FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Congressional research reportApr 16, 2015

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FEMA’s Public Assistance Grant Program:

Background and Considerations for Congress

(name redacted)

Analyst in Emergency Management and Homeland Security Policy

(name redacted)

Research Assistant

April 16, 2015

Congressional Research Service

7-....

www.crs.gov

R43990

FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Summary

The Public Assistance Grant Program (PA Program) is administered by the Federal Emergency

Management Agency (FEMA) and combines the authorities of multiple sections of the Robert T.

Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288, as amended, the Stafford

Act). The PA Program is only available for states and communities that have received a major or

emergency disaster declaration through the Stafford Act (and in a more limited fashion, Fire

Management Assistance Grants). The PA Program provides grant assistance for eligible purposes,

including

•

Emergency work, as authorized by Sections 403, 407, and 502 of the Stafford

Act, which provide for the removal of debris and emergency protective measures,

such as the establishment of temporary shelters and emergency power generation.

•

Permanent work, as authorized by Section 406, which provides for the repair,

replacement, or restoration of disaster-damaged, publicly owned facilities and the

facilities of certain private nonprofit organizations (PNPs). PNPs are generally

eligible for permanent work assistance if they provide a governmental type of

service, though PNPs not providing a “critical” service must first apply to the

Small Business Administration for loan assistance for facility projects. At its

discretion, FEMA may provide assistance for hazard mitigation measures that are

not required by applicable codes and standards. As a condition of PA assistance,

applicants must obtain and maintain insurance on their facilities for similar future

disasters.

•

Management costs, as authorized by Section 324, which reimburses some of the

applicant’s administrative expenses incurred managing the totality of the PA

Program’s projects and grants.

FEMA will either award PA grants based on the estimated federal share of the total eligible cost

of the project or award grants on the federal share of actual eligible costs evidenced through

documentation from the applicant/grantee.

The federal government provides a minimum of 75% of the cost of eligible assistance, and this

cost-share can rise if certain criteria are met. The PA Program is appropriated for in the Disaster

Relief Fund (DRF). Between FY2000 and FY2013, PA accounted for approximately 47% of all

federal spending from the DRF. During this period, the PA Program provided approximately

$21.2 billion in federal grants for emergency work assistance, $30.2 billion in permanent work

assistance, and $1.2 billion in management assistance. Approximately $6.6 billion of these grant

amounts was provided to PNPs for both emergency and permanent work.

The PA Program authorities were most recently significantly amended by the Sandy Recovery

Improvement Act (Division B of P.L. 113-2, SRIA). SRIA established “alternative procedures”

for PA Program assistance, which has allowed FEMA to implement a Public Assistance

Alternative Procedures (PAAP) Pilot Program. These procedures revise a number of elements of

the PA Program, such as allowing grants for large, permanent work projects (facility restoration

projects over $120,000) to be based on fixed estimates, as opposed to actual cost basis; and

increasing the federal share of eligible costs when debris is removed more quickly by applicants.

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Given the importance of PA Program assistance to communities recovering from disasters, and

the amount of federal dollars spent on the assistance, Congress may consider several policy issues

related to the PA Program. For example, Congress may consider

•

Reviewing current FEMA policies implementing the authorizing statute and,

when desired, codifying or overriding the policies through further clarification in

law;

•

Evaluating major forthcoming changes to the PA Program authorized by SRIA

and an earlier law, the Disaster Mitigation Act of 2000 (P.L. 106-390);

•

Weighing options for decreasing the improper use of PA assistance by applicants,

perhaps by revising the conditions of management cost assistance or improving

the collection of data in the PA Program;

•

Expanding or restricting the eligibility of the PA Program, possibly to exclude

certain PNPs from assistance or to grant assistance to privately owned facilities;

•

Deciding if and how the PA Program should provide hazard mitigation assistance

on facility restoration projects; and

•

Defining the role of PA Program as it potentially overlaps with the disaster

assistance authorities of other federal agencies.

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Contents

Introduction...................................................................................................................................... 1

Key Elements of the PA Program .................................................................................................... 2

Eligible Applicants .................................................................................................................... 2

Eligible Types of Assistance (Categories of Work) ................................................................... 4

Emergency Work ................................................................................................................. 4

Permanent Work .................................................................................................................. 8

Hazard Mitigation Assistance for Permanent Work .......................................................... 10

Insurance Requirements for Permanent Work ................................................................... 11

Administrative Cost Assistance ............................................................................................... 12

Grantee Cost-Shares ................................................................................................................ 14

Appeal Rights .......................................................................................................................... 15

Methods for Awarding and Disbursing Grant Funding .................................................................. 16

Estimated Cost Basis ............................................................................................................... 16

Simplified Procedure “Small” Projects ............................................................................. 17

In-Lieu “Alternate” Projects.............................................................................................. 18

Improved Projects ............................................................................................................. 20

Alternative Procedure Fixed-Estimate Grants ................................................................... 20

Actual Cost Basis .................................................................................................................... 21

Possible DMA 2000 Grant Estimating Procedure ............................................................. 22

Public Assistance Alternative Procedures Created by the Sandy Recovery Improvement

Act .............................................................................................................................................. 24

Pilot Program Guidance .......................................................................................................... 24

Fixed Estimate Grants for Debris Removal ...................................................................... 25

Selective Availability of Alternative Procedures for Applicants ....................................... 25

Applicability of Alternative Procedures to Past Disasters ................................................. 26

Summary Analysis of Obligations for the Public Assistance Program .......................................... 27

Appropriations for the Public Assistance Program.................................................................. 27

Aggregate Spending on Public Assistance .............................................................................. 28

Public Assistance Spending by Type of Work, Category, and Project Size ............................. 30

Obligations for Private Nonprofit Facilities ............................................................................ 35

Obligations for Hazard Mitigation within the PA Program ..................................................... 36

Considerations for Congress .......................................................................................................... 37

Balancing the Level of Statutory Versus Executive Branch Guidance for the PA

Program ................................................................................................................................ 37

Evaluating Key Prospective Changes to the PA Program........................................................ 38

SRIA Alternative Procedures Pilot Program ..................................................................... 40

Grants Based on Estimates for Large, Permanent Work Projects...................................... 41

Improper Payments, Fraud, Waste, and Abuse in PA Program ................................................ 42

Management Cost Assistance ............................................................................................ 43

Limitations of Current PA Program Data for Congressional Oversight ............................ 44

Expanding or Restricting Permanent Work Program Eligibility ............................................. 45

Private Nonprofit Eligibility.............................................................................................. 45

Privately Owned Facilities ................................................................................................ 46

Hazard Mitigation Within the PA Program .............................................................................. 47

Implementing Executive Order 13960 for the PA Program .............................................. 50

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Clarifying the Role of the PA Program with Other Federal Agencies’ Disaster

Assistance Authorities .......................................................................................................... 51

Figures

Figure 1. Share of DRF Funding by Activity................................................................................. 29

Figure 2. Public Assistance Federal Obligations, FY2000-FY2013 .............................................. 30

Figure 3. Type of Work and Category as a Percent of Total Public Assistance Federal

Obligations, FY2000-FY2013 .................................................................................................... 31

Figure 4. Federal Obligations for Permanent Work and Emergency Work, FY2000FY2013 ....................................................................................................................................... 32

Figure 5. Small Projects by PA Work Category, as a Percentage of Total PA Obligations,

FY2000-FY2013 ......................................................................................................................... 34

Figure 6. Hazard Mitigation Obligations in the PA Program, FY2000-FY2013 ........................... 36

Tables

Table 1. Eligible Types of Assistance (Categories of Work) in the PA Program ............................. 4

Table 2. Summary Comparison of Large, Permanent Work Grant Estimation Procedures ........... 23

Table 3. Appropriations to the Disaster Relief Fund, FY2000 through FY2013 ........................... 27

Table 4. Average PA Obligations per Major Disaster by Quartile, FY2000-FY2013 .................... 33

Table 5. Number of PA Projects and Federal Obligations by Size and Type of Work ................... 35

Table 6. Summary of Differences Between Mitigation Assistance Programs ............................... 48

Appendixes

Appendix A. Brief Legislative History of the Public Assistance Grant Program .......................... 55

Appendix B. Worksheet Dataset Considerations ........................................................................... 57

Contacts

Author Contact Information........................................................................................................... 59

Acknowledgments ......................................................................................................................... 59

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Introduction

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.,

henceforth the Stafford Act) confers upon the President a broad set of authorities “to alleviate the

suffering and damage” of affected tribal, state, and local governments, as well as individual

citizens, from disasters.1 The Federal Emergency Management Agency (FEMA) of the

Department of Homeland Security (DHS) has been given the responsibility of administering

almost all of the President’s Stafford Act authorities through other law, a series of Executive

Orders, and a DHS delegation.2 FEMA has established the Public Assistance (PA) Grant Program

by combining the authority of multiple sections of the Stafford Act. The PA Program provides

financial grant assistance to states, tribes, and local communities both in the response to and

recovery from significant disasters. Between FY2000-FY2013, the PA Program has provided

$52.6 billion in grant assistance to help communities pay for an array of eligible response and

recovery activities, including debris removal, emergency protective measures, and the repair,

replacement, or restoration of disaster-damaged, publicly owned facilities and the facilities of

certain private nonprofit (PNP) organizations. The authorities of the PA Program were most

recently significantly amended by the Sandy Recovery Improvement Act (Division B of P.L. 1132, the Disaster Relief Appropriations Act, 2013; henceforth SRIA). For a brief legislative history

of PA Program authorities, see Appendix A.

This report provides background on key elements of the PA Program, such as the eligibility of

applicants, the types of assistance available, and the methods FEMA uses for awarding grant

assistance. Summary analysis of federal obligations for PA Program assistance is also provided

along important variables, such as the distribution of federal obligations across the PA Program

eligible categories of work assistance. The report concludes with discussion of several policy

issues that Congress may wish to consider when evaluating the PA Program in the future,

including considerations of significant prospective changes to the PA Program and the role of the

PA Program in the context of other federal agency disaster assistance authorities.

It is beyond the scope of this report to describe in full how FEMA administers the PA Program.

FEMA has many publicly available resources that explain the complexity of the PA Program in

greater detail than is provided in this report.3

42 U.S.C. §5121(b), Section 101(b) of the Stafford Act.

Section 504(a)(1)(8) of the Homeland Security Act of 2002, as amended (6 U.S.C. §314) directs the Administrator of

FEMA to assist “the President in carrying out the functions” of the Stafford Act and “carrying out all functions and

authorities given to the Administrator under that Act.” In addition, Executive Order 12148, 44 FR 43239 (1979), as

amended most recently by Executive Order 13286, 68 FR 10619 (2003), delegates Stafford Act authorities to the

Secretary of DHS, who in turn has delegated these authorities to FEMA in DHS Delegation 9001.1. The President

exclusively retains the authority to declare a major disaster or emergency under 42 U.S.C. §5170, Section 401 of the

Stafford Act and 42 U.S.C. §5191, Section 501 of the Stafford Act, respectively.

FEMA provides a considerable number of resources through its website on the PA Program, including a step-by-step

guide to the grant process, frequently asked questions, policy guidance on specific topics, etc., at

https://www.fema.gov/public-assistance-local-state-tribal-and-non-profit. There is also a full guide to the PA Program,

though this document has not been updated to account for changes made in recent legislation, most significantly SRIA.

See FEMA, Public Assistance Guide, June 2007, at http://www.fema.gov/pdf/government/grant/pa/paguide07.pdf.

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Key Elements of the PA Program

This section of the report describes key elements of the PA Program, such as major eligibility

considerations, the types of grant assistance provided, and the methods for disbursing grant

funding.

Eligible Applicants

In order to be eligible for PA grants, an applicant’s respective state or tribal government must first

receive a major or emergency disaster declaration from the President through Stafford Act

procedures.4 The key condition for receiving a declaration is that the disaster has consequences

“beyond the capacity” of the affected state/tribe and local communities to manage. In a more

limited fashion, PA grants are available to those areas receiving Fire Management Assistance

Grants (often colloquially called FMAG or fire “declarations”).5 In addition, PA grants are only

available in the localities of the state (or the tribal associated lands) specified in the Stafford Act

declaration.

Once the President has issued a disaster declaration, the primary grantee for all PA grants is the

state or tribal government receiving the declaration.6 However, as subgrantees (or, by another

name, applicants) PA grants are available to any tribal government, state, and local government

entity in the affected area.7 Local government is broadly defined in the Stafford Act, and therefore

grant assistance may be provided to local governmental bodies ranging from general purpose

municipal city governments, school districts, public hospitals, public water and sewage

authorities, to transportation districts.

Declarations are made through Section 401 and 501 of the Stafford Act (42 U.S.C. §§5170 and 5191, respectively).

For an explanation and discussion of the disaster declaration process, see CRS Report R43784, FEMA’s Disaster

Declaration Process: A Primer, by (name redacted).

The President is allowed to provide assistance using Section 403 essential assistance authorities for FMAGs (see 42

U.S.C. §5187(c), Section 420(c) of the Stafford Act). This type of PA assistance is described in the “Emergency Work”

section of this report. For more on FMAGs, see CRS Report R43738, Fire Management Assistance Grants: Frequently

Asked Questions, coordinated by (name redacted).

Tribal governments are eligible to receive a disaster declaration either separately from, or as part of, a declaration

made for the state in which the tribal lands primarily reside. See Section 401(b) of the Stafford Act (42 U.S.C.

§5170(b)).

These terms are defined at 42 U.S.C. §5122, Section 102 of the Stafford Act. State means “any State of the United

States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of

the Northern Mariana Islands”; Indian Tribal Government means “the governing body of any Indian or Alaska Native

tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian

tribe under the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a et seq.)”; and local government

means

(A) a county, municipality, city, town, township, local public authority, school district, special

district, intrastate district, council of governments (regardless of whether the council of

governments is incorporated as a nonprofit corporation under State law), regional or interstate

government entity, or agency or instrumentality of a local government;

(B) an Indian tribe or authorized tribal organization, or Alaska Native village or organization, that

is not an Indian tribal government as defined in paragraph (6); and

application for assistance is made by a State or political subdivision of a State.

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

PA grants are not available to private citizens or private companies,8 but they are available to

certain owners of private nonprofit facilities (PNPs).The Stafford Act provides a full definition,

with examples, of what constitutes an eligible PNP facility. The major condition of eligibility of a

PNP is whether it falls into a specific set of facilities named in law,9 or if it otherwise provides an

“essential service of a governmental nature to the general public.”10 This condition is included in

the PNP definition in the law, and is expanded on in FEMA’s regulations and policy guidance.11

The PNP must also be considered a nonprofit under the terms of the U.S. Internal Revenue

Service or under state law.12

The eligibility of PNPs for PA assistance changes based on whether the PNP is determined to

provide a critical service, which is a smaller subset of PNPs providing essential governmental

services. Critical services include power, water, sewer, education, emergency medical facilities,

and more.13 If the PNP provides a critical service, it may apply directly to the PA Program for

grant assistance to repair and restore its facilities as if it were a tribal, state, or local governmental

entity. If it does not provide such a critical service, but does provide an essential service of a

governmental nature, the PNP is first required to apply for assistance from the Small Business

Administration’s (SBA’s) Disaster Loan Program. If the PNP is denied assistance from SBA or

the total amount of loan assistance is less than the PA eligible damage, the eligible PNP providing

non-critical governmental services may then apply for assistance from the PA Program.14 Both

critical and non-critical PNPs may receive emergency work assistance, as described later in the

report.

Of recent interest to Congress, FEMA’s policy guidance instructs that PNP facilities are ineligible

for assistance when their space is “dedicated to or primarily used for religious, political, athletic,

recreational, or vocational purposes.”15 Currently, facilities owned by a religious entity are only

eligible to the extent that the facility primarily provides an eligible, essential governmental

service. For example, the school facilities of a church are generally eligible, so long as the

primary purpose of the facilities is for secular education.16 Congress has considered legislation to

In limited circumstances, essential assistance through Section 403 of the Stafford Act (42 U.S.C. §5170b), especially

emergency debris removal assistance, may be provided by FEMA to applicants to address public safety concerns on

private property. The recipient of the grant assistance is not the private entity, though the work completed may benefit

the private entity in the interest of saving lives, protecting and preserving property, or public health and safety.

