Disaster Recovery: Additional Actions Would Improve Data Quality and Timeliness of FEMA's Public Assistance Appeals Processing

In both 2016 and 2017, 15 separate U.S. disasters resulted in losses exceeding $1 billion each. FEMA provides PA grants to state and local governments to help communities recover from such disasters. If applicants disagree with FEMA's decision on their PA grant application, they have two chances to appeal: a first-level appeal to be decided by the relevant FEMA regional office and, if denied, a second-level appeal to be decided within FEMA's Recovery Directorate. Each is subject to a 90-day statutory processing timeframe.

GAO was asked to review FEMA's appeals process. This report examines: (1) the extent to which FEMA ensures the quality of its appeals data and what these data show about PA appeals inventory and timeliness; (2) what steps FEMA has taken to improve its management of the appeals process and what challenges, if any, remain; and (3) the extent to which FEMA developed goals and measures to assess program performance. GAO analyzed FEMA policies, procedures, and data on appeals and interviewed officials from headquarters and from regional offices with the highest number of pending appeals. GAO also spoke to state officials from the two states within each of the three regions with the highest number of pending appeals.

Weaknesses in the quality of Federal Emergency Management Agency's (FEMA) Public Assistance (PA) appeals data limit its ability to oversee the appeals process. For example, FEMA's data are inaccurate and incomplete because regional offices do not consistently track first-level appeals and FEMA does not have processes to ensure data quality. When GAO discussed these weaknesses with FEMA officials, they acknowledged them and provided GAO with corrected data for January 2014 through July 2017. GAO's analyses of the corrected data show fluctuations in the appeal inventory from year to year depending on the number of disasters declared and delays in processing. For example, as shown in the figure, only 9 percent of first-level and 11 percent of second-level appeals were processed within the 90-day statutory timeframe.

FEMA has taken steps to improve its management of the appeals process—including issues that GAO and the Department of Homeland Security's Office of Inspector General identified in 2008 and 2011. For example, FEMA increased its appeal staffing levels and developed standard operating procedures. Despite these efforts, FEMA continued to face a number of workforce challenges that contributed to processing delays, such as staff vacancies, staff turnover, and delays in training. FEMA has not developed a workforce staffing plan to identify hiring, training, and retention needs across its headquarters and regional offices, though FEMA officials acknowledge the potential benefits of having such a plan and stated that they are focused on filling vacancies. In the absence of a workforce plan, FEMA will continue to experience workforce challenges that could further contribute to delays in processing appeals.

FEMA has not established goals and measures for assessing first-level appeals processing performance, but has done so for second-level appeals. FEMA views establishing these first-level goals and measures as the responsibility of its regional offices. Without goals and measures, FEMA is limited in its ability to assess the efficiency and effectiveness of its overall appeals process and identify and address weaknesses that may lead to delays in making appeal decisions.

GAO is making four recommendations, including that FEMA implement a consistent approach for tracking appeals and ensuring data quality, develop a workforce plan, and develop measurable goals for processing first-level appeals. FEMA concurred with all four recommendations.

In both 2016 and 2017, 15 separate U.S. disasters resulted in losses  exceeding $1 billion each, and 2017 has tied the record pace for  frequency of billion-dollar disasters occurring in the calendar year. For the  communities that have been affected by these disasters, critical aspects  of response and recovery, such as removing debris, and rebuilding the  infrastructure of state and local schools, roads, and utilities, may take  years. The damage from such disasters points to the strains on state and  local resources in both response and recovery, especially in the event of  back-to-back catastrophic disasters, such as those witnessed during the  2017 hurricane season.

Each year, the federal government obligates billions of dollars through  programs and activities that provide assistance to state, local, territorial,  and tribal governments; individuals; and certain nonprofit organizations  that have suffered injury or damages from major disasters or emergency  incidents, such as hurricanes, tornados, and fires. We recently reported  that, from fiscal years 2005 through 2014, the federal government  obligated at least $277.6 billion in disaster assistance through a range of  programs. One such program, Public Assistance (PA), provides grants to  state, local, territorial, and tribal governments and certain nonprofit  organizations following a disaster. Administered through the Federal  Emergency Management Agency (FEMA), a component of the  Department of Homeland Security (DHS), PA provides financial  assistance for debris removal; emergency protective measures; and the  repair, replacement, or restoration of disaster-damaged, publicly owned  facilities, and the facilities of certain private nonprofit organizations. From fiscal years 2009 through 2016, FEMA obligated more than $36 billion in  grants for such projects.

