[Senate Hearing 112-493]
[From the U.S. Government Printing Office]
S. Hrg. 112-493
ACCOUNTABILITY AT FEMA:
IS QUALITY JOB #1
=======================================================================
HEARING
BEFORE THE
AD HOC SUBCOMMITTEE ON DISASTER RECOVERY AND INTERGOVERNMENTAL AFFAIRS
OF THE
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
OCTOBER 20, 2011
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska JERRY MORAN, Kansas
Michael L. Alexander, Staff Director
Nicholas A. Rossi, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
Joyce Ward Publications Clerk and GPO Detailee
AD HOC SUBCOMMITTEE ON DISASTER RECOVERY AND INTERGOVERNMENTAL AFFAIRS
MARK L. PRYOR, Arkansas, Chairman
DANIEL K. AKAKA, Hawaii RAND PAUL, Kentucky
MARY L. LANDRIEU, Louisiana SCOTT P. BROWN, Massachusetts
JON TESTER, Montana RON JOHNSON, Wisconsin
Amanda Fox, Majority Professional Staff
Brandon Booker, Minority Staff Director
Kelsey Stroud, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Pryor................................................ 1
Senator Johnson.............................................. 2
WITNESSES
THURSDAY, OCTOBER 20, 2011
Hon. Richard Serino, Deputy Administrator, Federal Emergency
Management Agency, U.S. Department of Homeland Security........ 4
Matt Jadacki, Assistant Inspector General, Emergency Management
Oversight, Office of Inspector General, U.S. Department of
Homeland Security.............................................. 6
Hon. Maurice McTigue, Vice President and Distinguished Visiting
Scholar, The Mercatus Center, George Mason University.......... 8
Craig Killough, Vice President, Project Management Institute..... 10
Alphabetical List of Witnesses
Jadacki, Matt:
Testimony.................................................... 6
Prepared statement........................................... 34
Killough, Craig:
Testimony.................................................... 10
Prepared statement with attachment........................... 101
McTigue, Hon. Maurice:
Testimony.................................................... 8
Prepared statement with attachment........................... 43
Serino, Hon. Richard:
Testimony.................................................... 4
Prepared statement........................................... 27
APPENDIX
Graph referenced by Senator Johnson.............................. 112
Information submitted by Hon. Maurice McTigue on the Peterson-Pew
Commission for Budget Reform................................... 214
Questions and responses for the Record from:
Mr. Serino................................................... 235
Mr. Jadacki.................................................. 253
Mr. McTigue.................................................. 257
Mr. Killough................................................. 263
ACCOUNTABILITY AT FEMA:
IS QUALITY JOB #1
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THURSDAY, OCTOBER 20, 2011
U.S. Senate,
Ad Hoc Subcommittee on Disaster Recovery
and Intergovernmental Affairs,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:33 a.m., in
Room SD-342, Dirksen Senate Office Building, Hon. Mark L.
Pryor, Chairman of the Subcommittee, presiding.
Present: Senators Pryor and Johnson.
OPENING STATEMENT OF SENATOR PRYOR
Senator Pryor. All right. I will call our Subcommittee to
order.
I want to thank everyone for being here, thank all the
witnesses and thank Senator Johnson.
We may have some other Senators that come in and out during
the course of the hearing. We have a vote in about an hour and
a half. So Senator Johnson and I are kind of targeting that for
a nice end point at about noon, to try to finish before our
votes.
I want to thank all of you all for being at the
Subcommittee on Disaster Recovery and Intergovernmental Affairs
(DRIA). We have entitled this hearing ``Accountability at FEMA:
Is Quality Job #1,'' and I think it is a question that we
should probably ask of all of our agencies to try to make sure
that they have the quality controls and the efficiencies that
we want to see and they are managed right and run well. We are
certainly glad to put Federal Emergency Management Agency
(FEMA) under a microscope today because all government agencies
need to do this from time to time.
We are here today to assess FEMA's progress in its effort
to balance quick disaster response with good stewardship of
taxpayer money.
FEMA has responded to 87 major disasters this year, at
least 10 of which caused damages in excess of a billion
dollars. In August, FEMA had to redirect spending on past
disasters in order to cover the immediate needs arising from
Hurricane Irene and Tropical Storm Lee.
In March, we convened this Subcommittee to examine the
recoupment of $643 million in post-Hurricane Katrina disaster
assistance and also to discuss ways to prevent improper
payments in the future. We determined that stronger front-end
controls are needed to identify and prevent waste, fraud and
abuse at the outset. Without them, we get stuck with the costly
pay-and-chase approach of recovering money after it is out the
door. At that point, it is often too late.
Today, I want to make sure quality control is a priority at
FEMA. My goal is to review the organization and leadership of
FEMA components, their emphasis on front-end accountability
processes and how we can make additional improvements so that
the American people can rest assured that their tax dollars are
being put to good use.
The Department of Homeland Security (DHS) Inspector General
(IG) has examined FEMA's management and quality controls. It
acknowledges that some improvements are being made, but the
IG's findings are also troubling.
For example, FEMA's Fraud Prevention and Investigation
Branch had only six employees last year. Of the hundreds of
thousands of cases processed by FEMA each year, only 3,108 were
referred for review between 2007 and 2010. Although the Post-
Hurricane Katrina Emergency Management Reform Act required
agency-wide employee training to better identify waste, fraud
and abuse, this has not yet happened.
In addition, FEMA's acquisitions processes lack the
controls necessary to prevent wasteful spending, resulting in
multimillion dollar contracts that do not clear requirements
and performance measures. After Hurricane Ike, FEMA paid a
million dollars for 60 days of access to 2 mobile medical units
which they never used.
The waste does not always end with the initial purchase. In
the aftermath of the 2005 hurricane season, Hope, Arkansas
became home to 19,000 unusable travel trailers and mobile homes
that had cost $25,000 a month just to keep them stored there.
Wasting taxpayer dollars in this way is simply unacceptable.
Preventing inefficiency and abuse through enhanced
government performance and accountability is a key focus of
this Subcommittee. Last month, I included language in the DHS
authorization bill to improve financial management and to
prevent waste at DHS's acquisition processes. Earlier this
year, I introduced the Disaster Assistance Recoupment Fairness
Act (DARFA) of 2011 to address the recoupment of improper
payments caused by FEMA error.
Today, we will hear from FEMA and the DHS Inspector
General. We will also get the perspective of two nongovernment
witnesses from the Project Management Institute (PMI) and
George Mason University's (GMU) Mercatus Center.
I look forward to positive dialog on the lessons learned,
improvements made and examples of best practices in
accountability that are ready to be incorporated from the
private sector into the Federal agencies, that can be applied
to FEMA.
With that, I would like to turn it over to Senator Johnson
and ask for his opening statement if he has one.
OPENING STATEMENT OF SENATOR JOHNSON
Senator Johnson. Well, Mr. Chairman, thank you for that. I
love these field promotions.
Senator Pryor. That is right.
Senator Johnson. So now I am Ranking Member. Normally, I am
down there.
I do not have a prepared opening statement other than to
say I appreciate the hearing. I certainly thank the witnesses
for coming here.
As a small government proponent, I am always looking at
where the government is more effective. At the local level,
State level versus Federal level.
And I am actually making a copy of a chart I have that we
will circulate to the witnesses a little bit later on to base
some questions on, but it really shows that we have really had
an explosion in things that are being declared Federal
emergencies and then requiring a Federal response. So that is
going to be sort of the thrust of my questions: What is the
best level for addressing some of these issues, and have we
tipped too far in the favor of Federal help in too many
circumstances?
But anyway, I look forward to your testimony. Thank you.
Senator Pryor. Thank you, Mr. Ranking Member.
Also, I would like to give the Subcommittee an update.
Yesterday, we had a speech on the floor and some other
developments that relate to some payments made by FEMA in a
flood in Arkansas, and this has happened all over the country,
where FEMA has wrongly paid out money to some people that have
suffered damages and floods, hurricanes, tornadoes, et cetera.