Any “educational, utility, irrigation, emergency, medical, rehabilitational, and temporary or permanent custodial care

facilities (including those for the aged and disabled) and facilities on Indian reservations,” as defined at 42 U.S.C.

§5122(11)(A), Section 102(11)(A) of the Stafford Act.

As defined at 42 U.S.C. §5122(11)(B), Section 102(11)(B) of the Stafford Act.

See 44 C.F.R. §206.221(e) and (f) for expansions on the statutory definitions for PNPs, and for a full explanation of

FEMA policy on PNP eligibility, see FEMA, Private Nonprofit (PNP) Facility Eligibility, DAP 9521.3, July 8, 2007, at

http://www.fema.gov/media-library/assets/documents/89685.

Section VII.A.1 of FEMA, Private Nonprofit (PNP) Facility Eligibility, DAP 9521.3, July 8, 2007, at

http://www.fema.gov/media-library/assets/documents/89685.

See 42 U.S.C. §5172(a)(3)(B), Section 406(a)(3)(B) of the Stafford Act, for an illustrative list of examples of what

constitutes a critical service.

These requirements for critical versus non-critical service PNPs are established by 42 U.S.C. §5172(a)(3), Section

406 (a)(3) of the Stafford Act, and implemented by 44 C.F.R. §206.226(c). For more on the SBA program, see CRS

Report R41309, The SBA Disaster Loan Program: Overview and Possible Issues for Congress, by (name redacted).

Section VII.D.3 of FEMA, Private Nonprofit (PNP) Facility Eligibility, DAP 9521.3, July 8, 2007, at

http://www.fema.gov/media-library/assets/documents/89685.

See the example provided by FEMA of a fictional “Community Church School” at FEMA, Private Nonprofit (PNP)

Facility Eligibility, DAP 9521.3, July 8, 2007, p. A2, at http://www.fema.gov/media-library/assets/documents/89685.

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allow for the inclusion of “houses of worship” as an eligible category of PNP facilities, though

doing so may present constitutional legal issues.17

Eligible Types of Assistance (Categories of Work)

To administer the PA Program and describe the PA Program’s many eligible types of assistance,

FEMA combines the authorities of multiple sections of the Stafford Act into “categories of work.”

As shown in Table 1, FEMA has two major groups of assistance: emergency work assistance, and

permanent work assistance. Within these groups, there are categories of assistance labeled A

through G. Neither the Stafford Act nor FEMA’s implementing regulations specifically identify

these categories of work; rather these distinctions have been developed by FEMA in policy as a

means of managing and implementing the PA Program.18 While a generally useful tool to classify

the types of assistance available through the PA Program, the categories are not completely

distinct and similar projects could be subjectively classified under different categories in different

incidents (i.e., there is some “gray area” between the categories).

Table 1. Eligible Types of Assistance (Categories of Work) in the PA Program

Categories

Emergency Work

Stafford Act Authority

A: Debris Removal

§§403(a)(3); 407; 502(a)

B: Emergency Protective Measures

§§403(a)(3); 418; 419; 502(a)

C: Roads and Bridges

D: Water Control Facilities

Permanent Work

E: Buildings and Equipment

§406

F: Utilities

G: Parks, Recreational Facilities, and

Other Items

Source: Federal Emergency Management Agency, Public Assistance Guide, FEMA 322, 2007, at

http://www.fema.gov/public-assistance-policy-and-guidance; and CRS analysis of the Stafford Act.

Emergency Work

FEMA regulations define emergency work as “work which must be done immediately to save

lives and to protect improved property and public health and safety, or to avert or lessen the threat

of a major disaster.”19 The authorizing statute for emergency work is found in multiple provisions

of the Stafford Act, primarily in Section 403.20 Emergency work assistance is available to

communities identified in both major and emergency disaster declarations. More limited

emergency work assistance is also provided for areas receiving Fire Management Assistance

For a legal analysis and discussion of legislation, see CRS Report R42974, Federal Aid for Reconstruction of Houses

of Worship: A Legal Analysis, by (name redacted).

Descriptions of the subcategories can be found in FEMA, Public Assistance Guide, FEMA 322, 2007, at

http://www.fema.gov/public-assistance-policy-and-guidance.

44 C.F.R. §206.201(b).

42 U.S.C. §5170b. Emergency work is also authorized by Sections 418, 419, and 502(a) of the Stafford Act, 42

U.S.C. §§ 5185, 5186, and 5192(a), respectively.

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Grants (FMAGs). As subdivided by FEMA, it includes two categories of assistance, debris

removal and emergency protective measures, which are described below. As shown later in Table

5, CRS analysis of project data from FY2000 to FY2013 indicates that approximately 35% of all

PA projects were for emergency work. These emergency work projects accounted for 41%, or

$21.2 billion, of the total federal obligations for assistance in the PA Program during the time

period.

Debris Removal21

When a disaster strikes a community, it can produce a large volume of debris ranging from tree

limbs, destroyed cars, chemicals and other hazardous materials, building materials, etc. Debris

can have immediate impacts such as blocking emergency routes, and can also inhibit a

community’s overall recovery and prevent the safe return of residents to their homes if they were

evacuated. Managing the debris removal process is a fundamental challenge in responding to any

disaster, and is guided by a number of regulatory requirements.22

So long as it is in the public interest, FEMA provides grant assistance to communities for both the

actual removal of the debris and the management of the process writ large, as authorized by

Section 403(a)(3)(A) and Section 407 of the Stafford Act.23 This assistance, under Category A of

the PA Program, is available both for emergency and major disaster declarations.24 Working with

the applicant, FEMA will estimate the amount of debris following a disaster in order to provide

eligible grantees expedited payments of 50% of the initial estimate for full anticipated debris

removal costs.25 Eligible PNPs may receive assistance for the removal of debris on their eligible

facilities. FEMA has established extensive policy guidance specifically on debris removal

assistance, as the process for debris removal is relatively distinct from much of the rest of PA

Program assistance.26

The Sandy Recovery Improvement Act (SRIA) established a set of alternative procedures for

debris removal assistance provided by the Stafford Act.27 This new section of the Stafford Act

reauthorizes similar authorities to those granted by the PA Pilot Program established by the PostKatrina Emergency Management Reform Act (PKEMRA),28 and as have been recommended in

the past by the DHS Inspector General (IG).29 The alternative procedures are intended to

For more on how debris is managed after a disaster, see CRS Report RL34576, Managing Disaster Debris: Overview

of Regulatory Requirements, Agency Roles, and Selected Challenges, by (name redacted).

Ibid.

42 U.S.C. §§5170b(a)(3)(A) and 5173, respectively. See also Sections 403(a)(3)(A) and 502(a)(5) of the Stafford

Act.

42 U.S.C. §5192(a)(5), Section 502(a)(5) of the Stafford Act authorizes the provision of debris removal assistance in

accordance with Section 407 of the Stafford Act for emergency declarations.

42 U.S.C. §5173(e), Section 407(e) of the Stafford Act.

See FEMA, Public Assistance Debris Management Guide, FEMA-325, July 2007, at http://www.fema.gov/pdf/

government/grant/pa/demagde.pdf. See also FEMA, Public Assistance Debris Monitoring Guide, FEMA-327, October

2010, at https://www.fema.gov/pdf/government/grant/pa/fema_327_debris_monitoring.pdf.

Section 1102 of P.L. 113-2, 127 Stat. 41; as codified at 42 U.S.C. §5189f(e)(2), Section 428(e)(2) of the Stafford

Act.

Section 689j of Division B of P.L. 109-295, 120 Stat. 1455. For more on the PKEMRA PA Pilot program, see

FEMA, Public Assistance Pilot Program: Fiscal Year 2009 Report to Congress, May 20, 2009, at

http://www.fema.gov/library/viewRecord.do?id=3683.

See Department of Homeland Security, Office of Inspector General, FEMA’s Oversight and Management of Debris

(continued...)

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incentivize the faster completion of projects while saving local and federal monies. As

implemented currently by FEMA in pilot program guidance,30 the alternative procedures for

debris removal allow:

•

Use of a sliding scale for the federal share of debris removal based on the time it

takes to finish debris removal. FEMA is to provide a larger federal share of the

eligible cost the quicker an applicant removes the debris. For debris removed by

a subgrantee within 30 days of the disaster, the federal share is 85% (a 10%

increase from the minimum 75%); and within the next 60 days (i.e., days 30-90

post-disaster), 80% of the federal share.

•

Applicants to recycle debris and use the proceeds from such recycling without

reducing the awarded amount of grant assistance. FEMA has created several

eligible uses for the proceeds, including using it to meet the grantee cost share

requirement and to improve future debris removal operations.

•

Reimbursement of state, tribal, and local governments or owner/operators of

private nonprofits for the base and overtime wages of their own employees that

are performing or administering debris removal projects.

•

Provision of financial incentives for applicants with a FEMA-approved debris

removal plan and one or more prequalified debris removal contracts prior to a

disaster. FEMA is providing a one-time 2% cost share adjustment for a single

disaster declaration for all debris removal work completed within 90 days if the

applicants have a debris removal plan and at least one prequalified debris

removal contract in place.

Emergency Protective Measures

Emergency protective measures (Category B) is perhaps the broadest eligible form of assistance

in the PA Program, as it includes all activities that are “undertaken by a community before,

during, and following a disaster that are necessary to ... eliminate or reduce an immediate threat to

life, public health, or safety; or eliminate or reduce an immediate threat of significant damage to

improved public or private property through cost-effective measures.”31 Examples of eligible

activities include the establishment of temporary shelters and community service facilities,

critical power generation, demolition of unsafe buildings, operation of emergency

communications systems, and more.32 In addition to assistance that applicants, including PNPs,

may receive for the emergency protection of their own eligible facilities, applicants may also

receive grant assistance to provide emergency protective measures for the general public during

the preparedness for or response to a disaster, such as volunteer fire departments for search and

rescue operations. Regulations on emergency protective measures33 are expanded upon

(...continued)

Removal Operations, OIG-11-40, February 2011, http://www.oig.dhs.gov/assets/Mgmt/OIG_11-40_Feb11.pdf.

See FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Debris Removal, Version 2, June 27,

2014, https://www.fema.gov/media-library/assets/documents/33376?id=7776.

FEMA, Public Assistance Guide, June, 2007, p. 71, at http://www.fema.gov/pdf/government/grant/pa/paguide07.pdf.

Ibid., pp. 71-78.

Generally, 44 C.F.R. §206.225.

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considerably by numerous policy documents, ranging from policies on the eligibility of building

inspection costs to the eligibility of removing hazardous stumps.34

SRIA specified that the President may reimburse both the base and overtime pay and benefits of

permanent employees of state, tribal, and local governments for emergency protective measures.35

FEMA anticipates implementing this legislative change through the regulatory process, but has

not done so as of the date of publication of this report.36 Under past regulations and policy

directives, FEMA determined that, in general, only the overtime wages of permanent employees

working for the state and local governments were eligible for reimbursement (that is, not the base

pay and benefits or “straight time” of an employee).37 In contrast, FEMA had determined that the

full cost of contract labor for this work is eligible for reimbursement. This change made by SRIA

did not impact the treatment of wages for private nonprofits, and it continues to allow the

reimbursement of overtime and hazardous duty pay of all state and local permanent employees

conducting emergency protective measures, consistent with past FEMA policy.

FEMA implemented a novel use of emergency protective measures authority during the response

to Hurricane Sandy. Emblematic of the potentially flexible nature of the underlying statute,

FEMA designed the Sheltering and Temporary Essential Power (STEP) Pilot Program to restore

the basic habitability of individual residences, thereby allowing people to “shelter” in their own

homes as opposed to using other government-funded temporary facilities or receiving rental

assistance for hotels and hotel-like accommodations.38 However, consistent with other PA

assistance, the grant assistance provided by FEMA (a maximum of $10,000 per residence) was

not provided directly to individuals, but rather was provided to eligible PA applicants such as

local governments to reimburse them for the emergency protective measure work done on

residences. In other words, the grant was provided to local governments, who in turn used the

funding for essential repair to private residences (essentially passing through the assistance). In a

rapid response audit of the STEP Pilot Program, the DHS IG found that the program was

innovative but consistent with the authorities of the Stafford Act and “may substantially reduce

the overall long-term costs associated with sheltering and disaster housing.”39 However, the IG

also noted that by the very nature of it being a pilot program, the STEP Pilot Program was more

vulnerable to waste, fraud, and abuse.40 GAO reiterated these concerns, noting that FEMA did not

require sufficient collection of data on recipients of STEP assistance that would enable FEMA to

See 9500 policies at FEMA’s website at http://www.fema.gov/9500-series-policy-publications.

Section 1108(b) of SRIA (127 Stat. 47), as codified at 42 U.S.C. §5170b(d), Section 403(d) of the Stafford Act.

For updates on the status of implementing all SRIA changes, see FEMA’s website at https://www.fema.gov/sandyrecovery-improvement-act-2013.

See primarily 44 C.F.R. §206.228(a)(2) and FEMA, Labor Costs—Emergency Work, FEMA Recovery Policy

RP9525.7, November 16, 2006, at http://www.fema.gov/pdf/government/grant/pa/9525_7.pdf. An exception to this

standard is provided in 44 C.F.R. §206.202(f)(1)(ii), which allows for the reimbursement of the base salaries of a hoststate’s permanently employed staff who are supporting evacuations or shelters.

See FEMA, Sheltering and Temporary Essential Power (STEP) Pilot Program, November 16, 2012,

https://www.fema.gov/media-library/assets/documents/29829.

This potential benefit of the STEP Pilot Program has yet to be audited further, and cannot be readily confirmed. In

theory, by obligating assistance through the STEP Pilot Program, fewer people may have sought and received more

expensive assistance through the Transitional Shelter Assistance (TSA) Program (another eligible cost under Section

403 of the Stafford Act). See Department of Homeland Security, Office of Inspector General, FEMA’s Sheltering and

Temporary Essential Power Pilot Program, OIG-13-15, December 7, 2012, p. 3, at http://www.oig.dhs.gov/assets/

Mgmt/2013/OIG_13-15_Dec12.pdf.

Ibid.

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determine if these same recipients were receiving assistance through other FEMA programs in

violation of program guidance and restrictions on the duplication of benefits.41 GAO, reporting on

FEMA-provided data, found that as much as $418 million was spent through the STEP Pilot

Program in the aftermath of Hurricane Sandy.42 FEMA is conducting its own internal review of

the STEP Pilot.

Direct Federal Assistance

Given that a disaster can significantly exceed the management capabilities of communities, the

Stafford Act grants the President broad authority to

direct any Federal agency, with or without reimbursement, to utilize its authorities and the

resources granted to it under Federal law (including personnel, equipment, supplies, facilities, and

managerial, technical and advisory services) in support of State and local emergency assistance

efforts to save lives, protect property and public health and safety, and lessen or avert the threat of a

catastrophe, including precautionary evacuations.43

In addition, at the request of the governor or tribal chief executive, federal government agencies

may be tasked with providing emergency work assistance whenever states, tribes, and local

governments cannot provide the assistance themselves or through contract support. Collectively,

this type of assistance is generally referred to as direct federal assistance.44 Prior to providing this

assistance, FEMA requires grantees and applicants to agree to a number of conditions, including

that the federal government is indemnified from damages and any claims against the federal

government arising from the assistance provided.45

Permanent Work

In the section of the Stafford Act authorizing permanent work assistance, it states that the

President may provide financial assistance to grantees to help to restore eligible facilities

on the basis of the design of such facility as it existed immediately prior to the major disaster

and in conformity with current applicable codes, specifications, and standards (including

floodplain management and hazard mitigation criteria required by the President or by the

Coastal Barrier Resources Act (16 U.S.C. 3501 et seq.)) shall, at a minimum, be treated as

the net eligible cost of such repair, restoration, reconstruction, or replacement [italics

added].46

Therefore, eligible federal costs associated with restoring permanent facilities generally fall into

three groups:

•

Costs associated with restoring the facility to its predisaster design. In regulations

and implementing policy, FEMA has expanded the definition of predisaster

U.S. Government Accountability Office, FEMA Has Improved Disaster Aid Verification but Could Act to Further

Limit Improper Assistance, GAO-15-15, December 2014, pp. 32-34, at http://www.gao.gov/assets/670/667469.pdf.

