that if you applied online, there were certain checks that were done to ensure the identity and location of the individual, but that if you called you were able to get assistance without that -- those kinds of checks, or maybe it was the other way around. But do you believe FEMA has put in place the kinds of safeguards to prevent that kind of blatant fraud?

MR. SKINNER: I believe FEMA always had those safeguards. After Katrina they were waived, and that opened a window of opportunity for those -- for the -- those that wanted to take advantage of the system, and that's what they did. I think FEMA needs to invest in its systems. I think they're archaic. I think we can improve in our abilities to process applications so that we don't have to waive requirements in a catastrophic environment. That's something that FEMA's looking at. I understand in '09 in their budget is something that they want to begin to invest heavily in is the enhancement of their IT systems.

SEN. COLLINS: Thank you.

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