Repeat audit findings: How FEMA responds to feedback

Abstract

Given climate change, expansive hardscapes and high housing density across the United States, and with the increasing frequency and ferociousness of natural disasters of all sorts, the damages and costs associated with human lives, land, and property will continue to grow. In this environment, state and local governments have heavy reliance on federal assistance to repair and rebuild communities following such crises, specifically via the Public Assistance (PA) grant program. The U.S. Federal Emergency Management Agency (FEMA) administers this grant through a process of application and approval managed by ten regional offices. Increased claims to FEMA have strained these regional offices leading to their failure to incorporate audit feedback and review policies for the purpose of continuous improvement. In these disastrous times, FEMA's operational improvement is vital to the continued support of communities across the nation. The Agency has objectives to promote effective recovery, streamline funding to reduce costs, and conduct the PA program efficiently to realize better return on investment.This research measures this problem by examining the U.S. Office of Inspector General's (OIG) audit findings of FEMA regional offices to see if and how these audits are being utilized and incorporated. Results show that over time, these offices are conducting the due diligence related to feedback; however, they are not incorporating details of audits in a meaningful way. Though total errors do not result in significant change in how FEMA apportions funding among regional offices over time, the type of error (either overspending or underspending) does influence such change. Therefore, consistent errors continue in financial response to disasters to which the Agency responds, indicating future FEMA decisions and OIG recommendations should require shifting the focus from repeat audit findings to financial prudence.