Ibid., p. 12.

42 U.S.C. §§5170a(1) and 5192(a)(1), Sections 402(1) and 502(a)(1) of the Stafford Act, respectively.

44 C.F.R. §206.208.

44 C.F.R. §206.208(b)(1)(ii).

42 U.S.C. §5172(e), Section 406(e) of the Stafford Act.

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design to mean that the repaired/replaced facility should have the same function

and relative capacity of the previous facility.47

•

Costs associated with improvements made to the facility to bring it into

conformity with current codes, specifications, and standards. These codes and

standards must also be found to be “reasonable” by FEMA, be in effect at the

time of the disaster, and be applied uniformly across the community prior to the

disaster, among other requirements.48 Prior to 1999, FEMA considered eligible

the costs associated with repairing/replacing facilities to meet a new building

code, adopted after a disaster, so long as the project had not yet been approved by

FEMA. This allowed grantees to adopt new standards and have the cost of

meeting those standards shared by the PA Program. However, this policy was

reformed and restricted by regulation when FEMA reassessed its legal

interpretation of the statute.49

•

Costs associated with complying with the President’s floodplain and hazard

mitigation criteria or other federal laws, as explained later in the report.50

Permanent work assistance is only available in areas receiving a major disaster declaration, and is

not available to communities receiving emergency declarations or FMAGs. In order to receive

permanent work assistance, eligible grantees must also have a FEMA-approved state or tribal

mitigation plan in accordance with regulatory requirements. This restriction does not affect

receipt of emergency work assistance through the PA Program.51

The subcategories of permanent work (Categories C through G) refer to the types of facilities

eligible for restoration. For example, utilities (Category F) can include water treatment plants and

delivery systems; power generation and distribution facilities, including natural gas systems, wind

turbines, generators, substations, and power lines; sewage collection systems and treatment

plants; and communications.52 As shown later in Table 5, CRS analysis of project data from

Predisaster design is defined in regulations (44 C.F.R. §206.202(k)) as “the size or capacity of a facility as originally

designed and constructed or subsequently modified by changes or additions to the original design. It does not mean the

capacity at which the facility was being used at the time the major disaster occurred if different from the most recent

designed capacity.” See also FEMA, Public Assistance Guide, June, 2007, p. 79, at http://www.fema.gov/pdf/

government/grant/pa/paguide07.pdf.

See 44 C.F.R. §206.226(d). For more on the eligibility of improvements to meet codes and standards, see FEMA,

Public Assistance Guide, June, 2007, pp. 33-35, at http://www.fema.gov/pdf/government/grant/pa/paguide07.pdf.

FEMA believed there were unintended consequences of the pre-1999 policy, including “protracted delays in

repairing eligible projects as applicants debate the adoption of codes and standards that will affect eligible damaged

facilities and the amount of Federal assistance they will receive.” See the notice of public rulemaking for an

explanation at FEMA, “Disaster Assistance; Restoration of Damaged Facilities,” 61 Federal Register 55262, October

25, 1996; and the final rule at FEMA, “Disaster Assistance; Restoration of Damaged Facilities,” 63 Federal Register

5895, February 5, 1998.

See the section “Hazard Mitigation Assistance for Permanent Work” of this report.

Section 322 of the Stafford Act (42 U.S.C. §5165) encourages grantees to submit a mitigation plan in order to receive

additional amount of assistance through the hazard mitigation grant program (HMGP, Section 404 of the Stafford Act,

42 U.S.C. §5170c). In implementing regulations, 44 C.F.R. §201.4, FEMA has required that a grantee has an approved

“standard” hazard mitigation in order to receive permanent work assistance through the PA Program. To receive the

additional amount of HMGP assistance allowed by Section 322 of the Stafford Act, a grantee must have an approved

“enhanced” mitigation plan, per 44 C.F.R. §201.5. This regulation is explained further in FEMA, Restrictions on Grant

Obligations to State, Tribal and Local Governments Without a FEMA-Approved Mitigation Plan, FP 306-112-1,

August 19, 2013, at http://www.fema.gov/media-library/assets/documents/34437.

FEMA, Public Assistance Guide, June 2007, p. 85, at http://www.fema.gov/pdf/government/grant/pa/paguide07.pdf.

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FY2000-FY2013 indicates that approximately 65% of all PA projects were for permanent work.

This accounted for 59%, or $30.2 billion, of the total federal obligations for assistance in the PA

Program.

Hazard Mitigation Assistance for Permanent Work

Hazard mitigation, as defined in FEMA regulations, is “any cost effective measure which will

reduce the potential for damage to a facility from a disaster event.”53 Through its administration

of the PA Program, FEMA has issued regulations stipulating that Regional Administrators have

the authority to require certain hazard mitigation measures in addition to those required by local

building codes and standards. The “hazard mitigation criteria required by the President” allowed

by law is principally formulated by policy guidance issued by FEMA. This policy guidance

explains the conditions by which FEMA will approve assistance for hazard mitigation measures

(with examples provided).54 The criteria do not establish any fixed set of requirements on facility

design in the manner of a supplement to local or state building codes. FEMA’s criteria were

updated in 2010 to reflect an increased emphasis by Administrator Craig Fugate to “maximize

section 406 mitigation so as to reduce the risk of damage to the same facilities in future

disasters.”55 As shown later in Figure 6, FEMA-supplied data indicate that $3.7 billion has been

obligated for PA hazard mitigation assistance between FY2000-FY2013.

FEMA considers the authority to include hazard mitigation measures on projects to be

discretionary, meaning in essence that “only FEMA has the authority to determine which hazard

mitigation measures it will fund” and that “The Stafford Act and applicable regulations do not

authorize State or local building officials or agencies to determine the amount of hazard

mitigation funding FEMA will contribute to a project.”56 With this discretion, FEMA has

determined that additional hazard mitigation measures can only be applied to facilities that are

being repaired (not replaced in full) and only to areas of the building that are damaged by the

disaster.57

In addition to the hazard mitigation measures required and allowed under FEMA’s criteria, there

are other forms of assistance provided by the PA Program that may have the effect of mitigating

future disaster risks. First, there are those costs that are eligible to comply with federal floodplain

management standards, namely building code standards related to the National Flood Insurance

Program (NFIP) and Executive Order 11988, Floodplain Management, as most recently amended

by Executive Order 13690, Establishing a Federal Flood Risk Management Standard and a

Process for Further Soliciting and Considering Stakeholder Input.58 For example, all facilities in

44 C.F.R. §206.2(14).

FEMA, Hazard Mitigation Funding Under Section 406 (Stafford Act), 9526.1, March 30, 2010, at

http://www.fema.gov/hazard-mitigation-funding-under-section-406.

W. Craig Fugate, Section 406 Mitigation, FEMA, Memorandum to Regional Administrators, Acting Regional

Administrators, and Federal Coordinating Officers, July 10, 2009.

Ibid., Section VI.A.4, p. 3.

In the PA Guide, FEMA states that mitigation measures cannot be applied to replacement buildings because “new

construction will be to current codes and standards, which are intended to ensure structural integrity for local

conditions, mitigation funding applies only to building repairs, which generally are not covered by codes and

standards.” See FEMA, Public Assistance Guide, June, 2007, p. 125, at http://www.fema.gov/pdf/government/grant/pa/

paguide07.pdf.

Executive Order 11988, “Floodplain Management,” 42 Federal Register 26951, May 24, 1997, as amended;

Executive Order 13960, “Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting

(continued...)

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the special flood hazard area that are being replaced or substantially improved with federal

assistance must be elevated to or above the base flood elevation level.59 Second, there are those

costs associated with bringing the undamaged parts of a facility into compliance with applicable

codes and standards are generally referred to as “triggered costs” by FEMA. These triggered costs

are eligible costs under the PA Program, so long as they are found reasonable, and could be

considered as a hazard mitigation obligation through permanent work assistance as they may

assist in improving the facility’s design in a manner that will “reduce the potential for damage to

a facility.” Not all triggered costs may have this hazard mitigation benefit. For example, some

triggered costs may be associated with increasing the accessibility of facility, which, though a

potentially valuable improvement, may or may not reduce future risk.

Insurance Requirements for Permanent Work

Section 311 of the Stafford Act requires that applicants receiving assistance for permanent work

projects obtain and maintain insurance on the facility to the extent that insurance is “reasonably

available, adequate, and necessary to protect against future loss to such property,” as determined

by the President.60 This insurance requirement is implemented further through regulations and

FEMA policy guidance.61 In order to determine whether insurance is “reasonably available,”

FEMA is required to defer to the appropriate state insurance commissioner to certify the type and

extent of insurance that is reasonable for the facility and region.62 At a minimum, FEMA requires

that facility owners obtain and maintain insurance that provides coverage equal to the amount of

assistance being provided by the PA Program (i.e., equal to the cost of eligible damage to the

facility) for the hazard type responsible for the damage (e.g., earthquake insurance for damage

caused by earthquakes).63 Generally, a state insurance commissioner only becomes involved at

the request of the applicant in certifying what is “reasonable” other than the standard set by

FEMA. If facility owners fail to obtain and maintain insurance as required by FEMA, the facility

is ineligible for permanent work assistance in a future disaster of the same hazard type (this

restriction does not apply to emergency work assistance).64

In all circumstances, the dollar amount of PA grant assistance provided by FEMA is reduced by

the amount of eligible insurance coverage in force at the time of the disaster. This is required by

legal restrictions against the duplication of benefits, where an applicant cannot receive assistance

from the PA Program if an insurance policy will provide the same benefit.65 Therefore, in theory,

(...continued)

and Considering Stakeholder Input,” 80 Federal Register 6425, February 4, 2015; and 44 C.F.R. Part 9 (Floodplain

Management and Protection of Wetlands).

See, generally, conditions of 44 C.F.R. Part 60. It is beyond the scope of this report to discuss all of these

requirements.

42 U.S.C. §5154. This insurance requirement of the Stafford Act also applies to a grant assistance from the

Economic Development Administration issued as a result of a declared disaster, as codified at 42 U.S.C. §3149(c)(2).

See 44 C.F.R. Part 206, Subpart I (§§206.250-53). FEMA also has two fact sheets relating to the insurance

requirement, one for applicants and one for FEMA field personnel. See FEMA, Insurance Considerations for

Applicants, 9580.3, May 29, 2008, at https://www.fema.gov/pdf/government/grant/pa/9580_3.pdf; and FEMA,

Insurance Responsibilities for Field Personnel, 9580.2, June, 4, 2007, at https://www.fema.gov/pdf/government/grant/

pa/9580_2.pdf.

42 U.S.C. §5154(a)(2), Section 311(a)(2) of the Stafford Act.

See 44 C.F.R. §§206.252(d) and 206.253(b).

42 U.S.C. §5154(b), Section 311(b) of the Stafford Act.

For more on the duplication of benefits restriction, see 42 U.S.C. §5155, Section 312 of the Stafford Act; and 44

(continued...)

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proper implementation of the “obtain and maintain” insurance requirement reduces future PA

Program costs by increasing the financial risk transfer to the insurance market (either public or

private insurance). However, the DHS IG recently found past situations where this requirement

has not been implemented adequately by FEMA and grantees.66

The legal requirements related to insurance for facilities that are in an identified special flood

hazard area67 are further increased in Section 406(d) of the Stafford Act. For these facilities, the

dollar amount of permanent work assistance provided by the PA Program may be reduced by the

maximum amount of available flood insurance, regardless of whether the facility had previously

obtained that insurance. Generally, the amount of flood insurance available is limited to the

maximum coverage amounts of a policy through the National Flood Insurance Program (NFIP).68

Thus, owners of facilities in these special flood hazard areas are strongly incentivized to obtain

flood insurance pre-disaster, and essentially are penalized if they do not. Facility owners at risk of

other types of disasters are not similarly incentivized to obtain their respective forms of insurance

(e.g., facilities at risk of earthquake damage are not penalized for failing to carry earthquake

insurance if not previously required to do so because of a past disaster).

FEMA has proposed a revision to existing policies on the insurance requirement. Among other

changes, if implemented as proposed, the new policy would formally allow applicants (i.e., local

governments, PNPs, etc.), to retain some or all of their risk through a self-insurance plan at the

approval of FEMA, not just states.69 As of the date of this report, the new policy had yet to be

implemented, though FEMA had already solicited public comment on the policy.70

Administrative Cost Assistance

The Disaster Mitigation Act of 2000 (DMA 2000) revised the Stafford Act to direct the President

to establish regulations for providing grant assistance to cover the management expenses of

grantees and applicants.71 Since this directive, FEMA has had two distinct processes for providing

(...continued)

C.F.R. §206.191.

The DHS IG found that in addition to upwards of $177 million in assistance provided that could have been offset by

insurance proceeds, FEMA may have also inappropriately waived the “obtain and maintain” insurance requirement. In

the IG’s estimation, “as a result, FEMA potentially stands to lose up to a billion dollars in future Florida disasters

because many Florida communities may not have adequate insurance coverage for future disasters such as those that

occurred in 2004 and 2005.” See Department of Homeland Security, Office of Inspector General, FEMA Insurance

Reviews of Applicants Receiving Public Assistance Grant Funds for 2004 and 2005 Florida Hurricanes Were Not

Adequate, OIG-15-19-D, December 18, 2014, http://www.oig.dhs.gov/assets/GrantReports/2015/OIG_15-19D_Dec14.pdf.

As defined in regulations at 44 C.F.R. §206.250(e) and 44 C.F.R. §59.1. In general, this is the area at risk for

flooding by the “1 in 100 year” standard (1% standard), often referred to as the “base flood.”

The maximum amount of coverage for non-residential buildings under the NFIP is $500,000 for the building, and

$500,000 for contents. See FEMA, National Flood Insurance Program: Summary of Coverage for Commercial

Property, F-778, https://www.floodsmart.gov/floodsmart/pdfs/NFIP_Summary_of_Coverage.pdf.

See the proposed policy, Section VII, Part 1, C (p. 3) of FEMA, Public Assistance Policy on Insurance, Draft,

9530.1, at http://www.regulations.gov/#!documentDetail;D=FEMA-2014-0029-0002. States are currently legally

allowed to act as a self-insurer for their facilities, as prescribed at 42 U.S.C. 5154(c), Section 311(c) of the Stafford

Act.

See FEMA, “Public Assistance Policy on Insurance, RP9530.1,” 79 Federal Register 60861, October 8, 2014.

Section 202 of P.L. 106-390, 114 Stat. 1560, as codified at 42 U.S.C. §5165b. Prior to DMA 2000, grantees were

afforded some administrative expenses as codified at 42 U.S.C. §5172(f) (1988 edition), the former Section 406(f) of

(continued...)

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this assistance for both the PA Program and the Hazard Mitigation Grant Program. For disasters

declared before November 2007, grantees and applicants received a “sliding scale”

reimbursement model, whereby they were given an extra amount of grant assistance for

management costs based on a small percentage of the total assistance provided by FEMA.72

After November 2007 (essentially starting in FY2008), FEMA established a new procedure.73 The

costs for applicants and grantees are grouped into two categories:

•

Direct administrative costs (often referred to as DAC) are costs incurred by the

grantee or applicant that “can be identified separately and assigned to a specific

project.”74

•

Indirect, management costs that a grantee or applicant “reasonably incurs in

administering and managing the PA grant that are not directly chargeable to a

specific project.”75

Eligible direct administrative costs are provided by FEMA directly on the grant award for

activities such as travel expenses and preparing documentation related to the specific project. The

amount provided is based on the actual cost of these activities, or an estimate of their cost. GAO

recently audited the past and current process for providing assistance for these costs, and found

that the change made in 2007 may have had several unintended consequences, including

increasing the workload of grantees and applicants/subgrantees because of the complexity of

DAC procedures.76 In GAO’s recent analysis of FEMA data from FY2008 to FY2012, GAO

found that direct administrative costs totaled approximately $107 million, about 0.77% of the

total spending for the PA Program.77

Management costs (or indirect costs) are provided directly to the grantee (the state or tribal

government with the disaster declaration), not to the individual applicants in the communities.