The reason I went to the floor yesterday is because FEMA
actually has now turned this over to the Internal Revenue
Service (IRS) for collection. And it was a $27,000 effort for
recoupment. Because of IRS's taxes, penalties, interest, et
cetera, it is now $37,000.
And so, I met with Treasury yesterday. I talked to
Secretary Timothy Geithner this morning, and we are working
through that issue. He put out a statement last night saying
that he is working with us, which is very true. So we are
working to try to get that resolved in a way that makes sense
for both parties.
I do not have any real update on that yet, but as it
currently stands, I still have those nominees held on the
floor.
What I would like to do now is introduce our witnesses, and
each of these witnesses could have, and maybe deserves, a long
introduction, with lots of interesting background, professional
experience, et cetera. But in the interest of time, will just
submit your full backgrounds and resumes for the record.
But our first witness today will be the Hon. Richard
Serino. He is the Deputy Administrator at the Federal Emergency
Management Agency--again, lots of background there.
But let me just move on to the second witness which is Matt
Jadacki, the Assistant Inspector General for Emergency
Management Oversight in the Office of Inspector General at the
Department of Homeland Security.
Third will be Maurice McTigue, Vice President and
Distinguished Visiting Scholar at George Mason University's
Mercatus Center. And he has a distinction that he is a former
member of parliament in his home country. So we appreciate you
here, and it is great to have you here.
And then, our final witness, Mr. Craig Killough, is the
Vice President of the Project Management Institute.
So again, I want to thank all of you.
We have a timer system today. We are hoping that everyone
will keep their opening statement to 5 minutes or less. We like
less, right? Do we not like less?
Senator Johnson. Five minutes is fine. I do not want to put
any pressure.
Senator Pryor. OK, so 5 minutes or less.
And we will submit your written testimony for the record.
Then we will have questions.
So Mr. Serino, would you lead off? Thank you.
TESTIMONY OF HON. RICHARD SERINO,\1\ DEPUTY ADMINISTRATOR,
FEDERAL EMERGENCY MANAGEMENT AGENCY, U.S. DEPARTMENT OF
HOMELAND SECURITY
Mr. Serino. Thank you, Chairman Pryor, Senator Johnson and
other Members of the Subcommittee that are not here right now.
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\1\ The prepared statement of Mr. Serino appears in the appendix on
page 27.
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But as stated, my name is Rich Serino. I am the Deputy
Administrator for FEMA. And it is an honor to appear before you
today on behalf of the Department of Homeland Security and FEMA
to discuss our quality assurance process and our internal
financial controls.
The American people and the disaster survivors all over
this country rely on FEMA to meet our mission. Because of the
serious responsibility, Administrator William Fugate and I took
important steps early on in this Administration to, first,
establish a culture of responsibility within FEMA; second, to
engage the whole of community in disaster response and
recovery. Our approach included a new doctrine, a new mission,
a new strategic plan, as well as new policies.
I am pleased to say, Mr. Chairman, that we are now seeing
the benefits of the new approach in how we are responding to
disasters and assisting the survivors of these disasters.
But our responsibility goes beyond the need to provide
quality service to disaster survivors. The American taxpayer
expects and, in fact, needs us to meet that mission and to
deliver those services in an efficient, cost effective manner.
This is especially important under the current economic
conditions that we now face.
Because of this, FEMA took steps to reduce errors and
increase effectiveness of how we provide services to disaster
survivors as we implemented numerous fraud prevention controls
designed to verify disaster survivors' information before the
applicant receives any Federal disaster assistance. For example
we now block automatic payments to high risk addresses such as
check-cashing stores, mail drops, cemeteries and jails.
The result of these efforts has been a reduction in the
improper payment rate from 14 percent in the aftermath of
Hurricane Katrina to currently less than one percent, in fact,
0.3 percent in fiscal year 2010.
In addition to improving these efficiencies in how we
deliver assistance to disaster survivors, we also took steps to
improve the acquisition management process at FEMA. In the
past, the Inspector General let FEMA know the need to make
significant improvements in this area, and we have changed a
lot of our processes to comply with those recommendations. For
example, we increased the number of prepositioned contracts
that are frequently used and frequently needed in times, to put
in place long before a disaster strikes. By doing so, we can
increase the speed of delivery and also the cost of providing
these supplies during disaster response. FEMA now maintains
between 40 and 60 of these prepositioned contracts that are in
place.
Another improvement we made is the creation of the Disaster
Acquisition Response Teams (DARTs). These teams are made up of
skilled experts who can quickly deploy to our joint field
offices or regional offices to provide contract administration
and oversight for large disaster contracts in the field.
These teams have already had an impact on how we do
business. For example, after the flooding in North Dakota, in
Minot, the DART staff were able to streamline some of the
procurement processes of housing of disaster responders from
which was an average 30-day process down to only 3 days, which
allowed us to focus the need instead on addressing the needs of
survivors.
Following Hurricane Irene, DART members were also
prepositioned in the field so they could provide contracting
support for housing inspection missions as soon as they were
required, including utility contracts, temporary housing unit
pad leases and multifamily repair program contracts.
During the past 2 years, we have worked especially hard to
improve how we manage the Disaster Relief Fund (DRF), the main
budget account we use to assist States as they respond to
recover from disasters. We took steps to change how we expend
the DRF resources and improved the closeout process for older
disasters so we could bring updated funds back to the DRF. In
fiscal years 2010 and 2011, by continually reviewing and
identifying and recovering from these unobligated funds from
previous disasters, FEMA was able to recover more than $4.7
billion in unobligated funds to the fund.
FEMA has found other efficiencies to stretch out the DRF
relief fund dollars. We worked quickly to right-size the number
of personnel we need in a disaster field office, but also,
working with our State partners, we have created some virtual
Joint Field Offices (JFOs) that are run out of our regional
offices. For example, during the 4-month period earlier this
year--last year, In Region 3, we realized the savings of $9.5
million by using virtual JFOs and physical offices.
When Administrator Fugate arrived to FEMA, one of the
things we also created was FEMAStat, which is a new ongoing
management process. This tool facilitates performance-based
assessments by redefining metrics and conducting milestone-
based reviews. Included in the new process is our programs have
helped identify trends and gaps that are important to improving
the ability to meet our mission. FEMAStat is improving
transparency, information sharing and customer support as well
as program monitoring.
In conclusion, FEMA recognizes the need to balance quality
customer service and providing disaster assistance quickly but
maintains the responsibility to be a good steward of the
taxpayers' money. All the while, we still have work to do, and
I am proud of the progress we have made in the last 2 years to
ensure FEMA is run in a cost efficient, effective manner.
I look forward to working with this Subcommittee and our
many partners at the Federal, State and local levels as we
continue to progress, to improve efficiencies, to increase
efforts, to promote disaster response, recovery, and
preparedness within the whole community.
Thank you again for the opportunity to appear before you
and look forward to answering your questions.
Senator Pryor. Thank you. Mr. Jadacki.
TESTIMONY OF MATT JADACKI,\1\ ASSISTANT INSPECTOR GENERAL,
EMERGENCY MANAGEMENT OVERSIGHT, OFFICE OF INSPECTOR GENERAL,
U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Jadacki. Good morning, Chairman Pryor, Senator Johnson.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. Jadacki appears in the appendix
on page 34.
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My name is Matt Jadacki. I am the Assistant Inspector
General for Emergency Management Oversight in the Department of
Homeland Security's Office of Inspector General. Thank you for
the opportunity to discuss FEMA's quality controls and business
practices.
Since the Post-Hurricane Katrina Emergency Reform Act of
2006, FEMA has made great strides in improving and
strengthening disaster preparedness, interacting with other
Federal agencies and assisting communities to recover after a
disaster.
Today, I want to focus my remarks on three key areas: fraud
prevention and internal controls, acquisitions, and the
Remedial Action Management Program. These areas and others are
discussed in my written statement, are covered in upcoming
department-wide management challenges reports and in numerous
FEMA-specific reports we have issued over the last 2 years.