As in the case of many federal grant programs, FEMA provides PA funds  to a state recipient which, in turn, passes these funds along to a local  entity, based on an application for assistance. Applicants who request  disaster assistance through the PA program are entitled to appeal any  decision regarding how FEMA determined their eligibility for PA grant  funds, including obligated amounts of PA funding. FEMA can also  deobligate PA funding when it finds, for example, that ineligible work was  performed, incurred costs were later deemed unreasonable, or improper  procurement methods were used. Applicants can also appeal decisions  resulting from FEMA audits of PA projects, even after a project has been  completed and closed as long as the appeal is filed in a timely manner.

To appeal a decision, applicants are afforded two opportunities: (1) a first- level appeal to the relevant FEMA regional office to be decided by the  Regional Administrator and (2) a second-level appeal to be decided at  FEMA headquarters by the Assistant Administrator for the Recovery  Directorate or the PA Division Director through a delegation of authority.  FEMA regulations implement the statutory time frames for applicants to  file an appeal, for the state to transmit the appeal to FEMA, and for FEMA  to respond to the appeal.

We and the DHS Office of the Inspector General (OIG) have identified a  number of issues related to FEMA’s PA program, including its PA appeals  process. For example, in 2008, as part of our review of FEMA’s  administration of the PA program, we found that, following Hurricanes  Katrina and Rita, FEMA often did not make decisions on applicant  appeals within statutorily required time frames. In 2011, the DHS OIG  also identified areas for improvement in the PA appeals process,  including the timeliness of processing an appeal and communicating with  applicants about the status of their appeals. In 2013, FEMA stood up the  Public Assistance Appeals Branch (PAAB) within the Office of the  Recovery Directorate in an effort to respond to these concerns, adding an  auditing component to the Branch in 2014.

You asked us to review aspects of FEMA’s management of the PA  appeals process. This review examines: (1) the extent to which FEMA  ensures quality in its data on appeals and what FEMA data show about  its appeals inventory and timeliness for appeals decisions; (2) what steps  FEMA has taken to improve its management of the appeals process and  what challenges, if any, remain; and (3) the extent to which FEMA has  developed goals and measures to assess the PA appeal program’s  performance.

To address the first objective, we obtained and analyzed data from FEMA  on all first- and second-level appeals that the agency received between  January 2014 and July 2017. We focused on this time frame because it  contained the most complete and available data at the time of our review.  We identified various discrepancies in the first-level appeal data, which  we discussed with knowledgeable FEMA staff and present later in this  report. In response to our discussions, FEMA provided us with corrected  data to address the identified discrepancies. After obtaining the corrected  data and making adjustments to our analysis based on our discussions  with FEMA officials, we determined that the appeals data from FEMA  were sufficiently reliable to provide information on PA appeals, including  appeals inventories, outcomes, amounts in dispute, and processing times  that we present in this report. We also obtained and analyzed FEMA  policies and procedures related to tracking appeals data, including those  related to regional offices, and evaluated them using Standards for  Internal Control in the Federal Government.

To address the first and second objectives, we also administered  semistructured interviews to officials from 3 of FEMA’s 10 regional offices  (Regions II, IV, and VI) with the highest number of first- and second-level  pending appeals. We asked these officials about their efforts to process  and track appeals, what improvements had been made regarding how PA  appeals are processed, as well as any challenges they have faced in  processing PA appeals since 2013.To select these offices, we obtained  data from FEMA on first- and second-level appeals that were pending a  decision, as of October 31, 2016. Collectively, appeals from these 3  regional offices represented 69 percent of all pending first-and second- level appeals FEMA had received as of October 31, 2016. We focused on  this time frame because it contained the most recent data for our  selection of FEMA regional offices at the time we began our review. To  obtain additional perspective on what, if any, challenges remain in  FEMA’s management of the appeals process, we also interviewed state  emergency management officials in six states (two states in each of the  corresponding 3 FEMA regional offices.) (See figure 1.)

To additionally address the second objective, we reviewed FEMA  documentation, such as standard operating procedures (SOP) and  policies, directives, internal staffing requests, appeals analyst position  descriptions, and other internal memoranda. We used these sources to  identify what steps FEMA had taken to improve its management of the  appeals process since 2013. We also used this information to supplement  our understanding of the challenges FEMA, including its regional officials,  raised during our interviews discussed above.

To address the third objective, we obtained FEMA internal reports— including briefs and newsletters—and performance plans to identify goals  and measures FEMA had developed to assess the appeals program. We  assessed that information against federal internal control standards and  leading practices we have identified in our prior work for managing for  results to determine the extent to which FEMA had developed goals and  measures to assess program performance.

For all three objectives, we reviewed relevant legislation and interviewed  officials in PAAB and FEMA’s Recovery Directorate. See appendix I for a  more detailed description of our scope and methodology.