For indirect management costs, FEMA has established that it will provided a maximum of 3.34%

of the federal share of projected eligible PA Program costs for major disaster declarations and

3.9% of the federal share of projected eligible program costs for emergency declarations.78

FEMA, through the Chief Financial Officer, works with the grantees to develop a “lock-in”

amount of management costs within 12 months of the declaration, and that amount cannot exceed

(...continued)

the Stafford Act.

See 44 C.F.R. §207.9 for a description of this process.

The new process was established by regulation, see the interim final rule at FEMA, “Management Costs,” 72 Federal

Costs,” 67 Federal Register 56130, August 30, 2002.

See 44 C.F.R. §207.2 for official definitions, and FEMA, Section 324 Management Costs and Direct Administrative

Costs, March 12, 2008, p. 2, at https://www.fema.gov/9500-series-policy-publications/95259-section-324-managementcosts-direct-administrative-costs.

Ibid.

In the same report, GAO audited both the administrative costs FEMA incurs to manage the federal government’s

support to communities in response to disasters, and the administrative costs reimbursed to grantees and applicants for

the PA Program. See U.S. Government Accountability Office, Federal Emergency Management Agency: Opportunities

Exist to Strengthen Oversight of Administrative Costs for Major Disasters, GAO-15-65, December 2014, pp. 24-36, at

http://www.gao.gov/products/GAO-15-65.

Ibid., p. 27.

44 C.F.R. §207.5(b)(4). The projected amount excludes direct federal assistance.

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$20 million unless specifically exempted by FEMA. The amount “locked-in” may be less than the

3.34% or 3.9% cap for major disaster and emergencies, respectively.79 FEMA has produced

guidance to applicants on examples of activities that should be classified as direct versus

management costs.80

Grantee Cost-Shares

There are no legal or regulatory limits on the amount of money that can be awarded through PA

grants for any one project, applicant, or disaster declaration. So long as the project is otherwise

eligible, FEMA will award funding (subject to sufficient funds being available in the Disaster

Relief Fund for the project).81 The PA Program has a minimum federal cost-share of 75%,

meaning that the maximum a grantee is responsible for is 25% of the total eligible amount of

grant assistance, for both emergency and permanent work.82 The President may decide to increase

this cost-share, often on the recommendation of FEMA under a regulatory assessment.83 The costshare can also be adjusted by separate laws specifying the cost-share for specific disaster

declarations.84 Under regulatory procedures, FEMA may recommend that the President increase

the federal share up to 90% of the eligible costs for emergency and permanent work if the

assessed damage from the disaster exceeds certain per capita damage thresholds. In addition,

FEMA may recommend that the federal cost-share be increased to 100% for emergency work for

a limited period of time after an incident, regardless of any per capita damage assessment.85

FEMA also has a specific policy for providing 100% cost-share on direct federal assistance.86

Cost-shares for individual disasters are established in the FEMA/state agreement which is

completed as early as possible following an incident (and amended thereafter).87 A full discussion

of cost-share adjustments for all Stafford Act assistance programs, including the PA Program, is

provided in a separate CRS report.88

In DMA 2000, the President was directed to establish regulations by which the federal cost-share

for permanent work assistance (restoring facilities) could be reduced for facilities damaged on

more than one occasion over a ten-year period by the same type of event (e.g., a flood, tornado, or

This process is explained by FEMA in FEMA, Section 324 Management Costs and Direct Administrative Costs,

March 12, 2008, at https://www.fema.gov/9500-series-policy-publications/95259-section-324-management-costsdirect-administrative-costs.

See FEMA, Section 324 Management Costs and Direct Administrative Costs, Public Assistance Program Indirect

and Direct Administrative Activity List, March 12, 2008, at http://www.fema.gov/pdf/government/grant/pa/

9525_9_pa_indirect_direct_administrative_activity_list.pdf/.

For more on the Disaster Relief Fund, see the “Appropriations for the Public Assistance Program” section of this

report and CRS Report R43537, FEMA’s Disaster Relief Fund: Overview and Selected Issues, by (name redacted).

This cost share is established in multiple sections of the Stafford Act under the authorities used by the PA Program,

see 42 U.S.C. §§5170b(b), 5172(b), 5173(d); Sections 403(b), 406(b), and 407(d) of the Stafford Act respectively.

44 C.F.R. §206.47.

For example, see Section 4501 of P.L. 110-28, 121 Stat. 156. This provision set the federal cost-share at 100% of all

eligible costs under the Stafford Act assistance programs for the States of Louisiana, Mississippi, Florida, Alabama and

Texas in connection with Hurricanes Katrina, Wilma, Dennis and Rita.

44 C.F.R. §206.47.

See FEMA, 100% Funding for Direct Federal Assistance and Grant Assistance, 9523.9, June 9, 2006, at

https://www.fema.gov/9500-series-policy-publications/100-funding-direct-federal-assistance-and-grant-assistance.

See 44 C.F.R. §206.44 for more on the FEMA/state agreement.

See CRS Report R41101, FEMA Disaster Cost-Shares: Evolution and Analysis, by (name redacted) .

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earthquake) and only if the owner of the facility had failed to properly mitigate the facility to

prevent repetitive damages.89 By law, the federal cost-share could be reduced to not less than 25%

(meaning the federal share would be a minimum of 25%, and the grantee share no more than

75%).90 FEMA proposed a regulation for this reduction in 2009, but the regulation has yet to be

finalized so the legal requirement is not in effect.91 In the proposed rulemaking, FEMA has

interpreted the language of the statute as meaning that the cost share would be reduced on the

third occasion that a facility is damaged by the same event within a ten-year window, not the

second.92 FEMA has suggested that their current means of tracking projects and applicants across

these multiple disasters and years does not allow the ready identification of these types of

facilities, thereby preventing easy implementation of the cost-share reduction requirement.93

There is no reliable estimate for how many facilities—if any at all—would ultimately have their

cost-share reduced because of this unenforced requirement.

Appeal Rights

The Stafford Act specifically provides a “right of appeal” to all grantees and applicants regarding

any decision on the “eligibility for, from, or amount of assistance under this title [the Stafford

Act].”94 The statute also establishes a timeline for the appeals process. Appeals must be filed

within 60 days of being notified of the decision in question, and the federal official responsible

for administering the appeal has 90 days to reach a decision after it is filed. This statute on an

appeals process applies for every Stafford Act assistance program, and the PA Program in

particular has expanded on it in regulations and administrative policies.95 The traditional PA

appeal process has two stages of appeal; the initial appeal goes to the FEMA Regional

Administrator where the disaster occurred and the second appeal goes to FEMA’s Assistant

Administrator for Recovery for a decision, which is final.96

SRIA established a new alternative dispute resolution (ADR) procedure for PA Program

assistance decisions related to a major disaster declaration.97 The history of this provision and

Section 205(b) of DMA 2000, 114 Stat. 1563, as codified at 42 U.S.C. §5172(b)(2), Section 406(b)(2) of the Stafford

Act.

Section 205 of P.L. 106-390, 114 Stat. 1563; as codified at 42 U.S.C. §5172(b)(2), Section 406(b)(2) of the Stafford

Act.

FEMA, “Disaster Assistance; Public Assistance Repetitive Damage,” 74 Federal Register 40124, August 11, 2009.

For an explanation, see Section II.C, 74 Federal Register 40126.

In-person meeting with FEMA staff, October 31, 2014. In the proposed rule, FEMA notes that it would need to

track the history of the provision of disaster assistance following Presidentially-declared major

disasters by applicant and facility through the use of its National Emergency Management

Information System (NEMIS)/Emergency Management Mission Integrated Environment (EMMIE)

computer program and database in which all PW’s are stored. FEMA would use the latitude and

longitude documented on the PW and entered into NEMIS/EMMIE for the damaged facility to

track repetitively damaged facilities. Tracking and recording this information in NEMIS/EMMIE

would assist FEMA in correctly and consistently interpreting the requirements in this proposed

rule, and if the Federal cost-share is reduced it would serve as essential documentation for resolving

appeals that may follow. (Section II.G, 74 Federal Register 40127).

42 U.S.C. §5189a(a), Section 423(a) of the Stafford Act.

See 44 C.F.R. §206.206 and FEMA, Public Assistance Program Appeal Procedures, Version 3, April 7, 2014, at

https://www.fema.gov/media-library/assets/documents/93610.

44 C.F.R. §206.206(b).

Section 1105 of SRIA, 127 Stat. 43-45. The ADR procedure applies to assistance provided by Sections 403, 406, and

(continued...)

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possible rationale are described in another CRS report.98 Since SRIA, FEMA has implemented the

ADR procedure in regulations, and created a new manual on the appeals process to explain the

procedure.99 FEMA also maintains a database of appeals online, and has created a new Public

Assistance Appeals Branch to centrally manage the appeals process.100

Methods for Awarding and Disbursing

Grant Funding

There are two general methods FEMA currently uses to determine the amount of, and award,

grant assistance for both emergency and permanent work under the PA Program. FEMA will

either award grants based on the estimated federal share of the total eligible cost for the project,

or it will award grants on the federal share of actual eligible costs evidenced through

documentation by the applicant/grantee. Succinctly, when a grant is provided by estimate, the

applicant receives the full amount of assistance at the time the project is approved. The actual

cost basis method reimburses the applicant for eligible expenses only as actual costs are

documented by the applicant. When and how these methods are applied is described briefly

below.

Estimated Cost Basis

Under current practice, FEMA issues grants based on the estimated federal share of eligible costs

for PA projects when:

•

The project is eligible for simplified procedures as authorized in Section 422 of

the Stafford Act (a “small project” in FEMA terminology);

•

An applicant has decided to receive an in-lieu contribution through Section

406(c) of the Stafford Act (an “alternate project” in FEMA terminology);

•

Certain projects that include significant improvements for the facility (an

“improved project” in FEMA terminology); or

•

An applicant chooses to use the alternative procedure for a permeant work, large

project grant to be based on a fixed estimate.

These types of PA projects are described in greater detail below.

(...continued)

407 of the Stafford Act.

For more background on the SRIA ADR requirement, see CRS Report R42991, Analysis of the Sandy Recovery

Improvement Act of 2013, by (name redacted), (name redacted), and (name redacted).

See 44 C.F.R. §206.210 and FEMA, Public Assistance Program Appeal Procedures, Version 3, April 7, 2014, at

https://www.fema.gov/media-library/assets/documents/93610.

100

For the appeals database, see https://www.fema.gov/appeals; for more on the appeals branch, see

https://www.fema.gov/public-assistance-appeals-branch.

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Simplified Procedure “Small” Projects

Section 422 of the Stafford Act allows applicants to request that FEMA provide PA grants based

on the federal share of the estimated total eligible cost of the project, as opposed to reimbursing

on eligible actual costs.101 The statute establishes a cap on the size of projects allowed to use this

method at $35,000, adjusted annually for inflation.102 For the period FY2000 through FY2013

this threshold ranged between $48,900 and $68,500.103 Providing this assistance via a federal

estimate, as opposed to actual cost, is deemed a simplified procedure, though projects under this

ceiling and using this method are often referred to by FEMA as small projects. The simplified

procedure can be applied for any category of work assistance in the PA Program. In general, the

simplified procedures are intended to reduce administrative expenses, for both FEMA and the

applicant, and to speed up the delivery of assistance to the affected communities.104

SRIA revised Section 422 to require the Administrator of FEMA to analyze and report whether it

would be appropriate to raise the estimated cost ceiling on small projects, based on a number of

considerations including how the threshold impacts “cost-effectiveness, speed of recovery,

capacity of grantees, past performance, and accountability measures.”105 FEMA produced a report

analyzing this issue on January 29, 2014, one year after enactment of SRIA and in fulfillment of

the legislative deadline.106 In addition to reviewing the size of the maximum estimated cost

threshold for simplified procedures, FEMA also reviewed its minimum estimated cost threshold

to receive grant assistance—currently set at $1,000.107 Through an analysis of past legislative

intent on the size of small projects and a benefit-cost analysis, among other factors, FEMA

recommended raising the eligibility for simplified Procedures to $120,000 for the maximum

estimated cost threshold and $3,000 for the minimum estimated cost threshold. Based on past data

from the PA Program, FEMA believes that the new small project thresholds will capture

approximately 93% of all PA projects, though only 20% of the total costs of assistance in the PA

Program.108 CRS analysis of project data from FY2000-FY2013 indicates that approximately 87%

of all PA projects were small projects, and 9% of the total federal obligations for assistance in the

PA Program. Therefore, the new thresholds may increase the number of small projects by roughly

6 percentage points, and the amount of assistance provided through simplified procedures by 11

101

42 U.S.C. §5189. Specifically, eligible costs under Section 403, 406, 407, or 502 of the Stafford Act.

This $35,000 figure was set in 1988 by Section 106(k) of P.L. 100-707, 102 Stat. 4705, and is adjusted annually

according to the Consumer Price Index for All Urban Customers.

103

FEMA, “Notice of Adjustment of Disaster Grant Amounts,” 64 Federal Register 215, November 8, 1999. FEMA,

“Notice of Adjustment of Disaster Grant Amounts,” 78 Federal Register 208, October 28, 2013. This example, from

FY2000, establishes the rate of $48,900. The notice states that “the increase is based on a rise in the Consumer Price

Index for All Urban Consumers of 2.3 percent for the prior 12-month period.”

104

For a description of the legislative intent behind the simplified procedures, see Section B, History of Simplified

Procedures Threshold, in FEMA, Determination on the Public Assistance Simplified Procedures Thresholds, Analysis

Report for Sandy Recovery Improvement Act of 2013, January 29, 2014, at https://www.fema.gov/media-library/

assets/documents/90458.

105

Section 1107 of SRIA (127 Stat. 46) as codified at 42 U.S.C. §5189(b)(1), Section 422(b)(1) of the Stafford Act

106

FEMA, Determination on the Public Assistance Simplified Procedures Thresholds, Analysis Report for Sandy

Recovery Improvement Act of 2013, January 29, 2014, at https://www.fema.gov/media-library/assets/documents/

90458.

107

A minimum threshold for project size is not a requirement of the Stafford Act, but is established in FEMA’s

implementing regulations, see 44 C.F.R. §206.202(d)(2).

108

See FEMA, Determination on the Public Assistance Simplified Procedures Thresholds, Analysis Report for Sandy

Recovery Improvement Act of 2013, January 29, 2014, p. 22, at https://www.fema.gov/media-library/assets/documents/

90458.

102

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percentage points.109 As required by law, following their analysis of the cost thresholds, FEMA

established the new floor for the minimum project amount and a ceiling for small project

eligibility by regulation. Thus, these new thresholds of $3,000 for a minimum project size, and

$120,000 for the simplified procedure maximum, are effective as of February 26, 2014.110 By law,

FEMA is also required to adjust the thresholds annually by the Consumer Price Index and to

review the thresholds no later than every three years.111

Validation Process for Small Project Estimates

As explained above, small projects are based on the federal estimate for the cost of the project.

However, applicants are encouraged to produce their own estimates on the cost of small projects

and provide them on project worksheets to FEMA for validation. This process is established in

FEMA policy, not law or regulation, and is designed to “confirm the eligibility, compliance,

accuracy and reasonableness of small projects formulated by an applicant.”112 FEMA will review

a 20% sample size of all small projects submitted by the applicant under a particular disaster

declaration, but will individually review any that have identified special considerations, such as

residing in the floodplain or historical preservation issues. FEMA does not have an established

process to review whether the estimated cost of small projects ultimately reflects the final cost for

completing the project.