In March 2011, I testified before the Subcommittee
regarding FEMA's efforts to recoup $643 million in potentially
improper disaster assistance payments beginning in the
aftermath of Hurricanes Katrina and Rita. As of September 29,
2011, almost 33,000 notices of debt have been mailed, over 500
people had their claim debts terminated after utilizing the
appeals process, and FEMA has recouped more than $3 million.
The speed at which FEMA disburses assistance to individuals
through its Individuals and Household Program results in the
program's susceptibility to fraud. This susceptibility was
increased during the response to Hurricane Katrina because FEMA
disabled some internal control functions to speed up its
response to the catastrophic disaster. More recent reports
indicate that FEMA has made significant internal control
improvements, including identity and address verifications, and
inspections prior to approving assistance.
Our review of FEMA's fraud prevention efforts noted that
despite the assistance programs' continued susceptibility to
fraud and abuse, FEMA has not implemented formal fraud
awareness training mandated by the Post-Katrina Reform Act.
Further, FEMA has not staffed the Fraud Prevention and
Investigative Branch nor has it provided the authority
necessary to review programs and agency-wide recommended
improvements in internal controls.
FEMA has made improvements in its internal controls since
Hurricane Katrina but more needs to be done. The culture at
FEMA is to get the money to disaster survivors as quickly as
possible, but this commendable attitude needs to be tempered
throughout the organization by an increased emphasis on
providing assistance to only eligible disaster survivors.
Although FEMA has developed and strengthened acquisition
management policies and processes, it continues to face
challenges. For example, weak internal controls have resulted
in multimillion dollar contracts with vague and questionable
requirements and no performance measures. Agency employees
responsible for managing and monitoring the contractors do not
always receive written guidance or training on how to evaluate
contractor performance or certify billing invoices.
FEMA has made progress in recruiting and retaining a
workforce capable of managing complex acquisition programs.
Nevertheless, FEMA's contracting program continues to face
workforce challenges.
FEMA has made great strides in improving its Contracting
Officer Technical Representatives (COTRs), cadre. However, many
trained COTRs have never been assigned to a contract and are
unsure of their ability to be effective.
We have also recommended that FEMA establish an overarching
sourcing strategy. Headquarters, regional and local FEMA
representatives were ordering goods without communicating to
their counterparts at other locations. As a result, goods were
ordered, were not needed or purchased from the wrong source or
at the wrong time.
We recommended that FEMA implement a single ordering
concept to coordinate all sources and decisions made through
the logistics section. FEMA is now making progress in adopting
a single point ordering concept.
FEMA's Remedial Action Management Program (RAMP), is
intended to identify lessons learned and best practices, manage
the subsequent remediation of issues, and share lessons learned
and best practices. FEMA regions are responsible for their
after-action reports and for collecting and transmitting to
FEMA headquarters lessons learned and best practices identified
in those reviews.
FEMA officials had not always conducted after-action
reviews to identify lessons learned and best practices, and
when the reviews were held, lessons learned and best practices
were often not converted into policy. However, in some cases,
informal discussions were held in lieu of the RAMP review, in
other cases due to the magnitude of the disaster and other
circumstances.
In May 2010, the server which housed FEMA's program
database of lessons learned failed, and FEMA lost access to the
lessons learned and best practices data. Recently, this was
restored, and FEMA needs to conduct after-action reviews for
all disasters and disseminate the data collected more widely.
FEMA has made progress in many areas we reviewed. However,
although corrective plans have been developed, implementation
has been slow. FEMA needs to increase oversight of key
management issues to ensure implementation of initiatives is
sustained.
Many recommendations in our audit of FEMA operations remain
open. We will continue to work with FEMA to ensure that
corrective action plans are developed and that progress is made
to fully implement the recommendations.
In conclusion, FEMA is an agency that is in a constant
state of flux. Priorities, plans, initiatives, draft guidance
and working groups often, understandably, take a back seat to
disaster response and recovery, and the momentum toward
finalization and implementation of key initiatives is slowed or
lost.
Involved in more than 87 Presidentially declared disasters
this year alone, FEMA must continue to make progress in
addressing its major management challenges, and must continue
to improve in areas such as fraud prevention and acquisition,
and implement lessons learned and corrective actions if it is
to be an effective partner in emergency management.
Mr. Chairman, this concludes my prepared remarks. I would
be happy to answer any questions you or Senator Johnson may
have.
Senator Pryor. Thank you. Mr. McTigue.
TESTIMONY OF HON. MAURICE MCTIGUE,\1\ VICE PRESIDENT AND
DISTINGUISHED VISITING SCHOLAR, THE MERCATUS CENTER, GEORGE
MASON UNIVERSITY
Mr. McTigue. Thank you, Chairman Pryor and Senator Johnson.
---------------------------------------------------------------------------
\1\ The prepared statement of Mr. McTigue appears in the appendix
on page 43.
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I have been in the United States for 15 years now, at the
Mercatus Center at George Mason University. I came to the
United States from Canada where I spent 4 years as New
Zealand's Ambassador and also Ambassador to the Caribbean, and
prior to that, spent some time as a member of parliament and as
a member of the New Zealand Cabinet. Some of my comments are
therefore based upon that background of experience, and some of
those experiences may be valuable to the work that you do here
in Congress.
When I look back at the role of the U.S. Government in
disaster, that role goes back to about 1803 and the fires that
occurred in the harbor of Portsmouth in New Hampshire. And the
interesting thing about that disaster is that it has always
been controversial and it always will be controversial. So I do
not think we are ever going to get to a State where the
activities of FEMA are going to be without criticism.
Second, because you are always, in an operation like FEMA,
dealing with distressed people, mistakes are going to be made,
and the good should not be prevented by trying to be absolutely
certain that no mistake is ever made.
One of the successes, in our view, having looked at FEMA
for over 10 years and every other major organization in the
Federal Government, was when we did something called the
Scorecard, which analyzed and looked at how accurately
departments reported on their success and whether or not that
information was appropriate to the accountability of that
organization. We picked out FEMA as one of the turnaround
organizations of the 1990s.
What made it a turnaround organization? I think it was the
vision that James Lee Witt came to that organization with. And
as he said to me on one occasion when I was talking to him,
``our job is to put back together the lives of individuals,
communities and States, and to do that as quickly and as
appropriately as possible.''
So, some of the things that he did seemed to be
counterintuitive, one of which was to spend more time on
training and preparing the assessors in the field, and then to
be prepared to rely more on the judgment of those people. And
he actually found that too many layers of oversight actually
contributed to errors rather than reducing them.
So, I think that is something that should be borne in
mind--that additional layers of oversight may not necessarily
improve the accuracy rate, but they may also, at the same time,
destroy the success that you are seeking in terms of putting
back together people's lives as quickly as possible.
Senator Johnson, you made some comments that I agree with,
and that is that maybe FEMA is being asked to deal with too
many situations that do not really constitute an emergency or a
disaster. Some of that may be the definitions that are used by
FEMA, but some of that may also reside right here with
Congress, and that Congress has asked FEMA to address more and
more issues that may not properly fit into that category of
being a disaster or an emergency.
There is the danger of unintended consequences by going
down that course, and that local communities will not do the
things that they should do to try and make the risk of harm in
the face of a disaster or adverse event less likely to happen.
In my view, a wet and windy day is not an emergency event,
and sometimes we tend to see wet and windy days as something
that is being supported by FEMA. I think that is inappropriate
and, in the long run, will probably produce adverse results.
Can I just finally say that listening to the radio this
morning, Mr. Chairman--and you talked about the case that has
just come up--one of the things that might help to deal with
that case, and something that was used by the New Zealand
government back in the late 70s when we were trying to deal
with adverse payments and mistakes, was to make the decision
that the government would make no payment to anybody who did
not have a bank account. In the future, we would not write
checks to anybody.
As a result of doing that, and the protections you can put
into a system like that, the level of adverse payments dropped
by 33 percent.
It is just something that is worth thinking about. It is
not, in my view, a real hardship to ask anybody who is going to
be the recipient to have a bank account before they can receive
moneys from the Federal Government.