In-Lieu “Alternate” Projects

The Stafford Act authorizes the President to provide certain applicants, at their request, an “inlieu” contribution based on the amount of estimated cost of the eligible damage for the eligible

facility. Under current law, this authority only applies to permanent work projects, and the in-lieu

contribution/grant can be used to repair or build an existing or new alternate facility. An applicant

may also use the in-lieu contribution to fund mitigation measures on another facility.113 Thus,

FEMA refers to grants using this authority as “alternate” projects (not to be confused with

alternative procedures).114 For example, if an elementary school was substantially destroyed after

a disaster, a local government may decide that instead of rebuilding that particular school (and

having FEMA reimburse them for the federal share of the eligible cost of doing so), the

community may be better served by using that money to build a new high school or to better

protect a nearby police station (perhaps because of shifting demographic needs in their

population). The decision by an applicant to receive an in-lieu contribution for a different project

109

See Table 5 of this report for more data.

See FEMA, “Amendment to the Public Assistance Program’s Simplified Procedures Project Thresholds,” 79

Federal Register 10685, February 26, 2014. FEMA has also sought public comment on the thresholds, see FEMA,

“Simplified Procedures Project Thresholds for the Public Assistance Program,” 79 Federal Register 688899, November

19, 2014.

111

Section 1107 of SRIA (127 Stat. 46) as codified at 42 U.S.C. §5189(b), Section 422(b) of the Stafford Act.

112

FEMA, Public Assistance Program, Validation of Small Projects, 9570.6 Standard Operating Procedure, September

1999, p. 3, at http://www.fema.gov/media-library-data/20130726-1847-25045-1794/

9570.6_validation_of_small_projects_sop.pdf.

113

42 U.S.C. §5172(c), Section 406(c) of the Stafford Act. Regulations for in-lieu contributions are found at 44 C.F.R.

§206.203(d)(2), and supplemental policy guidance at FEMA, Alternate Projects Disaster Assistance Policy, 9525.13,

August 22, 2008, at http://www.fema.gov/site-page/alternate-projects.

114

The “alternate project” name of in-lieu contributions projects can now be easily confused with alternative procedure

projects (not alternate), so CRS refers to them as in-lieu projects or in-lieu contributions.

110

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needs to be in the interest of the public welfare, as determined by the applicant, and the new

project should serve the “same general area that was being served by the originally funded

project.”115

In order to estimate the size of the in-lieu contribution, FEMA uses a cost-estimating process

called the Cost Estimating Format, or CEF, to estimate the eligible damages on the original

project. In other words, for in-lieu contributions, the CEF helps identify the amount of assistance

that would have been provided to the applicant had they elected to repair or replace the existing

facility. The CEF tool was initially developed following the 1994 Northridge Earthquake in

California, and was most recently revised in 2009.116 The CEF is not used to estimate the costs of

small projects described previously.

Once the original project cost is estimated using the CEF, FEMA is obligated by law to reduce the

amount of assistance contributed in-lieu to the applicant for the new project. For governmental

applicants, the reduction is 10% of the federal share of eligible costs for repairing the existing

facility (meaning FEMA provides 90% of the amount it would otherwise have provided), for

private nonprofit applicants, the reduction is 25% of the federal share (meaning FEMA provides

75% of the amount it otherwise would have provided).117 The reduction of the federal share of

assistance for public facility in-lieu projects was lowered from 25% of the eligible costs to the

current 10% by P.L. 109-347.118 FEMA applies the reduction to the federal share of the

estimated eligible cost of repairing the current facility, not the estimated costs of new project or

mitigation activities.119 This penalty on the in-lieu contribution can be considered a deterrent to

applicants from recovering facilities in innovative ways as opposed to rebuilding and repairing

the facility back to the way it was prior to the disaster.

Under the alternative procedures for the PA Program established by SRIA, the in-lieu

contributions for different projects are not reduced by 10% for public facilities or 25% for private

nonprofit facilities.120 In order to receive this benefit, FEMA requires that an applicant first accept

and negotiate a grant based on fixed estimate of cost (this process is described later in the

report).121

FEMA reported to CRS that the authority for in-lieu contributions is used very rarely by grantees

as a percent of the number of total permanent work projects (fluctuating year to year, ranging

115

Section VII.E of FEMA, Alternate Projects Disaster Assistance Policy, 9525.13, August 22, 2008, at

http://www.fema.gov/site-page/alternate-projects.

116

See FEMA, “Public Assistance Cost Estimating Format for Large Projects,” 78 Federal Register 61227, October 3,

2013. For more on how and when FEMA currently uses the CEF, see an explanation at FEMA, Public Assistance: Cost

Estimating Format Standard Operating Procedure, at http://www.fema.gov/public-assistance-cost-estimating-formatstandard-operating-procedure.

117

See 42 U.S.C. §5172(c)(1)(A) for public applicants, and (c)(2)(A) for private nonprofit applicants (§406(c)(1)(A)

and (2)(A) of the Stafford Act).

118

See Section 609 of Security and Accountability For Every Port Act of 2006 (SAFE Port Act, P.L. 109-347, 120 Stat.

1942).

119

Returning to the example of the school, this means FEMA provides 90% of what they estimated to be the total

eligible federal assistance for repairing the original damaged elementary school, not 90% of the new eligible costs of

building a different high school or mitigating future damages to the police station.

120

Section 1102 of SRIA (127 Stat. 40), as codified at 42 U.S.C. §5189f(d), Section 428(d) of the Stafford Act.

121

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Permanent Work, Version 2, December

19, 2013, p. 12, at https://www.fema.gov/media-library/assets/documents/89754.

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from 0.02% of permanent work projects in 2005 to 0.53% in 2008).122 FEMA also reports that

certain types of facilities eligible for permanent work assistance are more likely to receive in-lieu

contributions than others. For example, approximately 0.09% of roads and bridge projects

(Category C) used in-lieu contribution authority versus 0.33% of building projects (Category E)

from FY2000 to FY2014.123

Improved Projects

Improved projects for permanent work assistance allow the applicant to significantly alter the predisaster design of the facility when repairing or replacing an eligible facility.124 So long as the

facility serves the same intended purpose and function (e.g., it was a police station and remains a

police station afterwards), an improved project does not have a reduced federal cost share as is

required with an in-lieu contribution. However, FEMA only provides the federal share of

estimated eligible costs for repairing/replacing the facility as it was designed originally, not for

the additional “improvements” of the project. An improved project uses an estimated cost basis if

it is either a small project or the costs for the improvement cannot by distinguished from repairing

or replacing the facility to pre-existing design. If the improved project is estimated, the estimate

of the original project, minus improvements, is developed using the CEF. Thus, for example, if an

applicant wishes to significantly expand the capacity of a fire station by building it with three

truck bays instead of its original two bays, FEMA will not provide assistance for the additional

cost of the third bay.125 In this example, one assumes the costs for the third truck bay cannot be

isolated from repairing the original two bays.

Alternative Procedure Fixed-Estimate Grants

As part of the new SRIA alternative procedures for the PA Program, FEMA is directed to issue

grants to applicants for large, permanent work projects (facility repair and restoration) based on

estimates of the eligible cost. By law,126 SRIA required the estimation procedure to include

methods for:

•

Using a “fixed” estimate, meaning that after the estimate is agreed upon and set,

the estimate will not change due to changes in the project or other factors. As

implemented by FEMA, these estimated grants function much in the same way as

an in-lieu contribution does, as once the amount is agreed upon, the grants

“provide [applicants] with flexibility to repair or rebuild a facility as it deems

necessary for its operations with no requirement to rebuild to pre-disaster design,

capacity or function.”127

122

Email correspondence from FEMA staff, received January 7, 2015.

Ibid.

124

Improved projects are not specifically authorized in the text of the Stafford Act, but rather are approved through

FEMA’s interpretation of Section 406 authorities. In regulations, see 44 C.F.R. §206.203(d)(1), and supplemental

policy guidance at FEMA’s website at https://www.fema.gov/public-assistance-project-formulation-cost-estimating/

improved-project.

125

See FEMA, Public Assistance Guide, June 2007, p. 110, at http://www.fema.gov/pdf/government/grant/pa/

paguide07.pdf.

126

Section 1102 of SRIA (127 Stat. 40), as codified at 42 U.S.C. §5189f(e)(1), Section 428(e)(1) of the Stafford Act.

127

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Permanent Work, Version 2, December

19, 2013, p. 5, at https://www.fema.gov/media-library/assets/documents/89754.

123

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•

Accepting the estimates of professionally licensed engineers provided by the

applicant, so long as the estimate complies with FEMA regulations, policy, and

guidance. As implemented, FEMA uses the CEF whenever the applicant does not

provide an estimate. It also requires the applicant’s professional engineer to either

use “the CEF or a methodology and format consistent in the CEF’s level of

detail.”128

•

Using an independent expert panel, at the applicant’s request, to review and

validate the cost estimate where the estimated cost is over $5 million. As

implemented, FEMA has determined that it will pay for all expenses of the panel

and the reviews.129

SRIA also provided guidance on what happens if the estimated grant amount does not equal the

final actual cost of the applicant’s project.130 In other words, SRIA dictates what happens if the

grant approved by fixed estimate provides more or less assistance than was ultimately determined

to be eligible costs—often many years later. In instances where the amount provided by grant is

less than the actual cost of the project, the applicant will pay the overages. In instances where the

estimated grant amount is more than the actual project cost, FEMA will allow the applicant to use

the extra funds for PA hazard mitigation activities or other activities improving future PA

operations.131

Actual Cost Basis

FEMA’s policies state they currently use an actual cost basis for reimbursing grantees for large

projects (currently over the $120,000 threshold) that are either emergency or permanent work.132

As with in-lieu contributions, the CEF tool is used by FEMA for actual cost projects to help

anticipate the end expenditure for the project. This enables FEMA to anticipate future costs and

outlays for PA projects, and obligate in advance the expected cost of the project. Though funds

are obligated by FEMA at project approval, the funds are only incrementally disbursed as actual

costs are documented by the applicant.133 Therefore, FEMA provides the full assistance amount to

the applicant only after all eligible work on a PA project has been completed in its entirety. The

process for reimbursing by actual costs is governed by regulations,134 and allows for the scope of

the project to evolve as the project is commenced, so long as these changes are approved by

FEMA.135 Changes to the scope of work are generally not allowed when FEMA issues a grant

based on estimates of eligible costs.

128

Ibid., p. 7.

Ibid., p. 8.

130

Section 1102 of SRIA (127 Stat. 40), as codified at 42 U.S.C. §5189f(e)(1)(D), Section 428(e)(1)(D) of the Stafford

Act.

131

A list of unacceptable uses is also provided at FEMA, Public Assistance Alternative Procedures Pilot Program,

Guide for Permanent Work, Version 2, December 19, 2013, p. 12, at https://www.fema.gov/media-library/assets/

documents/89754.

132

For more on the large versus small project distinction, see the “Simplified Procedure “Small” Projects” section of

this report.

133

FEMA will, under some circumstances, provide advances on assistance funds (see 44 C.F.R. §13.21).

134

Namely, 44 C.F.R. §§13.21, 206.204, and 206.205(b).

135

See 44 C.F.R. §206.204(e).

129

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Possible DMA 2000 Grant Estimating Procedure

As described above, large, permanent work project grants are currently awarded on an actual cost

basis. Section 205(d) of DMA 2000 required the President to develop and implement a procedure

for awarding these grants based on the estimates of the eligible cost.136 The President was directed

to convene an expert panel on how costs should be estimated by FEMA, and to issue regulations

implementing these cost estimation procedures. Although the expert panel convened twice and

issued a report with recommendations for how the estimating procedure should be developed,137

final regulations implementing the statute have not been issued. However, in October 2013,

FEMA proposed a final rule to implement the grant estimating procedure required by DMA

2000.138 As shown later in Table 5, the impact on the PA Program of this proposed change in

procedure is significant. CRS analysis of project data from FY2000 to FY2013 indicates that

large, permanent work projects accounted for approximately 7% of all PA projects between

FY2000-FY2013, but 53%, or $27.2 billion, of total federal obligations for assistance.

If and when this regulation becomes final, the only remaining category of PA projects that would

be reimbursed on an actual cost basis is large, emergency work projects. CRS analysis of project

data from FY2000-FY2013 indicates that large, emergency work projects accounted for

approximately 6% of all PA projects, but 38%, or $19.6 billion, of total federal obligations for

assistance. In addition, any large, permanent work project that is more than 90% complete at the

time of estimation would still be reimbursed on an actual cost basis.139

See the text box on how the status of the statutory changes made by DMA 2000 only become

effective after these regulations are finalized.

Explanation of the Effective Status of Section 406(e) of the Stafford Act

DMA 2000 revised, among other provisions, the text of Section 406(e) of the Stafford Act (42 U.S.C. §5172(e)) to

require the creation of the large, permanent work grant estimation procedure. This change is not yet effective,

however, because FEMA has yet to finalize the rulemaking implementing the grant estimation procedure. Therefore,

the Section 406(e) statutory text that is effective is the same as it was before passage of DMA 2000, until such a point

that the proposed rulemaking is finalized and the DMA 2000 revision becomes effective. Lay observers can find this

change confusing, as Section 406(e) of the Stafford Act in the official version of U.S. Code (namely, as published by the

Government Publication Office) reflects the DMA 2000 revised language, not what is in effect until the

implementation of the rulemaking. The active, pre-DMA 2000 text, is provided in the annotated code as a note to

Section 406 and should be referenced as the “true” code until the proposed rulemaking is finalized.140

If and when the DMA 2000 grant estimation regulation is finalized by FEMA, the possibility

exists that there may be two different options available to applicants to receive grants based on

estimates for large, permanent work projects. There could be the new, DMA 2000 method, and

the alternative procedure method. The two options would only be available if FEMA were

136

P.L. 106-390, 114 Stat. 1564.

FEMA, Public Assistance: Expert Panel on Cost Estimating, Recommendation Report of Federal Advisory

Committee 10733, October 2002, at http://www.fema.gov/media-library-data/20130726-1836-25045-8450/cefrep.pdf.

138

FEMA, “Public Assistance Cost Estimating Format for Large Projects,” 78 Federal Register 61227, October 3,

2013.

139

FEMA believes that since a project is almost complete at 90% status, there is no need to estimate the remaining

portion of the project and it should just be reimbursed on an actual cost basis. See Section V. A. of FEMA, “Public

Assistance Cost Estimating Format for Large Projects,” 78 Federal Register 61238, October 3, 2013.

140

See p. 5534 of the Title 42 of the U.S. Code, 2013 edition.

137

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continuing the alternative procedures pilot, or had implemented the alternative procedure

permanently, after the DMA 2000 grant estimation rulemaking is finalized. Likewise, FEMA may

decide to incorporate some of the processes of the alternative procedures into the DMA 2000

grant estimation final regulation (or vice versa), eliminating some of the possible differences

between the two methods.141 Table 2 provides a summary comparison of the two methods as they

are currently designed.

Table 2. Summary Comparison of Large, Permanent Work Grant

Estimation Procedures

DMA 2000 Procedurea

SRIA Alternative Procedureb

Estimate is developed using

the...

Cost Estimating Format (CEF), as

approved by the expert panel established

to create the CEF.

CEF if produced by FEMA, or by using

the applicant’s estimate from a licensed

engineer that using the CEF or similar

estimating format.

If applicant and FEMA

disagree on estimate...

Applicant may appeal using standard PA

appeal procedures.

Applicant may request an independent

expert panel review and validate the

estimate amount only for eligible

projects over $5 million. If applicant is

unsatisfied by expert panel, it may elect

to use an actual cost basis for the grant.

For eligible projects estimated under $5

million, applicant may appeal using

standard PA appeal procedures.

If final actual costs differ

from estimate...

There are ceiling and floor thresholds of

10% for cost underruns and overruns. If

costs underrun (the actual cost of the

project is less than estimate) by less than

10%, the applicant may use extra funds for

hazard mitigation measures, similar to

those authorized by the Hazard Mitigation

Grant Program (Section 404 of the

Stafford Act). If the underrun is greater

than 10%, the applicant must reimburse

the federal share of the difference. If the

actual costs exceed the 10% thresholds,

applicant can receive additional funding,

or must repay funding, in the excess

amount of the federal cost share.

As a fixed estimate grant, any actual cost

overruns are borne by applicant. Actual

cost underruns are kept by the applicant

and may be used for PA Program-related

purposes such as hazard mitigation

activities or activities to improve future

PA permanent work operations.

Source: CRS analysis of PA Program documents cited in notations.