Finally, some of the work that we did showed that local
networks were very good at helping in disasters, whether they
be voluntary organizations like churches or ethnic groups. The
Vietnamese Society in New Orleans was particularly successful
in putting back together their social group. Using those groups
is probably something that FEMA should work on and that they
should think about how you are able to support and activate
those groups, rather than trying to take a command and control
approach.
My final comment is that when I look at FEMA and the things
that govern it, it has an enormous number of laws that it is
responsible for. Some bright people, between now and sometime
in the future, should consolidate all of those laws into an
emergency management act that deals with all of those laws,
makes them comprehensive and understandable, and then repeal
all the others laws.
If you are not going to repeal all the other laws, please
do not start. It is by adding to but not taking away at the
same time, that we get the complexity and we often get the
contradictions.
Thank you very much, Mr. Chairman.
Senator Pryor. Mr. Killough.
TESTIMONY OF CRAIG KILLOUGH,\1\ VICE PRESIDENT, PROJECT
MANAGEMENT INSTITUTE
Mr. Killough. Chairman Pryor and Senator Johnson, my name
is Craig Killough. I am a Vice President with the Project
Management Institute (PMI). I appreciate the opportunity to
participate in this important hearing and speak to the benefits
of effective program management and our extensive research in
program management and disaster recovery.
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\1\ The prepared statement of Mr. Killough appears in the appendix
on page 113.
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The Project Management Institute is the world's largest
project management membership association, with more than
600,000 active members and credential holders worldwide,
including large chapters in Arkansas and Kentucky.
Program management delivers a competitive advantage by
producing positive outcomes for organizations both in private
industry and in government. Adoption of program management
standards and strong support of the practitioners who are
managing programs provide benefits that include increased
efficiency and improved decisionmaking, both of which are
critical in disaster response and recovery.
If I were to leave you with three thoughts in the time
available for me today, they would be:
First, organizations and governmental bodies that use
consistently applied program management standards and qualified
program managers are more successful than organizations that do
not.
Second, the rapid response inherent to disaster recovery
requires prepositioned program management processes and
qualified people.
And third, the entire government would benefit from broad
adoption of program management standards and the creation of a
job classification and defined career path for program and
project managers.
With reference to my first point, utilizing global
standards is critical to the program management profession and
to government because they ensure that a basic program
management framework, lexicon and process is applied
consistently across public and private organizations and
agencies charged with disaster recovery. The most successful
organizations have learned that employing program management
techniques and creating a culture focused around program
management is vital.
PMI's research found that organizations using standard
practices, along with formal training for program management,
perform better by considerable margins. High performing
organizations that use standards, and support certification and
training, demonstrate 90 percent success rates on achieving
business results while low performers achieve just over 34
percent.
In 2010, PMI conducted an analysis of successful government
programs. Program managers from a wide variety of government
agencies shared success factors and best practices. The most
successful government programs start with a firm grounding in
the fundamentals; that being experienced and well trained
program managers and standardized program management practices.
Combining this foundation with clear objectives and domain
expertise creates a ripple effect of increased team morale and
better intradepartmental collaboration, which perpetuates a
cycle of success.
The Army Corps of Engineers (ACE) noted a cost reduction of
between 20 and 30 percent from implementing a policy of using
trained program managers and a more systematic approach to
managing their programs.
To my second point, relating specifically to disaster
relief, program management expertise has many practical
applications for government, particularly for FEMA's primary
mission. Disaster relief presents unique challenges because of
the inherent urgency and high risk. Program management
practices allow a disaster recovery team to stay organized and
focused and to implement solutions a community needs after
being struck by a disaster. Having these capabilities on hand
and ready to deploy is critical to adequate response.
Recognizing this need, PMI published ``Project Management
Methodology for Post-Disaster Reconstruction,'' in response to
the Asian tsunami and Hurricane Katrina. This is a methodology
for use in a disaster recovery field where providing the kind
of leadership and clarity of thought needed to help in the
reconstruction effort. Reconstruction project management is
about solving problems and delivering intended results through
an organized, structured methodology.
We also recently published another study on aid relief
projects, which was submitted to the Subcommittee for the
record.
Finally, we believe that best practices should be adopted
in every agency. In my written testimony, I have outlined six
recommendations for the Subcommittee to consider. We believe
creating more effective and efficient accountable government
can be achieved by adopting these suggestions.
Mr. Chairman, I would like to commend you on being
proactive in this area by advocating for language to improve
program management in the DHS authorization bill approved by
the full committee in September.
Thank you again, Chairman Pryor and the Subcommittee on
Disaster Recovery and Intergovernmental Affairs, for the
opportunity to speak here on behalf of the Project Management
Institute. I will be happy to answer any questions you may
have.
Senator Pryor. Thank you, and I want to thank all of our
witnesses for your testimony today.
Let me start by saying that I want to make sure that FEMA
has in the agency a culture of accountability. I am not sure
that has always been the case there. Like Mr. McTigue said a
few moments ago, I think it probably was the case there when
James Lee Witt was there, and then it went through kind of a
period in the wilderness, so to speak. And I think you are
trying hard to get that accountability back.
And I appreciate all of you--Mr. Jadacki for your work in
looking at FEMA and making several recommendations on how we
can increase that culture of accountability.
So Mr. Serino, let me start with you if I may. I know that
you, the agency--it appears to me at least the agency has
worked hard to reestablish that and really make that a core
value in the agency.
But the Inspector General has made recommendations, and I
am not sure you guys are following up on one of those. I want
to make sure there is formal fraud awareness training with your
employees, with your workforce, to again build that in with
your people before any disasters happen. I know disasters are
going on all the time, but we need to make sure that they have
fraud awareness training, agency-wide.
Can you give me an update on that? Are you all doing that
or trying to do that?
Mr. Serino. What we have done, Mr. Chairman, is we have for
all of our personnel that are in the procurement office, all of
our COTRs, we have increased the amount of training for all
those personnel.
Senator Pryor. And how much training is involved there?
When we talk about fraud awareness training, what are we
talking about? Is that a 1-hour thing? Is that a weekly thing?
Mr. Serino. Well, for the people in that specific office, I
can get the exact number of hours, but it is pretty in depth
and trained for the folks that are assigned to that office--the
COTRs, the contracting officers. Those folks go through
substantial training and through what we call our FEMA
Qualification System (FQS), specifically for those personnel in
that office. I will get you the exact number of hours, but it
is substantial, that they go through.
In addition to that, for all of our personnel, we are
making them aware of that, and we are going through the process
of making sure that all of our personnel receive that training.
information for the record
Since 2007, in compliance with the Post Katrina Emergency
Management Reform Act, FEMA's Fraud Prevention and
Investigation Branch has conducted Fraud Awareness and
Detection training for a diverse audience. The training has
been provided to more than 1000 FEMA employees to include
PFT's, CORE's and DAE's as well as to other Federal and State
personnel. Most recently in August 2011, the training was
provided to approximately 600 employees of FEMA's Texas
National Processing Service Center (NPSC). The Agency training
is on-ongoing and will be provided to the Virginia and Maryland
NPSC's in FY12.
The training consists of a 2-hour classroom session. It
encompasses the identifying, detecting and reporting of fraud
in FEMA Programs as follows:
1. FEMA's responsibility--Good stewardship of tax payer
dollars
2. The definition of Fraud
3. The cost and effect of Fraud
4. Analysis of Fraud
5. Detecting Internal and External FEMA Fraud
6. Preventing Fraud
7. Reporting Fraud
Senator Pryor. And so, that is going on now?
Mr. Serino. We are in the process of doing that. Some of
our personnel are getting it, yes.
Senator Pryor. OK. So you trying to implement it system-
wide. Is that fair to say? But you are in process?
Mr. Serino. Yes.
Senator Pryor. Is that a fair characterization?
And also, in your Fraud Prevention and Investigation
Branch, I think I said a few moments ago that at one point you
had a very small staff there. I think it was in the single
digits. And has that changed, and if so, why and if not, why
not?
Mr. Serino. What we have done is we have increased the
staff there. We have also increased the accountability for
that. It is part of our weekly reports that we get. We have
weekly meetings with all of our senior staff. In part of that
report out, we get what the current status is on the fraud,
waste and abuse of that fraud unit, what they are pursuing,
what the current dollar amounts are that they are going after,
and the number of cases they are after.
So what we have done is increase the amount of oversight
with them at the highest level, that they report out on a
weekly basis to the entire senior staff, including the
Administrator and myself, on where we are with those current
numbers.
Senator Pryor. Mr. Jadacki, let me ask you. In your
capacity in the Inspector General's office there, on something
like this, you want to make sure that they are doing the fraud
awareness training and those types of things. I know you have
made a set of recommendations. Do you monitor those
continuously, or do you just come back maybe once a year and
look and see what kind of progress they have made?
Mr. Jadacki. After we issue a report with formal
recommendations, within 90 days, we request and require a
corrective action plan. And based on the corrective action
plan, we will say this plan meets the intent of this
recommendation or it does not.
So we resolve the recommendation or leave it unresolved
until they do it, but we continuously take a look at that
periodically. We meet biweekly, or every other week, with
FEMA--to discuss what is the status of the recommendations,
what is going on.
And also, included in our semiannual report to Congress we
have to report the status of recommendations that we made to
the agency, whether they have been implemented or not.
We have been watching closely because we get a lot of
questions about that, not only from this Subcommittee but from
a lot of you, there is a lot of interest out there, both with
Congress and other folks, with the fraud prevention unit
itself.
And obviously, we have a vested interest too because a lot
of the recommendations or things that the fraud prevention unit
identifies in FEMA are referred to us, and we ultimately have
to resolve those things, whether criminal or not. So this is
something that is near and dear to our heart and we monitor on
a regular basis.
I do want to expand on one thing. It is great that the
contractors are getting the fraud awareness, but really, people
in the front line need to get it too--the folks that are
actually taking the input from the disaster survivors. There
are certain red flags out there. They should be trained to
identify those and turn them over.
There is fraud in debris removal. There is also fraud in
public assistance programs. It is great that FEMA is starting
on the contractors, but I think in all aspects of disaster
assistance there are elements of fraud we have found over the
years.
I think it is critical that FEMA maintain and expand their
fraud awareness programs.
Senator Pryor. Mr. Serino, do you want to comment on that?
Mr. Serino. We are going to expand that, as I said earlier.
Senator Pryor. OK. And so, what is your timetable in
getting that fully implemented for all your folks on the ground
that are out there handling these disasters?
Mr. Serino. I do not have the time line for that, but we
will certainly get that to you.
Senator Pryor. OK.
Let me ask another question, Mr. Serino. You gave some
great statistics a minute ago about your error rates. I think
that you said they went from 14 percent? Was that during
Hurricane Katrina itself or during that time period?
Mr. Serino. After.
Senator Pryor. And then, they have gone down to 0.3
percent, which those are great numbers.
Do you attribute the big drop-off there in the fact that
the agency was so overwhelmed during that Hurricane Katrina
period and just there was a lot of, I hate to say mismanagement
but a lot of bad practices that crept in during that time?
Do you attribute it to that, or the fact that you really do
have better systems in place now and you are just running like
you always should have run, or is it a combination of both?
Mr. Serino. I actually think it is the latter. I think it
is a combination of both. I think it is a combination that
initially people were trying to get a lot of aid out to the
survivors.
But in subsequently increasing a lot of the controls that
we have in place, that we have put in place, before we actually
issue any money to survivors, I think that is key. But we have
been able to do that in a very cost efficient way but also have
been able to do it quickly.
We are still able to meet the needs of the survivors, that
we are able to get the housing inspection, somebody actually
out there looking at their homes, somebody actually through the
process and getting checks in survivors' hands who are
deserving but doing it in an efficient manner in actually a
fairly short period of time. The average time for a housing
inspection is about 3\1/2\ days from the time they call, and to
get a check to a person is about 2\1/2\ days.
But at the same time, we are able to increase the
efficiency of doing that and decreasing the error rate down to
0.3 percent, which is one of the best in the Federal
Government.
Senator Pryor. Well, that is always the balance that FEMA
has to strike. You have people that are in severe need and they
need it very quickly, but at the same time you want to make
sure there is not fraud and people trying to abuse the system.
So it is a hard balance.
And I love the fact that the error rate has gone down so
low and dropped so dramatically. That is a huge accomplishment.
Let me ask you about the error rate, Mr. Jadacki. Do you
all calculate that or does FEMA calculate it? Do you verify it,
or what?
Mr. Jadacki. Yes, we do not calculate that. FEMA calculates
that.
As part of the Improper Payments Elimination and Reduction
Act (IPERA), the IG will actually have to go in and validate
the methodology that is used by the agencies in a lot of cases.
So this year we will be taking a look at their calculations of
how they come up with their error rate.
Senator Pryor. Have you validated it yet?
Mr. Jadacki. No, we have not validated it yet. The first
time we are going to do it is this year. We have jobs underway
to do that right now. So we will take a look at that.
I will say that part of the reason the error rate dropped
is that a lot of controls were either circumvented or dropped
after Hurricane Katrina. Things that you would normally do,
checking Social Security numbers, for example, that control was
dropped, and that is a key control.
Senator Pryor. Is that just because they were so
overwhelmed?
Mr. Jadacki. They were so overwhelmed, and they felt there
was a need to get the money out quickly to individuals.
And there is always that balancing act. If you are too
slow, you are criticized for being too slow, but you are
checking all the controls. But if you act too quickly, again,
the pay-and-chase type thing happens.
Senator Pryor. So I am not trying to justify for Hurricane
Katrina, but it was almost like the mind set may have been that
if you get 10 people that are asking for a need and 9 of them
need it, let's get it to the 9. And maybe one does not need it,
and maybe there is fraud or whatever, but at least you are
getting it to the 9. Is that the decision that was made?
Mr. Jadacki. I do not know how that decision was made, but
that seems to be the consequence of whatever decision was made
to do that.
A lot of people who were not eligible took advantage of the
system for a number of reasons--because the controls were
dropped or that they were circumvented--and it did result in a
number of improper payments.
Senator Pryor. Thank you. Mr. Johnson.
Senator Johnson. Thank you, Mr. Chairman. Let me pick up on
that point in terms of fraud rate with Mr. Serino. How is that
measured?
I realize you have to verify methodology, but can you
just--I mean how do you measure it with any level of accuracy?
Mr. Serino. I do not have all the details, but I can get
that.
A lot of the times what we do is we actually look and as we
go back and look and see how many people that we met, we were
able to get there. We actually verify, as I mentioned earlier,
some of the addresses of where people go, what they--whether it
is a jail or the addresses people use, the Social Security
numbers, as well as actually sending somebody physically out to
the home, which in the past was not always done. But somebody
actually going to the home, looking at the home, speaking to
the people--that in itself is one of the most controls that we
have.
So a combination of all those is how we actually reach that
conclusion.
information for the record
FEMA has performed improper payment testing over identified
high risk program since 2006, and our Individual Assistance
Individuals and Households Program was the first tested.
Improper payment testing uses agreed-upon audit procedures that
ensure program compliance with purpose, period of performance,
and payment. We sample a statistically--valid sample of all
disbursements made during the prior year and extrapolate the
error rate across the population. The Individual Assistance
Program is a good example of how a program that relaxed
internal controls during a disaster recovery resulted in a high
improper payments rate. These problems were identified through
both the DHS Inspector General's external reviews and FEMA's
own Improper payments testing. FEMA implemented the IG's
recommendations and, through our corrective action plans, we
have been able to improve controls for improper payment
testing. Today, the program does their own testing throughout
the year and that testing will be further reviewed in
accordance with the Improper Payments Information Act of 2002.
Senator Johnson. So it is obviously after the fact. It is
more of an auditing process and really more statistics-based.
Am I correct? I mean there is really no certainty to this
number. It is an estimate, correct?