Notes:

For a full explanation of the proposed DMA 2000 procedure for grant estimation, see Federal Emergency

Management Agency, “Public Assistance Cost Estimating Format for Large Projects,” 78 Federal Register

61227, October 3, 2013.

For full explanation of the SRIA Alternative Procedure for grant estimation, see Federal Emergency

Management Agency, Public Assistance Alternative Procedures Pilot Program, Guide for Permanent Work, Version

2, December 19, 2013, at https://www.fema.gov/media-library/assets/documents/89754.

141

The statutes authorizing both the alternative procedure and the DMA 2000 grant estimation procedure contain

different base requirements. However, there is enough flexibility within the statutes that the President, via FEMA’s

administrative discretion, could develop similar methods for the DMA 2000 grant estimation procedure and the

alternative procedure for PA grants.

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Public Assistance Alternative Procedures Created by

the Sandy Recovery Improvement Act

The Sandy Recovery Improvement Act (SRIA) reformed numerous Stafford Act assistance

authorities, including the PA Program.142 The foremost change of SRIA to the PA Program was to

create a new section of the Stafford Act, Section 428, establishing “alternative procedures” for the

PA Program.143 Many of the changes made by SRIA were initially piloted under Section 689j of

P.L. 109-295, the Post-Katrina Emergency Management Reform Act of 2006 (PKEMRA).144

This section describes how FEMA chose to implement the SRIA alternative procedures and

discusses some of the decisions made in this implementation process that may be of interest to

Congress. The changes made by SRIA to the PA Program are discussed in detail in the prior

sections of this report and in a separate report by CRS.145

Pilot Program Guidance

In SRIA, Congress specifically granted FEMA the authority to carry out the alternative

procedures as a pilot program, and allowed FEMA to waive having to go through the normal

rulemaking process so that it could expeditiously implement the procedures.146 Consequently,

FEMA has established the Public Assistance Alternative Procedures (PAAP) Pilot Program, and

provided the policies it uses to administer the PAAP Pilot Program through a series of guides and

supplementary documents made available on its website.147 FEMA has generally split the PAAP

Pilot Program into those new rules it is applying for alternative procedures on debris removal

projects in emergency work (Category A projects) and large, permanent work projects (Categories

C-G).148 It is unclear when, or if, FEMA intends to revise regulations on the PA Program, namely

44 C.F.R §206, to formally adopt the alternative procedures pilot program. SRIA suggests, but

does not require, that FEMA ultimately adopt these policies in regulation.149

It is beyond the scope of this report to analyze the PAAP Pilot Program guidance provided by

FEMA in full. However, a few issues that may be of interest to Congress are discussed below.

142

Division B of P.L. 113-2, the Disaster Relief Appropriations Act, 2013

42 U.S.C. §5189f.

144

120 Stat. 1455. For more on the PKEMRA PA Pilot program, see FEMA, Public Assistance Pilot Program: Fiscal

Year 2009 Report to Congress, May 20, 2009, at http://www.fema.gov/library/viewRecord.do?id=3683.

145

See CRS Report R42991, Analysis of the Sandy Recovery Improvement Act of 2013, by (name redacted), (name redac

ted), and (name redacted).

146

Section 1102 of SRIA (127 Stat. 41), as codified at 42 U.S.C. §5189f(f), Section 428(f) of the Stafford Act.

147

See FEMA’s PAAP website for all supporting documentation, at https://www.fema.gov/alternative-procedures.

148

See the “Eligible Types of Assistance (Categories of Work)” section of this report for more on these categories.

SRIA also permanently amended Section 403 of the Stafford Act the eligibility of certain types of salaries and benefits

of local government employees for emergency protective measure grants (Category B). For a description of this

revision, see CRS Report R42991, Analysis of the Sandy Recovery Improvement Act of 2013, by (name redacted),

(name redacted), and (name redacted).

149

The law states that “Until such time as the Administrator promulgates regulations to implement this section.... ” The

law does not specify if the Administrator is required to issue regulations, and if so, when they are required to do so. See

Section 1102 of SRIA (127 Stat. 41), as codified at 42 U.S.C. §5189f(f), Section 428(f) of the Stafford Act.

143

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Fixed Estimate Grants for Debris Removal

FEMA is not yet issuing grants by fixed-estimate for debris removal emergency work projects, as

noted in PAAP guidance.150 This fixed-estimate procedure is being provided for large, permanent

work projects. Though SRIA requires the Administrator to provide such a method as a condition

of the alternative procedures,151 FEMA indicated to CRS that there is not currently an accurate

enough method available to estimate the amount of debris following a disaster, and therefore the

cost of removing the debris. FEMA also suggested that they have not received sufficient interest

from grantees or applicants in using this alternative procedure.152 However, FEMA does currently

use methods to estimate the amount of debris following a disaster in order to provide eligible

grantees expedited payments of 50% of the initial estimate for full anticipated debris removal

costs, as required by current law.153 Presumably, these estimation methods are considered

insufficient for the purposes of making grants based on fixed estimates. In addition, in a past pilot

program for debris removal procedures authorized by PKEMRA, FEMA did pilot a fixed grant

estimating procedure for debris removal projects under $500,000. However, FEMA indicated that

too few applicants used the grant estimating procedure to determine what impact, if any, it would

have had on the efficacy of the assistance.154

Selective Availability of Alternative Procedures for Applicants

SRIA did not directly specify how an applicant may choose to participate in the alternative

procedures, only that it was at their discretion.155 Generally, FEMA has determined that an

applicant may choose among some or all of the alternative procedures on a project-by-project

basis, with certain limitations.156 This approach is more flexible than other methods FEMA could

have used. FEMA could have, for example, decided that if an applicant wished to use alternative

procedures on one of their projects, the applicant would need to use the same procedure on all of

their projects, or decided that an applicant must use all features of the alternative procedures for a

project instead of just some of them. Not unexpectedly, early statistics provided to CRS by FEMA

on the usage of alternative procedures by December 2014 indicate that some alternative

procedures are considerably more popular with applicants than others (e.g., relatively few

150

See FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Debris Removal, Version 2, June

27, 2014, p. 4, https://www.fema.gov/media-library/assets/documents/33376?id=7776.

151

Section 1102 of SRIA (127 Stat. 41), as codified at 42 U.S.C. §5189f(e)(2)(A), Section 428(e)(2)(A of the Stafford

Act.

152

In-person meeting with FEMA staff, October 31, 2014.

153

42 U.S.C. §5173(e), Section 407(e) of the Stafford Act. For an explanation of these methods, see FEMA, Debris

Estimating Field Guide, FEMA 329, September, 2010, at http://www.fema.gov/pdf/government/grant/pa/

fema_329_debris_estimating.pdf

154

FEMA, Public Assistance Pilot Program: Fiscal Year 2009 Report to Congress, May 20, 2009, at

http://www.fema.gov/library/viewRecord.do?id=3683.

155

Section 1102 of SRIA (127 Stat. 40), as codified at 42 U.S.C. §5189f(d), Section 428(d) of the Stafford Act.

156

Limitations are explained in the PAAP Pilot Program guides. See both

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Debris Removal, Version 2, June 27, 2014,

at https://www.fema.gov/media-library/assets/documents/33376?id=7776; and

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Permanent, Version 2, December 19, 2013,

at https://www.fema.gov/media-library/assets/documents/89754.

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

applicants are recycling debris while many more are using the sliding scale for accelerated debris

removal).157

Applicability of Alternative Procedures to Past Disasters

SRIA explicitly provided that FEMA may approve alternative procedures for PA projects for

disasters declared after date of enactment, and that it may apply alternative procedures for PA

projects “for which construction ha[d] not yet begun on the date of enactment.”158 In its PAAP

Pilot Program guidance for permanent work projects, FEMA makes available alternative

procedures for any major disaster declared on or after May 20, 2013, and states it may also

approve subgrants before then if construction has not begun.159 FEMA does not specify further

how one defines when construction begins (e.g., before or after any demolition occurs, before or

after the metaphoric first shovel of dirt, etc.). However, FEMA has approved alternative

procedures for permanent work projects in Louisiana for major disaster declarations issued for

Hurricanes Katrina and Gustav (in August 2005 and September 2008, respectively).160 More

recently, many more projects have been approved or are under review with alternative procedures

stemming from Hurricane Sandy, especially in New York, all of which pre-date the start of the

pilot on May 20, 2013.

In its PAAP Pilot Program guidance for emergency work debris removal projects, FEMA has

established a pilot “performance period” for disaster declarations between June 28, 2013, and

June 27, 2015, when the pilot would end.161 Notably, this period does not include disaster

declarations for Hurricane Sandy (made around the end of October, 2012), and began

approximately six months following enactment of SRIA.162 FEMA states that it will conduct an

analysis of the effectiveness of the alternative procedures after the end of the pilot and determine

whether to discontinue the pilot, extend it, or issue regulations making it more permanent.163 The

157

Email correspondence from FEMA staff, received January 7, 2015. Early statistics from FEMA indicate that 11

applicants have used the recycling debris alternative procedure, and by comparison 436 have used the sliding scale

accelerated debris removal procedure.

158

Date of enactment was January 29, 2013. Section 1102 of SRIA (127 Stat. 42), as codified at 42 U.S.C. §5189f(a),

Section 428(a) of the Stafford Act.

159

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Permanent, Version 2, December 19,

2013, p. 2, at https://www.fema.gov/media-library/assets/documents/89754.

160

Disaster declarations 1603 and 1786, respectively. Early statistics provided by email from FEMA staff, received

January 7, 2015.

161

However, between June 28, 2013, and June 27, 2014, of this period, only large projects for debris removal were

eligible for alternative procedures beyond reimbursement of straight-time labor costs. After June 27, 2014, all debris

removal alternative procedures except for fixed grant estimates are available to both small and large projects. See

FEMA, Public Assistance Alternative Procedures Pilot Program, Guide for Debris Removal, Version 2, June 27, 2014,

p. 2, at https://www.fema.gov/media-library/assets/documents/33376?id=7776.

162

However, in an immediate final rule issued on November 9, 2012, FEMA implemented a policy for reimbursing

state, tribal, and local governments or owner/operators of private nonprofits for the base and overtime wages of

employees that are performing or administering debris removal projects. This rule implemented a similar policy as is

found in the alternative procedures, but only for disasters related to Hurricane Sandy. See Department of Homeland

Security, “Debris Removal: Eligibility of Force Account Labor Straight-Time Costs under the Public Assistance

Program for Hurricane Sandy,” 77 Federal Register 67285, November 9, 2012.

163

Ibid. It is unclear from current guidance what the “end” of the program period means for project eligibility for

alternative procedures. For instance, one interpretation could be that debris removal projects for all disasters declared

before that date are eligible, or that all debris removal projects approved before that date, or other interpretations.

FEMA is currently addressing how it will implement the performance period, and whether there will be an immediate

(continued...)

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PAAP Pilot Program guidance for permanent work does not contain an explicit end date for the

pilot.

Summary Analysis of Obligations for the Public

Assistance Program

The following section provides analysis of PA Program spending for major disasters in the period

FY2000 through FY2013. FY2014, and early data from FY2015, were excluded from this

analysis because these more recent data are subject to considerable modification as the recovery

from major disasters advances and more PA projects are approved or have their obligations

revised. This could also affect actual obligation levels for early fiscal years to a lesser degree. The

data for this analysis were derived from FEMA datasets, including publicly available data that can

be accessed through the OpenFEMA website.164 Additional information on these data, as well as

important considerations regarding their reliability, is available in Appendix B.

Appropriations for the Public Assistance Program

The PA Program is financed from the Disaster Relief Fund (DRF), which typically receives noyear appropriations and is the primary funding source for Stafford Act disaster assistance

authorities.165 Appropriations to the DRF do not separately identify funding amounts for the

varied programs authorized by the Stafford Act, thus the PA Program has not historically received

a distinct appropriation. Appropriations to the DRF as a whole, from FY2000 through FY2013,

are shown in Table 3.

Table 3. Appropriations to the Disaster Relief Fund, FY2000 through FY2013

Enacted Annual Appropriations and Supplemental Appropriations

Fiscal Year

Annual Appropriation

Supplemental

Appropriation

Total Appropriation

2000

$2,780

2001

$1,600

$2,000

$3,600

2002

$2,164

$7,008

$9,172

2003

$800

$1,426

$2,226

2004

$1,789

$2,500

$4,289

2005

$2,042

$43,091

$45,133

(...continued)

extension.

164

As stated by FEMA, “the OpenFEMA initiative provides approved mission relevant data for stakeholders to leverage

in value-added ways such as research, analysis, app development, and other purposes.” Information can be accessed at

https://www.fema.gov/openfema.

165

The funds for no-year accounts are available until expended—any remaining funds at the end of the fiscal year are

carried over to the next fiscal year. One benefit of a no-year account is that the unobligated balance in the account can

be used to pay for future disasters the next fiscal year. For more on the DRF, see CRS Report R43537, FEMA’s

Disaster Relief Fund: Overview and Selected Issues, by (name redacted).

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Fiscal Year

Annual Appropriation

Supplemental

Appropriation

Total Appropriation

2006

$1,770

$6,000

$7,770

2007

$,1487

$4,256

$5,743

2008

$1,324

$10,960

$12,284

2009

$1,278

2010

$1,600

$5,100

$6,700

2011

$2,645

2012

$7,100

$6,400

$13,500

2013

$7,007

$11,485

$18,492

Total

$35,386

$100,226

$135,612

Source: CRS analysis of appropriations statutes, as reported in CRS Report R43537, FEMA’s Disaster Relief Fund:

Overview and Selected Issues.

Notes: Does not include rescissions or transfers unless they have been incorporated in appropriations acts. The

Budget Control Act of 2011 (BCA) created an allowable adjustment specifically to cover disaster relief (defined

as the costs of major disasters under the Stafford Act), separate from emergency appropriations. Under the

BCA, which was in place for both FY2012 and FY2013 in the table above, the President’s budget request and

enacted appropriation levels were higher than in prior years. A discussion of this change can be found in CRS

Report R42352, An Examination of Federal Disaster Relief Under the Budget Control Act, by (name redacted), (name re

dacted), and (name redacted).

Aggregate Spending on Public Assistance

The PA Program has consistently been the largest source of federal obligations from the DRF.166

For the period FY2000 through FY2013, more than 90% of all major disaster declarations made

through the Stafford Act included provision of assistance through the PA Program. In addition,

obligations for PA grants accounted for 47% of total DRF obligations for major disaster

declarations. As shown in Figure 1, this is the largest activity funded from the DRF during that

time.

166

Analysis of DRF obligations was conducted using obligation data provided by FEMA. These figures do not include

projected future obligations.

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Figure 1. Share of DRF Funding by Activity

FY2000-FY2013

Source: CRS analysis of DRF obligation data for major disaster declarations provided by FEMA.

Notes: FEMA data groups obligations for Technical Assistance Contracts (TAC) with obligations for the PA

Program under the broad category of “Infrastructure.” As a result, other analysis of DRF obligations, including

previous research done by Government Accountability Office, will group these obligations together.

During this time period, the percent of overall DRF obligations attributable to PA grants ranged

from a low of 36% in FY2005 to a high of 66% in FY2013. Figure 2 displays both total federal

obligations for PA grants during this period, as well as the percentage of all DRF obligations

spent on these grants. Federal obligations for PA grants for major disaster declarations ranged

between $0.37 billion and $17.1 billion per fiscal year, for an average annual obligation of $3.9

billion.167 This obligation total does not include the funding provided by state and local

governments as part of their cost-share requirement. For most of the declarations during this

period, the federal government funded 75% of PA costs; however, for certain declarations the

cost-share was increased through either FEMA’s administrative discretion or through statute.168

During this period, FY2005 had the largest amount of PA obligations in a single FY. This is

largely the result of Hurricane Katrina, which accounted for more than $14.8 billion in PA grants

for Louisiana and Mississippi alone. In addition, current figures for FY2013 are projected to

increase as additional projects are processed for disaster declarations, especially for the

declarations for Hurricane Sandy. While major incidents like Hurricanes Katrina or Sandy can

lead to PA obligations in the billions, the average amount of assistance provided per major

disaster declaration for PA grants is roughly $69.8 million. For more than half of the major

disasters declarations in this time period, the federal obligation for PA grants was less than $10

million.