Mr. Serino. Well, we actually have an audit that is done by
the National Processing Center (NPC), where people are able to
come in. And we have a large number of people that can handle
the influx, large numbers of those, and we actually have
agreements in place with the IRS, for example, if we need to
increase the number of people to take those calls.
During Hurricane Irene, we were receiving tens of thousands
of calls a day and then processing those and finding out ahead
of time. That is where we are able to find out ahead of time
whether or not there is any potential that people did not meet
that. So we were able to verify, get all that information right
up front.
Senator Johnson. So do you split out then actual fraud
versus potential fraud?
I mean do you include that in your--I mean people that are
trying to commit fraud.
Mr. Serino. Well, we actually look, and those are payments
that we would not make. If we do not have that right
information, those are payments that are not made.
Senator Johnson. Then those would not be included in your
statistic then.
Mr. Serino. No, because these are payments that we made.
Senator Johnson. OK.
Mr. Serino. We would not include payments that we did not
make.
Senator Johnson. OK.
Mr. Jadacki, let's talk about that $643 million worth of, I
guess, fraudulent payments. The figure I have is that is
160,000 people, individuals. Is that 160,000 claims?
Mr. Jadacki. That is correct. Well, they were not potential
fraudulent payments. They were improper payments, potential
improper payments that were made during Hurricanes Katrina and
Rita.
And there was a hold on that because of a court order,
because apparently due process was not followed and a judge put
a hold on it, but they were held for several years.
So in our report, we identified the potential improper
payments and recommended that FEMA go through their continued
due process and identify whether in fact they were proper,
improper, and if they were fraudulent payments, they would
actually turn them over to us. We understand that FEMA is in
the process of reviewing most of those, and they have made
pretty good headway on that.
And I do not know the exact figure based on their review of
how many cases they turn over for fraud. I think it is pretty
low.
But it is critical they are not fraudulent payments. They
are improper payments that could potentially be fraudulent
based on further review by FEMA.
Senator Johnson. Can you typify? I mean improper is a term.
Can you typify what, put some meat on that bone?
Mr. Jadacki. Yes. An improper payment is anything that is
not made for the correct amount to the correct person for the
correct thing, in a nutshell.
So it could be an underpayment. It could be an overpayment.
It could be an ineligible payment if the recipient is not for
it.
A fraudulent payment is where somebody is not eligible and
they either fabricate an application or they provide
information that would deem them eligible at a later time.
Whether making up a Social Security number or whether they
provide a bogus document that would provide evidence of
residency for a house or something like that, or a Social
Security number, those would be fraudulent payments.
So an improper payment is something that is not correct for
whatever reason. A fraudulent payment is when the person is
just simply not entitled; they are trying to defraud the
government.
Senator Johnson. Could either you or Mr. Serino tell me
what is the No. 1 cause of improper payment?
Mr. Jadacki. Based on a review of the improper payments, it
is not validating a lot of the information on an application
when you are dealing with individuals.
FEMA had a lot of problems after Hurricane Katrina because,
as you mentioned, one of the best controls FEMA has is actually
going to visit property with the property owner. They provide
evidence that they live there, or it could be a utility bill.
It could be a deed, something like that.
In the case of Hurricane Katrina, a lot of the homes were
just simply washed away. And a lot of people, they literally
went to all 50 States, and it would be impossible to bring them
back.
So as a compensating control, FEMA actually took aerial
views and said OK: If you establish, if you say you lived in
this area and it had two feet of water, you would get X number
of dollars. If you had eight feet of water, you get X number of
dollars.
So it was really they did not have the controls, or the
controls were not able to be used. They had controls, but they
were not able to use those controls.
And then, people found out about that. They found out yes,
I lived in this place, or there are 10 people using the same
thing. There were cemeteries that people applied for assistance
on. So those are the improper payments.
There are cases where there is insurance information. So
somebody can get a payment for FEMA. FEMA later finds out well,
that property was insured, so they are not eligible. So it is a
duplicate payment. So that would also be an improper payment,
not necessarily fraud, but it would be an improper payment
because the person was ineligible for duplicate payments.
Senator Johnson. OK. You said that you have--there are
30,000 notices trying to recover. Is it 30,000 out of 160,000?
Mr. Jadacki. Yes, as far as I know, there are 30,000 cases
that have been reviewed. I know they are in the process of
reviewing others.
I know there is a significant amount that after FEMA did
the review either the payments were adjusted.
I know there is a small amount--and I do not know the exact
numbers on that. We can do it as a followup--of actually where
FEMA sent out notices to collect the funds. And I think the
case in Arkansas is probably one of those that got caught up in
that.
Senator Johnson. How many cases like Arkansas do we have?
Mr. Jadacki. I would have to defer to FEMA on that one.
Senator Johnson. Mr. Serino.
Mr. Serino. It is really hard to say exactly, cases similar
to Arkansas that we have. But currently, 35,000 recoupment
notices have gone out to folks, and that is the vast majority
of them. And the rest will go out within the next month. In
November sometime, we will have all of those out.
So the vast majority of those already have gone out. Out of
what was originally the number of 168,000, we have--that number
has gone down quite a bit because we have gone through each one
of those and looked and seen what the issues are, as well as
talking to folks ahead of time.
Senator Johnson. So how many do you expect out of the
160,000 will receive notices?
Mr. Serino. As I say, about 35,000 have gone out, and that
is the majority of those. And then after that I cannot pin the
exact number because we are still going through them, working
through them.
Senator Johnson. Are those notices demand for payment then?
I mean is that going to be a pretty aggressive notice, or
is this just kind of request for additional information to
prove your claim?
Mr. Serino. Well, it is both. We actually changed the
letter. So it is in plain English so folks can understand what
we are asking them--that if they have to make a payment, but if
they have any questions at all that there is an opportunity for
them to come in and to speak with us if there is a need for
them to, whether it is to compromise the payment or to work out
a payment plan or to put in an appeal process.
And we encourage people to really, if there are any
questions at all, to put in that appeal process within the 30
days, and then we can followup with those. And they can do that
very simply, and they can talk to somebody, and we can do that
as an oral hearing over the phone if necessary. We have had
success that we have been able to compromise and terminate a
number of those.
Senator Johnson. OK. Thank you.
We will have another round, right?
Senator Pryor. Sure.
Senator Johnson. OK. Thanks.
Senator Pryor. Let me followup on that, Mr. Serino, if I
can since we brought up Arkansas there a few moments ago.
I am wondering if the way this got started in Arkansas was
that FEMA was not talking to each other within itself. In other
words, apparently, the problem began. We had a flood there.
That particular county had not passed the proper ordinance.
FEMA's people working the flood should have known that, and
they should have known when they deal with local people who
have a loss what benefits they might be eligible for and not.
So to me, that is a breakdown in internal communication.
From one side of FEMA to the other. I do not know if that is
fair, but that is my guess is how that started.
Have we fixed that problem within FEMA?
I mean now that folks are working on the ground do they
understand exactly what benefits people are eligible for and
not?
Mr. Serino. One of the things that we have been able to do
is to implement a number of the controls that I talked about
earlier, and specifically, when people call up we are able to
verify the address, and that is able to communicate that to the
survivors and tell them the information that is needed. If that
is not necessarily caught on the first time around, we are
certainly going to be able to catch that when somebody actually
goes out.
So we put in a number of controls over the last couple
years to actually catch a lot of those that in the past we had
missed.
Senator Pryor. OK. In that particular situation, FEMA came
to this one couple. We will just focus on this one couple. FEMA
came to the couple's home. FEMA apparently took pictures, gave
them the forms, helped them fill out everything, said you are
entitled to this, helped them fill out the form, walked them
through the process.
They got $27,000. They put it all back into their house
just like they were supposed to. In the meantime, the local
couple was foregoing other assistance that was being offered
locally because they said we have FEMA's help.
There were local charities and civic groups and churches,
et cetera. Let us help you, and they said: No, FEMA is taking
care of us. Go take care of other people.
Nonetheless, 3 years later, they get a notice in the mail
from FEMA: Oh, by the way, we fouled up. We should never have
given you that money in the first place. So now you have X
number of days to give us $27,000 back.
And like I said, now it has been turned over to the IRS,
$37,000.
So just taking that one case, to me, that is money that
should have never gone out the door in the first place. And so,
has FEMA fixed that part, of where that money is just not going
out the door?
It sounds like your error rate is much lower. And are you
fairly confident that you have fixed that?
Mr. Serino. I am. I think if you look at where we were, at
a 14 percent rate down to a 0.3 percent. Are we going to say
never? I would like to be never, but 0.3 percent is the rate
that we are currently.
And I think it is important to realize that we are also
required by law to go after all improper payments.
Senator Pryor. Right.
Mr. Serino. As you are well aware, it is something that we
are required to do for any improper payments.
If it is fraud, we actually send those away for fraud
investigation. That is not a part of the recoupment. But part
of the recoupment for whatever the improper payment is we are
required to actually go through the process to do that.
And that is why we work with the survivors. We also work
with Members of Congress and their staffs to help us educate
folks that it is important for people to actually take the time
to put in those appeals because that is absolutely key for us
to be able to work with them, to see what we are able to do,
whether it is compromise part of that or all of it. I think
that is really important.
And we thank you and your staff. They have been working
with us on cases like this, and we want to make sure that the
survivors know that as much as it is important for them to
actually file those as well.
Senator Pryor. All right. Thank you.
Then also, all my colleagues need to understand this is not
going to be limited just to Arkansas. This is going to happen
throughout the country.
Mr. McTigue, let me ask you if I may. You mentioned James
Lee Witt's FEMA, and you talked about his vision for FEMA. How
would you rate FEMA during that time period because you have
studied it, in terms of their preparedness, their morale, their
ability to respond. And did they have best practices throughout
the agency, or were there weak spots even back then?
Mr. McTigue. It is pretty hard to make a general assessment
of that, but if we looked at some of the surveys that were done
of people working for FEMA in 1990, it was the least desirable
place to work in the Federal Government and by 2000 it was the
most desirable place to work in the Federal Government. I think
that tells us something about morale.
I think we also have to take cognizance of the fact that
during the decade of 1990s there were not major disasters that
occurred in the first decade of the 2000s. So it was not really
tested, but what we could see was that the feedback from
everybody was that there was a much greater level of
satisfaction of the performance of FEMA.
Then if we move to the 2000s, we saw the shock of September
11, 2001, which turned everything upside down, and FEMA then
placed a great deal of emphasis on preparing for terrorist acts
and, unfortunately, at the expense of being prepared for
natural disasters. And along came Hurricane Katrina, and they
were not as well prepared as they had been in the past.
I think that was part of the problem at that time, and
also, I have to say a failure of leadership at that time. It
did not have that leadership that is necessary to be able to
get on top of major problems like those that were demonstrated
during Hurricane Katrina.
Mr. Chairman, can I just volunteer another comment from the
discussion that has just gone past? And that is that from my
experience with having to deal with some of these as a minister
in my own country, one of the things that we did to try and get
out of the problem that you have at the moment with the number
of recipients of support now being asked to repay it.
In disaster situations, we would go in and assess the
damages that were to be paid to the individuals. And at the
conclusion of that, we would actually sign a contract between
that individual and the government's agent, and that was full
and final. And unless there was malfeasance or fraud or
outright lies, that could not be opened again.
So if the government made a mistake, it had to live with
that. And if the person used that guarantee from the government
in good faith, you could not take it away.
I think it is worth thinking about. This kind of event, I
think does do a great deal to break down public trust in
government generally and to destroy the reputation of the
organization.
This is going to be bad if you have 35,000 or 40,000 people
who are going to be subjected to this process over the next
whatever period of time. Finding a way forward would be a good
way of dealing with that. Thank you.
Senator Pryor. Yes, thank you for that.
I am going to turn it over to Senator Johnson because he
has to leave in just a few moments.
Senator Johnson. Thank you, Mr. Chairman.
Just a quick question on a point you brought up, how many
payments do we make to people who do not have checking
accounts?
I mean do we have any stats on that?
Mr. Serino. I, honestly, do not know right now.
Senator Johnson. OK.
Mr. Serino. I can get that for you.
information for the record
FEMA does not track whether or not applicants have a
personal bank account, only how they were issued payments. When
no personal banking information is provided, FEMA issues U.S.
Treasury Checks in lieu of an ACH payment.
LIn FY 2010, FEMA made 124,176 payments to
individuals with a Treasury Check instead of an ACH payment.
LIn FY 2011 to date, FEMA made 148,341 payments to
individuals with a Treasury Check instead of an ACH payment.
Senator Johnson. That would be a good idea. I mean if that
worked well. You said that in New Zealand that occurred?
OK. That is a common-sense approach.
Sorry I did not have this on a big blowup, but I passed out
this graph\1\ in terms of number of declarations by FEMA in
terms of the history of it, and it is pretty interesting.
---------------------------------------------------------------------------
\1\ The graph referenced by Senator Johnson appears in the appendix
on page 112.
---------------------------------------------------------------------------
Back in the Eisenhower Administration, we had a yearly
average of about 13 declarations; Carter Administration, about
44; now under George W. Bush, 129; and then President Obama,
141.
I have been living during that phase, and yes, we have had
years with big hurricanes and other types of disasters, but I
did not think there has been that dramatic a difference. So
obviously, what we consider a Federal emergency, something that
requires Federal assistance, has grown.
And I guess, Mr. McTigue, I would like to ask you in terms
of your evaluation of that, particularly based on your comments
about the ineffectiveness of layer after layer after layer. And
obviously, when the Federal Government comes in that is a
necessary additional layer to the problem.
Mr. McTigue. In response to your questions, Senator, I am
going to start from saying there are certain things that are my
responsibility and certain risks that I should be aware of. If
I am going to build my house on the flood plain or beside the
river because I like the view, I do not really expect, or I
should not expect, that you are going to bail me out when it
gets flooded every 2 or 3 years. That is something I should
deal with.
If there are other things that are risks that might be
dealt with by my local community, in terms of putting up flood
walls or doing something or other to ameliorate that risk, and
then if we go further it might be done at a State level.
If the Federal Government comes into those situations very
readily, you take away the accountability and the
responsibility for mitigating against those risks.
One of the things that were interesting for FEMA during the
period of James Lee Witt was that he became quite aggressive in
mitigating risk. And one of the facts that he used to use was
that for every dollar that they spent on risk mitigation they
saved two dollars in disaster recovery.
What kind of things was he talking about? In different
places, changed building codes, seeing that houses were more
securely fastened to their foundations than they had been if
you were in tornado alley, doing different things about how sea
walls were built and how dam protection and river protection
was done--all of those things learned from disasters and passed
on and saying if we do this, then the bill next time around is
going to be significantly less.
Taking that risk and putting it all on the shoulders of the
Federal Government just makes everybody else say ``Well, thank
God, I do not have to do that any longer.'' And I think that is
wrong.
Senator Johnson. OK. Anybody else want to just comment in
terms of the number of things, number of declarations, the
increase of that?
Mr. Serino. Well, I think a couple of points. I think this
year specifically has been a very busy year, percentage-wise.
If you actually look at this percentage-wise, at the number of
requests versus the number of disasters actually declared, we
are in the range of pretty much the last 10 years. We have
pretty much been consistently in that range for the number of
requests for disasters as well.
This year, as mentioned, there have been 10 and now up to
12 billion dollar disasters, not that FEMA has done, but it has
been a very busy year, some historic disasters--the flooding of
the Mississippi, the Missouri River, tornadoes that have broken
records, Hurricane Irene which is the second deadliest
hurricane to hit this country. So it has been a very busy year
for the natural disasters that have struck this country.
With that, I think it goes along with the number of actual
disasters that we have to clear. But percentage-wise, we went
back and looked at this actually, and it is actually for the
last 10 it is pretty consistent.