167

Total obligations over time have not been adjusted for inflation.

For more on cost-share adjustments, see CRS Report R41101, FEMA Disaster Cost-Shares: Evolution and Analysis,

by (name redacted).

168

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Figure 2. Public Assistance Federal Obligations, FY2000-FY2013

Source: Obligation totals and percentages are derived from CRS analysis of DRF obligation data for major

disaster declarations provided by FEMA that is not publically available. Total federal obligations for recent years

are likely to increase as outstanding work is processed.

Notes: Figure only includes federal obligations for public assistance as a result of a major disaster declaration.

Many of the Category Z (grantee management cost) obligations for a major disaster declared following the

September 11, 2001, terrorist attacks for New York State (DR-1391), included expenses that would not

normally be considered grantee management or would not normally fall within the PA Program. For the analysis

above, these expenses, totaling more than $2.3 billion, have been removed.

Public Assistance Spending by Type of Work, Category, and

Project Size

Individual project worksheets for the PA Program are made publically available by FEMA, with

data beginning in FY1998.169 These worksheets provide information related to both the total

project amount, which is an estimate developed early in the process, and the amount that was

ultimately obligated from the DRF. In addition, these worksheets identify the category of the

projects (e.g., Category A: Debris Removal) and whether the project is classified as large or

small, which has implications for administering the grant. Due to the data entry process used by

FEMA and the increasingly prevalent practice of grouping many projects on one worksheet, each

worksheet in this dataset does not necessarily equate to a discrete project in a lay sense of the

word. Nonetheless, these data can be used to measure obligations within the program along key

variables of interest.

Total spending in the PA Program for major disaster declarations can be divided into three broad

groups: emergency work, permanent work, and grantee management costs. For the period

FY2000-FY2013, permanent work accounted for more than 57% of all federal obligations for the

PA Program. Emergency work was 40% of the total and grantee management costs were 2%.

Figure 3 displays these three groups, as well as the subcategories identified by FEMA.

169

Data on project worksheets are available at https://www.fema.gov/data-feeds/openfema-dataset-public-assistancefunded-projects-details-v1. For more on the project worksheet data, see Appendix B of this report.

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Figure 3. Type of Work and Category as a Percent of Total Public Assistance Federal

Obligations, FY2000-FY2013

(Emergency work categories are shaded beige, permanent work categories are shaded blue, and grantee

administrative costs [state management] are shaded purple)

Source: CRS analysis of project worksheet data made available by FEMA at https://www.fema.gov/data-feeds/

openfema-dataset-public-assistance-funded-projects-details-v1. See Appendix B for a description of this data

and its limitations.

Notes: Figure only includes federal obligations for PA grants as a result of a major disaster declaration. Many of

the Category Z (grantee management) obligations for a major disaster declared following the September 11,

2001, terrorist attacks for New York State (DR-1391), included expenses that would not normally be

considered grantee management or would not normally fall within the PA Program. For the analysis above, these

expenses, totaling more than $2.3 billion, have been removed.

Federal obligations for permanent work have varied greatly over time. In FY2005, obligations for

subcategories C through G exceeded $11 billion, while for 10 of the 14 fiscal years during this

period obligations were below $2 billion each year. Within this group, obligations for public

buildings were the largest. In FY2005, FY2008, and FY2013, obligations for public buildings

(Category E) alone were in excess of $1 billion each year. Obligations for emergency work were

closely divided between debris removal (Category A) and emergency protective measures

(Category B). Category A accounted for $9.8 billion between FY2000 and FY2013, while

Category B accounted for 11.3 billion. The annual federal obligation for permanent work and

emergency work projects is presented in Figure 4. The data in this figure are derived entirely

from the publically available project worksheet data and have not been adjusted for inflation.

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

Figure 4. Federal Obligations for Permanent Work and Emergency Work,

FY2000-FY2013

Source: CRS analysis of project worksheet data made available by FEMA at https://www.fema.gov/data-feeds/

openfema-dataset-public-assistance-funded-projects-details-v1. See Appendix B for a description of this data

and its limitations.

Notes: Figure only includes federal obligations for PA grants as a result of a major disaster declaration.

As discussed previously, PA Program obligations vary considerably from one declaration to the

next. Many of the most well-known disasters, such as Hurricanes Katrina and Sandy, have federal

PA Program obligations in the billions of dollars. Conversely, more than half of all major

declarations had obligations less than $10 million per disaster. Table 4 below demonstrates this

difference for each category of work. In this table, all declarations have been divided into

quartiles based upon the total amount of PA Program obligations for emergency and permanent

work (costs for grantee management were excluded). As the table shows, there is a significant

decline in obligation amounts for every category between the most costly disasters and the next

quartile. Therefore, the largest 25% of disasters account for 91.3% of the federal obligations for

the PA Program.

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Table 4. Average PA Obligations per Major Disaster by Quartile, FY2000-FY2013

(Quartiles based on total amount of federal PA obligations for emergency and permanent work)

Most Costly 25%

A: Debris Removal

51%-75%

26%-50%

Least Costly

25%

$47,201,208

$2,535,039

$734,209

$299,331

B: Emergency Protective

Measures

$53,158,214

$2,754,282

$ 947,290

$352,796

All Emergency Work

$100,359,422

$5,289,322

$1,681,499

$652,127

$21,823,603

$4,379,988

$2,260,662

$774,601

$5,642,148

$804,533

$371,664

$139,514

$64,931,742

$886,323

$329,085

$182,149

$40,915,373

$2,214,755

$1,173,534

$542,977

$11,040,792

$966,289

$419,526

$108,366

All Permanent Work

$144,353,659

$9,251,888

$4,554,471

$1,747,607

Total

$244,713,080

$14,541,210

$6,235,970

$2,399,734

91.3%

5.4%

2.3%

0.9%

C: Roads and Bridges

D: Water Control Facilities

E: Buildings and Equipment

F: Utilities

G: Parks, Recreational

Facilities, and Other Items

Percent of Total

Source: CRS analysis of project worksheet data made available by FEMA at https://www.fema.gov/data-feeds/

openfema-dataset-public-assistance-funded-projects-details-v1. See Appendix B for a description of these data

and its limitations.

Notes: Quartiles were developed using total obligations in categories A through G. Each quartile has 196 or 197

major disaster declarations, for a total of 786 major disaster declarations.

Figure 5 displays the distribution of obligations between large and small project worksheets

across the PA Program. Within the PA Program, the vast majority of federal obligations are for

large projects, which are currently those projects above $120,000.170 For the period FY2000

through FY2013 the small project threshold ranged between $48,900 and $68,500.171 During this

time, more than 91% of all federal obligations for PA projects were for large projects. Within each

category, small projects accounted for no more than 10% of all federal PA obligations, with the

170

Department of Homeland Security, FEMA, “Amendment to the Public Assistance Program’s Simplified Procedures

Project Thresholds,” 79 Federal Register 38, February 26, 2014. The current threshold of $120,000 was determined by

FEMA following an analysis required by §1107 of P.L. 113-2, The Sandy Recovery and Improvement Act of 2013.

171

FEMA, “Notice of Adjustment of Disaster Grant Amounts,” 64 Federal Register 215, November 8, 1999. FEMA,

“Notice of Adjustment of Disaster Grant Amounts,” 78 Federal Register 208, October 28, 2013.This example, from

FY2000, establishes the rate of $48,900. The notice states that “the increase is based on a rise in the Consumer Price

Index for All Urban Consumers of 2.3 percent for the prior 12-month period.”

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FEMA’s Public Assistance Grant Program: Background and Considerations for Congress

exception of Category C. For this category, which includes repairs to non-federally owned roads

and bridges, 34% of all federal obligations were for small projects.

Figure 5. Small Projects by PA Work Category, as a Percentage of Total PA

Obligations, FY2000-FY2013

Source: CRS analysis of project worksheet data made available by FEMA at https://www.fema.gov/data-feeds/

openfema-dataset-public-assistance-funded-projects-details-v1. See the Appendix B for a description of this

data and its limitations.

Notes: Figure only includes obligations for PA grants as a result of a major disaster declaration. Category Z was

excluded because management cost assistance is not subject to small or large project distinctions.

While federal obligations for the PA Program are primarily for large projects, small projects

account for a much higher number of individual project worksheets. The FEMA dataset includes

more than 450,000 individual project worksheets for small projects from FY2000 to FY2013. As

shown in Table 5, small projects account for 87% of the total number of project worksheets.

Further, there are more individual projects for permanent work then for emergency work during

this period.

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Table 5. Number of PA Projects and Federal Obligations by Size and Type of Work

Emergency

Work

Permanent

Work

Total

Number of Project

Worksheets

Small Projects

Large Projects

151,209 (29% of total project

worksheets)

31,829 (6%)

Total

183,038 (35%)

$1.6 billion (3% of total

obligations)

$19.6 billion (38%)

Number of Project

Worksheets

303,533 (58%)

38,973 (7%)

Obligations

$3.0 billion (6%)

$27.2 billion (53%)

$30.2 billion (59%)

Number of Project

Worksheets

454,742 (87%)

70,802 (13%)

525,544 (100%)

Obligations

$4.6 billion (9%)

$46.8 billion (91%)

$51.4 billion (100%)

Obligations

$21.2 billion (41%)

342,506 (65%)

Source: CRS analysis of project worksheet data made available by FEMA at https://www.fema.gov/data-feeds/

openfema-dataset-public-assistance-funded-projects-details-v1. See Appendix B for a description of this data

and its limitations.

Notes: Both the percentages for the number of project worksheets and percentages of the obligations total

across rows (types of work) and columns (size of project). Obligations for grantee management costs are not

included. Table only includes federal obligations for PA grants as a result of a major disaster declaration. Project

worksheets have been excluded from this analysis if the total federal obligation was between -$1 and $1. Based

on conversations with FEMA, it is likely that these entries were for data entry purposes and did not indicate new

projects. For a discussion of other potential issues in counting project worksheets, see Appendix B.

Obligations for Private Nonprofit Facilities

As discussed previously, many different types of private nonprofit (PNP) facilities are eligible for

assistance within the PA Program.172 For the period FY2000-FY2013, $6.6 billion was obligated

by FEMA to PNPs, with the highest spending in FY2005 ($2.0 billion) and FY2013 ($1.4

billion). During this time, more than 77% of all PA obligations for PNPs were for public buildings

and public utilities (Categories E and F).

More than 8,400 different PNPs received PA grant assistance between FY2000 and FY2013.173

Many of the largest individual projects for PNPs involved universities, hospitals, and electrical

cooperatives. For example, Midwest Energy, Inc. received close to $60 million in federal PA

Program funding following severe winter storms in Kansas in 2007 and the Memorial Hermann

hospital system in Texas received more than $100 million following Tropical Storm Allison in

2001. In addition, many volunteer fire departments receive federal grants under the PA Program

to carry out emergency protective measures (Category B) after an incident. These grants are often

less than $10,000. Overall, the average obligation per PNP, per disaster, was $566,000. Many

applicants received grant assistance under multiple declarations during this period and many of

the PNPs received assistance for more than one project worksheet within a disaster declaration.

172

173

For more information, see the “Eligible Applicants” section of this report.

Number of PNPs in the dataset is based on a count of discrete applicant IDs developed by FEMA.

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Obligations for Hazard Mitigation within the PA Program

Section 406(e) of the Stafford Act provides FEMA with the discretionary authority to fund hazard

mitigation activities on permanent work projects as part of the PA Program.174 For every year

between FY2000 and FY2012, the amount of mitigation funding provided with this authority was

less than $300 million, often much lower. However, spending increased greatly in FY2013 as the

result of two major disaster declarations following Hurricane Sandy: DR-4085 (New York) and

DR-4086 (New Jersey). These two disasters alone account for more than $2 billion in PA

mitigation expenses. The vast majority of this funding was used for public building and public

utility projects (Categories E and F, respectively). Excluding the Hurricane Sandy declarations for

New York and New Jersey, federal obligations for PA mitigation assistance between FY2000 and

FY2013 was $1.7 billion. Figure 6 below displays total PA mitigation expenses over time, with

the two largest declarations for Hurricane Sandy in light blue.

Figure 6. Hazard Mitigation Obligations in the PA Program, FY2000-FY2013

($ millions; lighter green in FY2013 represents obligations for DR-4085 and DR-4086, which were

declared for NY and NJ, respectively, following Hurricane Sandy)

Source: CRS analysis of data provided by FEMA on hazard mitigation obligations for the PA Program.

Notes: Figure only includes obligations for PA grants as a result of a major disaster declaration. Analysis of

hazard mitigation spending by project category is skewed by large obligations for projects following Hurricane

Sandy.

For projects that included funding for PA mitigation, these expenses accounted for nearly 38% of

the total costs of the PA project on average. However, this figure was largely driven by PA

mitigation expenses in New York and New Jersey following Hurricane Sandy. For these projects,

PA mitigation expenses accounted for approximately 50% of total project cost. When these two

declarations are excluded, the overall project cost attributable to PA mitigation falls to 29% of the

total. Due to limitations with the data provided, the above analysis does not include

174

For more information, see the “Hazard Mitigation Assistance for Permanent Work” section of this report.

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•

costs associated with bringing facilities into compliance with existing standards;

•

“triggered” costs bringing undamaged portions of the facility into compliance

with standards; or

•

costs associated with complying with floodplain management standards.

Inclusion of these costs may increase the amount of general hazard mitigation assistance provided

by the PA Program considerably if accounted for in other analysis.

Considerations for Congress

There are numerous policy issues that Congress may consider when evaluating the PA Program.

The following sections of this report discuss select issues that may arise in congressional

oversight of the PA Program.

Balancing the Level of Statutory Versus Executive Branch Guidance

for the PA Program

The provisions of the Stafford Act that grant the PA Program’s authorities are, in many respects,

broadly worded statutes that allow the President, and FEMA as the delegated agency, to define

the conditions of disaster assistance. It is reasonable for FEMA to develop complex policies and

procedures for implementing the program when the law is silent on key definitions (such as what

constitutes a repair or replacement project) or has left it to the administration’s discretion when to

provide assistance (such as when debris removal assistance can be provided on private

properties). For more on these examples of how FEMA has interpreted Stafford Act provisions

through regulation and policy, see the Text Box.

That Congress has granted this responsibility is not unique to the Stafford Act or FEMA, but such

administrative discretion to implement the statute has resulted in policies and regulations that

were revised or reversed by Congress. Most recently, for example, Congress enacted in SRIA a

change to the treatment of eligible labor costs for emergency protective measures, revising

previous policies established by FEMA.175 Also in SRIA, Congress directed that FEMA review,

update, and revise its regulations in totality for when FEMA recommends to the President that

assistance is provided to individuals and households through Section 408 authority of the Stafford

Act.176 Congress has also passed laws, such as P.L. 109-308, the Pets Evacuation and

Transportation Standards Act (PETS Act) of 2006, that further specified the scope of Stafford Act

authorities when FEMA’s existing interpretation of its authorities limited the possibility of

providing that assistance.177

175

Section 1108(b) of SRIA (127 Stat. 47), as codified at 42 U.S.C. §5170b(d), Section 403(d) of the Stafford Act.

Section 1109 of SRIA (127 Stat. 47). The law directed the revision of 44 C.F.R. §206.48.

177

P.L. 109-308, the Pets Evacuation and Transportation Standards Act (PETS Act) of 2006, among other changes,

added clause (J) to 42 U.S.C. §§5170b(a)(3), Section 403 of the Stafford Act, thereby making it explicit that provision

of rescue, care, and shelter to individuals with pets and service animals should be considered an emergency protective

measure.

176

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Examples of FEMA Interpretations of Stafford Act Authorities

Debris Removal on Private Property in the public interest:

In Section 403 of the Stafford Act, the President is authorized to provide debris removal assistance on private

property when it is “essential to saving lives and protecting and preserving property or public health and safety” and

in Section 407 when it is in the broader “public interest.”178 In implementing the statute, FEMA has therefore defined

when debris removal is in the public interest. By regulation, it is in the public interest if it meets the conditions of

Section 403 of the Stafford Act (eliminating threats to life, health, safety, and significant damage to public and private

property) as well as if it “ensures economic recovery of the affected community to the benefit of the community-atlarge.”179

As further developed in policy, FEMA relies on determinations made by the relevant state, county, public health, or

municipal government officials to decide if the debris is necessary to be removed in the public interest, though FEMA

must receive and approve each request in writing. As a general policy, FEMA does not approve debris removal from

commercial properties, such as cemeteries, industrial parks, and apartment complexes.180

50% Rule for Repairing Versus Replacing Facilities:

Permanent work assistance under the Stafford Act is for the “repair, restoration, reconstruction, or replacement” of

damaged facilities, but the law does not explain when a facility should be repaired or replaced.181 In regulations, FEMA

stipulates that a facility is “repairable” when damages do not “exceed 50 percent of the cost of replacing a facility to

its predisaster condition” and is replaceable if it exceeds that threshold.182 This is generally called the 50% rule. In

policy, FEMA has elaborated by developing a full equation for the 50% rule, with eligible costs that may be included in

the numerator of the 50% fraction but not in the denominator of the fraction, and vice versa.183 As highlighted by the

DHS IG, the 50% rule “can be very difficult [to apply] and [is] susceptible to error, misinterpretation, and

manipulation” and now “represent[s] a ratio that has little to do with whether it will cost the taxpayer more or less

to replace rather than repair the facility.” 184 Thus, DHS IG has questioned the complexity of this formula and

whether FEMA has properly implemented it in past disasters, and the IG recommended its revision.185

Consistent with past precedents, Congress may review current FEMA policies and procedures for

the PA Program, and, when desired, override the policies through further clarification in law or

submit formal legislative recommendations on policies in committee or conference report

language. Likewise, Congress may also decide to codify existing policies without revising them,

thereby assuring that they cannot be changed without legislative action.

Evaluating Key Prospective Changes to the PA Program

The PA Program is constantly evolving through revisions to administrative policies for the

program. These policy documents, generally referred to as the 9500 Policy Series by FEMA,

supplement interpretations of the Stafford Act made in PA Program regulations.186 As established

178

42 U.S.C. §§5170b(a)(3)(A) and 5173(a), respectively.

44 C.F.R. §206.224(a).

180

See FEMA, Debris Removal from Private Property, 9523.13, July 18, 2007, at http://www.fema.gov/pdf/

government/grant/pa/9523_13.pdf.

181

42 U.S.C. §5172(a)(1)(A), Section 406(a)(1)(A) of the Stafford Act.

182

44 C.F.R. §206.226(f)(1).

183

See FEMA, Repair vs. Replacement of a Facility under 44 CFR §206.226(f) (The 50 Percent Rule), 9524.4, March,

25, 2009, at http://www.fema.gov/pdf/government/grant/pa/9524_4.pdf.

184

For a summary, see Department of Homeland Security, Office of Inspector General, FEMA’s Progress in Clarifying

its “50 Percent Rule” for the Public Assistance Grant Program, OIG-14-123-D, August 7, 2014, pp.3-4, at

http://www.oig.dhs.gov/assets/Mgmt/2014/OIG_14-123-D_Jul14.pdf.

185

Ibid.

186

Generally, 44 C.F.R. Subparts H, I, and G. The 9500 Policy Series is found on FEMA’s website at

(continued...)

179

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by Section 325 of the Stafford Act, these policies are required to be shared for public comment.187

In practice, FEMA provides the policies on their website and posts a notice in the Federal

policy, that clarifies its regulations.188 FEMA will also solicit feedback through outreach

mechanisms such as weekly external affairs newsletters and through various emergency

management associations. FEMA’s review of these policies does not always include certain

characteristics, such as cost-benefit analysis and paperwork reduction reviews, that is common for

federal agencies, as outlined in the Administrative Procedure Act (APA).189

Within FEMA’s existing policy revision process, Congress may wish to comment on and evaluate

the proposed policy changes, hold oversight hearings and briefings on the changes, or provide

input directly through other communications. Congress may also consider changing the policy

revision process itself, possibly by amending Section 325 of the Stafford Act, to (among other

options):

•

Create a formal reporting requirement to Congress prior to the finalization of PA

policies, possibly to include requirements for explanatory briefings regarding the

nature and intent of the planned policy;

•

Revise the existing requirements in law to expand the types of interim policies

FEMA is required to seek consultation from stakeholders;190

•

Establish conditions for whether a policy should undergo a more extensive APA

or APA-like procedure.

Conversely, Congress may determine the existing PA Program policy revision process is

unnecessarily cumbersome and inhibits rapid and necessary changes to the administrative

practices of FEMA. If so, Congress may consider eliminating some or all of the existing

requirements.

In addition to the generally constant evolution of FEMA PA Program policies described above,

there are two major potential changes currently underway for the PA Program. These are

discussed below.

(...continued)

http://www.fema.gov/9500-series-policy-publications.

187

42 U.S.C. §5165c.

188

For example, see a recent notice on a change to the insurance requirement at FEMA, “Public Assistance Policy on

Insurance, RP9530.1,” 79 Federal Register 60861, October 8, 2014.

189

For more on the Administrative Procedure Act process (5 U.S.C. §551 et seq.), see CRS Report RL32240, The

Federal Rulemaking Process: An Overview, coordinated by (name redacted).

190

See existing conditions at 42 U.S.C. §5165c(b)(1)), Section 325(b)(1) of the Stafford Act. FEMA is currently

required to consult on any interim policy that is likely to “(A) to result in a significant reduction of assistance to

applicants for the assistance with respect to the major disaster or emergency; or (B) to change the terms of a written

agreement to which the Federal Government is a party concerning the declaration of the major disaster or emergency.”

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SRIA Alternative Procedures Pilot Program

SRIA reformed the PA Program primarily through the creation a new section of the Stafford Act

establishing alternative procedures for the PA Program.191 As described earlier in this report,

FEMA created the Public Assistance Alternative Procedures (PAAP) Pilot Program to implement

these alternative procedures.192 As described in law, the purpose of the PA alternative procedures

is to:

(1) reduc[e] the costs to the Federal Government of providing such assistance;

(2) increas[e] flexibility in the administration of such assistance;

(3) expedit[e] the provision of such assistance to a State, tribal or local government, or owner

or operator of a private nonprofit facility; and

(4) provid[e] financial incentives and disincentives for a State, tribal or local government, or

owner or operator of a private nonprofit facility for the timely and cost-effective completion

of projects with such assistance reducing federal costs for providing assistance.193

SRIA also requires the DHS IG to assess the effectiveness of the alternative procedures for

permanent work projects.194 Of note, the IG’s report is not specifically required to assess the

portion of the alternative procedures for debris removal assistance, though the IG retains the

standing authority to review and audit these grants.195 By law, among other elements, the IG’s

report is required to contain assessments of whether the alternative procedures:

•

Increased the speed of disaster recovery for the community;

•

Used estimates that were accurate (presumably to mean accurate to actual costs);

and

•

Should be continued, with any recommendations for changes to them in future

legislation.196

The report is to be issued three to five years following enactment of SRIA (so between January

2016 and January 2018) and is to be provided to the committees of jurisdiction for the Stafford

Act (the Committee on Transportation and Infrastructure in the House, and the Committee on

Homeland Security and Governmental Affairs in the Senate).

191

Section 1102 of SRIA (127 Stat. 39), as codified at 42 U.S.C. §5189f, Section 428 of the Stafford Act.

See the “Public Assistance Alternative Procedures Created by the Sandy Recovery Improvement Act” section of this

report for more.

193

Section 1102 of SRIA (127 Stat. 40), as codified at 42 U.S.C. §5189f(c), Section 428(c) of the Stafford Act.

194

Section 1102 of SRIA (127 Stat. 42), as codified at 42 U.S.C. §5189f(h), Section 428(h) of the Stafford Act. The

alternative procedures are discussed throughout this report, but for a summary, see FEMA’s website at

https://www.fema.gov/alternative-procedures.

195

For example, the DHS IG conducted a review of debris removal assistance holistically in the past, see Department

of Homeland Security, Office of Inspector General, FEMA’s Oversight and Management of Debris Removal

Operations, OIG-11-40, February 2011, http://www.oig.dhs.gov/assets/Mgmt/OIG_11-40_Feb11.pdf.

196

Section 1102 of SRIA (127 Stat. 42), as codified at 42 U.S.C. §5189f(h)(2), Section 428(h)(2) of the Stafford Act.

192

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In a committee report requirement accompanying the Department of Homeland Security

Appropriations Act, 2015 (P.L. 114-4), Congress has also directed FEMA to produce quarterly

reports on implementation of the PAAP Pilot Program, especially for permanent work.197 These

quarterly reports are instructed to include FEMA’s assessment of “challenges and

recommendations, including proposed authority modifications” to help the Pilot Program achieve

its legislative objectives.198 In addition, the quarterly reports are to contain, among other items, a

financial summary of all permanent work projects in the PAAP Pilot Program and descriptions of

projects over $50 million.

The issuances of the IG’s report and FEMA’s quarterly reports on the PAAP Pilot Program may

provide Congress with direction on how it could further revise the Stafford Act to improve the PA

Program. Prior to or after the issuances of these reports, congressional oversight of the

implementation of the alternative procedures may focus on a number of factors, including

whether

•

The PAAP Pilot Program has accomplished the four goals of the procedures as

intended in law;

•

The Pilot Program guidance produced by FEMA has properly construed the

policy intentions of Congress in the enacting legislation, or any new intentions of

the current Congress;

•

Communities are receiving enough information and assistance from FEMA to

participate fully in the Pilot Program, and if the participation period for the Pilot

is long enough; and

•

Both the federal government and applicants have similar initial opinions on the

benefits/costs of the alternative procedures. For example, parties may disagree on

the quality of fixed-estimates for large, permanent work grants, or the

effectiveness of incentives for increasing the speed of debris removal.

Grants Based on Estimates for Large, Permanent Work Projects

FEMA is in the process of finalizing a rulemaking that would require grants based on estimates

for large, permanent work projects, in fulfillment of a legal requirement of DMA 2000.199 The

DMA 2000 grant estimation procedures were originally developed and approved by an expert

panel in 2002. Conservatively, if FEMA had adopted a final rule by October 2006 implementing

the estimating procedure, a full four years after the expert panel released its final

recommendations (and six since passage of the law), the President would have been required to

submit a review of the estimating procedures and the CEF in October 2008, and the expert panel

197

See U.S. Congress, House Committee on Appropriations, Department of Homeland Security Appropriations Bill,

2015, To accompany H.R. 4903, 113th Cong., 2nd sess., June 19, 2014, H.Rept. 113-481, p. 106. Appropriations

conference reports and explanatory statements typically refer to the committee reports of their antecedent bills as a

source of further direction to the funded agencies, in cases where that direction is not contradicted by the enacted bill,

or its conference report or explanatory statement. See Rep. Harold Rogers, “Explanatory Statement Submitted by Mr.

Rogers of Kentucky, Chairman of the House Committee on Appropriations, Regarding H.R. 240,” Congressional

Record, daily edition, vol. 161 (Tuesday, January 13, 2015), p. H275.

198

Ibid.

199

Section 205(d) of P.L. 106-390, 114 Stat. 1564. See the “Possible DMA 2000 Grant Estimating Procedure” section

of this report for more information on this requirement.

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would have submitted a review of the “appropriateness” of the cost estimating procedures in

October 2007, 2009, 2011, and 2013.200 In short, had the rule been implemented in a timelier

manner, the DMA 2000 grant estimation procedures may have evolved through the legally

required reviews in ways that are currently unaccounted for by FEMA. FEMA notes this possible

issue in their proposed rulemaking, stating that they “contacted individual panel members to revalidate the 10 percent threshold recommendation” but did not “request that the Panel validate

any other portion of its recommendation, as the other portions of the recommendation are not

meaningfully effected [sic] by the time that has elapsed.”201 However, given the length of time

since the passage of the initial DMA 2000 legal requirement and the expert panel’s

recommendations, Congress may consider whether to request or require the President to reengage

with the expert panel before finalizing the CEF rulemaking.

In addition, Congress may broadly consider whether it still agrees with the development of the

DMA 2000 grant estimation procedure. Since passage of DMA 2000, Congress enacted SRIA

which also established alternative procedures for the issuance of fixed-estimate grants for large,

permanent work projects. Table 2 highlights the some of the major differences between the SRIA

alternative procedure methods and the DMA 2000 methods. Congress may consider if some of

the differences applied in law for SRIA’s grant estimating alternative procedures should apply to

the DMA 2000 grant estimating procedures, and vice versa, and whether either estimation method

remains necessary to be authorized in the presence of the other. For example, Congress may

evaluate whether large, permanent work grants should be issued as fixed estimates, as with the

alternative procedure, or with a floor and ceiling threshold, as with the DMA 2000 procedure.

As a reminder, the DMA 2000 procedure is not currently active or available to applicants, and

would not be available until after FEMA implements a final rulemaking. Thus, if Congress wishes

to do so, Congress could prevent, delay, reform, or endorse the implementation of the DMA 2000

grant estimating procedure before it is implemented.

Improper Payments, Fraud, Waste, and Abuse in PA Program

As with any grant program, the PA Program is at risk for making improper payments, and

experiencing fraud, waste, and abuse. The DHS IG has a dedicated component office called the

Office of Emergency Management Oversight (EMO) that frequently produces, among other

products, audits with recommendations for recouping improperly provided funds for the PA

Program. The IG’s audits also make recommendations for improving PA Program management,

and generally help ensure funds are appropriately provided and spent.202 These audits are

summarized annually in “capping reports” on the PA Program and HMGP assistance.203 The IG

reported to CRS that for FY2009 to FY2013 they questioned the expenditure of over $1.9 billion

in PA assistance, and recommended that over $387 million of these funds be put to better use.

200

These review requirements are required by statute, see 42 U.S.C. §5172(e)(3)(D) and (E); Section 406(e)(3)(D) and

(E).

201

See Section V.C.1 of FEMA, “Public Assistance Cost Estimating Format for Large Projects,” 78 Federal Register

61239, October 3, 2013.

202

For more on this office, see EMO’s website at http://www.oig.dhs.gov/index.php?option=com_content&view=

article&id=38&Itemid=12

203

See, for example, Department of Homeland Security, Office of Inspector General, Capping Report: FY 2013 FEMA

Public Assistance and Hazard Mitigation Grant and Subgrant Audits, OIG-14-102-D, June 2014, at

http://www.oig.dhs.gov/assets/GrantReports/2014/OIG_14-102-D_Jun14.pdf.

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However, of those amounts, FEMA recovered only 13% of questioned costs (about $245 million),

and 64% of the funds that could be put to better use (about $249 million).204

FEMA has recently established a new “Recovery Audits Unit” within its Recovery Directorate

(the element responsible for managing the PA Program) that may improve future performance.

This new unit was established as a result of an internal FEMA review of all IG and GAO audits

issued between 2011 and 2014. According to FEMA’s internal review, “an overwhelming

majority of the audits and recommendations applied to the PA Program. Of the 202 audits

analyzed, 188 (93.1%) applied to PA, and 659 recommendations out of 680 (96.9%) also applied

to PA.”205 In addition, DHS IG has recently begun conducting more “proactive” audits of the PA

Program by deploying in the initial phase of a disaster to prevent misuse of funds.206 This

approach has already resulted in several published audits that help applicants by giving them “the

opportunity to correct noncompliance with Federal regulations before they spend the majority of

their funding.”207 Congress may evaluate both FEMA’s new Recovery Audits Unit and DHS IG’s

more proactive approach to determine if these changes will have an appreciable effect on the

management of the PA Program. In addition to other recommendations produced by the IG, GAO,

and other entities, Congress may also consider the following issues for improving PA Program

assistance.

Management Cost Assistance

As discussed previously, the Stafford Act authorizes assistance to help pay for expenses a grantee

“reasonably incurs in administering and managing the PA grant that are not directly chargeable to

a specific project.”208 The amount of assistance provided is set by FEMA regulations and policies.

Under policy guidance, FEMA has not “established any mini

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