But one other point I think is important, to followup on
Mr. McTigue's, it was about we have engaged what we call the
whole community because we believe that along with the
mitigation purposes. But it is also a combination of not just
Federal, State and local and tribal governments, but it is also
bringing together the entire community. We have to bring
together the faith-based community. We have to bring together
the private sector. We have to work together with the Red
Cross.
And most important part of the team is the public and how
we are actually able to engage the public to take
responsibility for themselves, to work together so that they
can be prepared, so that they can have neighbor helping
neighbor.
What I have seen in disaster after disaster that I have
been to over the last couple of years and for my 37 years prior
to that is we talk a lot about first responders, but the first
people on-scene are usually neighbors and family and bystanders
that do make a difference--that if you have somebody who can
go, if they are prepared, and go help a neighbor, that in
itself is going to decrease the pull and the response on the
local first responders and emergency management up and down the
chain.
So it is really important for us to really look at this
whole community and to bring together the team of folks. And
the mitigation is a very important part of that. It can be on
the scales for tornadoes, but it can also be on individual
preparedness. And that is one thing that we are stressing, that
we have to do this together as a team.
Senator Johnson. OK. Well, I totally agree with that
comment, but to a certain extent the reality is different
because if you are really going to rely on local districts or
local governments we would not be increasing the size of FEMA.
And we have received back in 2000 the number of full-time
employees was about 3,400, and now that has risen to--well, in
2008, it was over 8,000. We have backed that down a little bit.
So going to Mr. McTigue's point, the number of layers I
think can actually make things less effective. And again, we
pulled it into a Federal responsibility as opposed to more
local control. So I guess I just want to ask that question.
I mean we have doubled the number of employees of FEMA. I
mean have we really gotten the bang for the buck there, or has
that actually created more problems?
And I would first like to go to Mr. McTigue and then listen
to the agency.
Mr. McTigue. Well, I think it would be disingenuous to
suggest that those 8,000 people do not have something to do.
They clearly do, and that is because Congress has been putting
more and more responsibility on them and States and communities
have been asking for them to do more and more. So we have to
take that into account.
I think the definition of what this agency is going to do
actually has to come from this institution here and decide what
is appropriate rather than say to FEMA you are not interpreting
the decisions of Congress in the right way. I think they
probably are. I think that you are asking them to do things
that should still be local responsibilities rather than Federal
responsibilities.
Senator Johnson. OK. I just want to quick give you an
opportunity.
Mr. Serino. Well, I think one of the things that we have
done is to decrease some of the layers, to actually put a lot
of the responsibility, authority and resources down closer to
the States and to the cities, and pushed a lot of that down to
our regional level so our regional administrators actually have
some of the authority in order to do that.
As far as the agency, over the past number of the years,
some of the times that you are talking, actually, a number of
areas came in from other parts of the government into FEMA,
specifically, our entire grants agency which brought in large
numbers of folks into the agency. That is cause for some of
that influx. We actually took some things that were not part of
FEMA, that actually came, to increase that number during that
period of time as well.
Senator Johnson. OK. Great. That answers the question.
Thank you, Mr. Chairman.
Senator Pryor. Thank you, Senator Johnson, and thank you
for being here today and pinch-hitting. You did a great job.
I just have a few more questions, and this will be our
final round. We are going to have some questions that come in
after the hearing, I am sure. So we will talk about that in
just a few moments.
But let me start with you if I may, Mr. Jadacki. You have
heard Mr. McTigue talk about this idea of a bank account and
tying a payment to a bank account. Have you looked at that from
the IG's perspective to see if that makes sense, if that would
cut down on problems?
Mr. Jadacki. No, we actually have not looked at that.
I know there was a number of ways FEMA provided expedited
assistance before--just cutting checks on the fly, the debit
card debacle that I have talked about before. But actually
requiring people have bank accounts, I think for the most part,
it would be a very good idea.
I still think you are going to get some reluctance by
individuals when the government is going to get their banking
information in order to qualify for assistance. I still think
that would be a problem, especially in some of the more rural
parts of the country where big government is a bad thing, as is
asking for that type of information.
So I think it is a good idea. I think it is worth looking
at, but I suspect you will get some pushback from certain
individuals.
Senator Pryor. Without having studied it at all, one
initial concern I might have is the actual percentage of people
in this country that have bank accounts because I do know that
I talked to Walmart a couple of years ago. And I do not
remember the exact statistic, but they have a number, and it is
something like 30 percent of the people that shop at Walmart do
not have a bank account. It is a big number, whatever the
number is. I have forgotten the exact number.
I think it is an idea that we ought to talk about and think
about and see if it is feasible and see if it would help. If it
helps, we ought to consider it. That is a good point.
Now Mr. Killough, I do not want you to feel like you have
been left out of this conversation.
Mr. Killough. Thank you, Mr. Chairman.
Senator Pryor. So let me just ask a question about--and I
hope I am directing it at the right person--about lessons
learned. I assume that part of what your organization does is
try to learn from experience and lessons learned.
Does FEMA have--I hate to say reputation. But do they have
a reputation of learning from past mistakes and past
difficulties?
Mr. Killough. FEMA, specifically, sir, I cannot talk
specifically about specific organizations because we do not
participate in that, but I can provide a little bit of insight
into some of the things that do work.
I was reading Mr. Serino's testimony on page 6, and there
is a section that says in there about improving coordination
strategies and developing doctrine.
And there is a vehicle that we can use here that is called
the Disaster Recovery Framework that allows for the definition
and what I call, or what I would refer to, horizontal and
vertical integration of dependent agencies and Federal, State,
local and Indian government agencies, in trying to coordinate
and understand responsibilities for actions in disaster
activities--the programmatic approach to defining those
responsibilities combined with adequate training and the
integration of training among the different layers of
government, all the way down to the individual citizen.
Now a couple of very good examples that are done that way
in the government right now are you have the Red Cross Center,
Clara Barton Center for Disaster Recovery Training in Pine
Bluff, and you have the DHS Training Center for Disaster
Preparedness in Anniston, Alabama. And what these two
organizations have effectively done is taken a programmatic
approach to first responders and training of first responders
to respond to chemical, biological and nuclear disasters,
domestic or outside domestic terrorism.
What they have done is they go through all levels of the
government in State, Federal, local, Indian territories, and
also through all of the organizations that would have the
occasion to respond, and have developed a program to react to
these potential huge disasters and then have integrated that
across governments throughout our country.
And I think it is a fine example. I mean it is right in the
Department of Homeland Security, that they are doing right now.
And to be able to take that from the administrative aspect
of how we respond in general to disasters, take a programmatic
approach, define what we need to do and adequately train
people.
The big issue here is people being prepared and trained and
having processes that are known throughout all of the agencies
that are responding, and appropriate responsibilities assigned.
The aspect of training is a very important one, especially in
one of these incidents.
I am a graduate of the Naval Academy and went through the
Navy Nuclear Propulsion Program. I could not dream of placing
an unqualified operator, not using approved procedures, in
charge of a nuclear propulsion plant.
Senator Pryor. Right.
Mr. Killough. Likewise, there are areas of the government
that ask untrained people to use, to create their processes, to
manage mission-critical programs of billions of dollars. And I
am not calling out FEMA. This is in general.
Senator Pryor. Right.
Mr. Killough. So the aspect of generally understanding that
managing these disasters takes definite skills, and they take
definite defined programs and processes.
So having people understand those processes, are trained to
execute them, can bring a little bit of sanity to chaos when
you are responding to disasters like this.
Senator Pryor. Right. That makes sense.
Well, listen, thank you all for coming today.
Like I said, we are going to leave the record open for 14
days, and I am almost certain that we will have a few questions
from at least a couple of the Senators that will come in, in
writing. So we would love a rapid turnaround on that.
But I want to thank you all for doing what you do, and we
all want a very strong, healthy, robust FEMA and great response
and great preparation for all kinds of disasters, including all
the mitigation that we can do.
So I want to thank all of you for being here and thank the
staff here for always doing a great job.
And with that, we will adjourn, and we will keep the record
open for 14 days. Thank you.
[Whereupon, at 11:45 a.m., the hearing was adjourned.]
A P P E N D I X
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