We conducted this performance audit from July 2016 to December 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

The Robert T. Stafford Disaster Relief and Emergency Assistance Act  (Stafford Act), as amended, defines FEMA’s role during disaster response  and recovery. One of the principal programs that FEMA operates to  fulfill its role is the PA program. PA is a complex and multistep grant  program administered through a partnership between FEMA and states,  which pass these funds along to eligible local grant applicants. Thus, PA  entails an extensive paperwork and review process between FEMA and  the state based on specific eligibility rules that outline the types of  damage that can be reimbursed by the federal government and steps that  federal, state, local, territorial, and tribal governments as well as certain  nonprofit organizations must take in order to document eligibility. The  complexity of the process led FEMA to re-engineer the PA program,  which FEMA has referred to as its “new delivery model.” FEMA began  testing the new delivery model at select disaster locations in 2015, in  preparation for implementing it nationwide for all new disasters. On  September 12, 2017, FEMA announced that the new delivery model  would be used in all future disasters unless determined infeasible in a  particular instance.

The process begins after FEMA determines that the applicant meets  eligibility requirements. FEMA then works with the state and the applicant  to develop a project worksheet describing the scope of work and  estimated cost. Once FEMA and the applicant agree on the damage  assessment, scope of work, and estimated costs, the PA grant obligation  is determined. After FEMA approves a project, funds are obligated—that  is, they are made available—to the state recipient, which, in turn, passes  the funds along to applicants.

Applicants may appeal project decisions if they disagree with FEMA’s  decisions on project eligibility, scope of damage, or cost estimates.  Appealable decisions can occur at various times during the PA grant  process, including during project closeout as long as they meet applicable  time limits.

Figure 2 summarizes the first- and second-level appeals process under  FEMA’s PA program. The first-level appeals process begins after FEMA  makes its determination on a project for PA grant assistance. Within 60  days of receiving FEMA’s initial determination, the applicant must file an  appeal through the state to the relevant FEMA regional office.

The state must forward the appeal and a written recommendation to the  relevant FEMA regional office within 60 days. In reviewing the first-level  appeal before forwarding it to FEMA, the state has discretion to support  or oppose all or part of the applicant’s position in the appeal.

Under the Stafford Act, the FEMA regional office shall render a decision  within 90 days from the date it received the first-level appeal from the  state. The PA appeals process can take longer if regional officials issue  a request for information (RFI) to the applicant or request technical advice  from subject-matter experts. According to a senior PAAB official, a  regional office may issue an RFI or seek technical advice when an  applicant’s appeal is incomplete, lacks referenced documentation, or  raises additional eligibility concerns. The regional office may issue  multiple RFIs prior to rendering a final decision on an appeal. Within 90  days following the receipt of the requested additional information or  following expiration of the period for providing the information, FEMA is to  notify the state in writing of the disposition of the appeal.

Regional Administrators are responsible for authorizing a final decision on  a first-level appeal. A decision may result in an appeal being granted,  partially granted, or denied. An appeal is considered granted when FEMA  has approved the relief requested by the applicant as part of the appeal.  An appeal is considered partially granted when FEMA has approved a  portion of the relief requested by the applicant. An appeal is considered  denied when FEMA has decided not to approve the relief requested by  the applicant. If the regional office is considering denying or partially  granting a first appeal, it must issue an RFI to provide applicants with a  final opportunity to supplement the administrative record (i.e., the  documents and materials considered in processing a first-level appeal),  which closes upon issuing a first-level appeal decision. According to a  senior PAAB official, this process adds additional time to first-level appeal  processing, but ensures that FEMA has considered all relevant and  applicable documentation. The applicant may file a second-level appeal  through the state within 60 days of receiving a first-level appeal decision.  The second-level appeal must explain why the applicant believes the  original determination is inconsistent with law or policy and the monetary  amount in dispute. The state then has 60 days to provide a written  recommendation to FEMA. In reviewing the second-level appeal, just as  with the first-level appeal, the state has discretion to support or oppose all  or part of the applicant’s position in the appeal.

The FEMA Assistant Administrator for Recovery or the PA Division  Director through a delegation of authority shall render a decision within 90  days of receipt of the second-level appeal from the state. All second-level  appeal decisions are posted to FEMA’s website, so applicants can review  the previous decisions. As is the case with first-level appeals, the PA  appeals process can take longer if PAAB officials request additional  information or technical advice on an appeal. These requests must also  include a date by which the information must be provided. According to a  senior PAAB official, RFIs are seldom issued for second-level appeals  because the administrative record is closed after a decision is rendered  on a first-level appeal. Similarly, this official told us that technical advice is  rarely sought for second-level appeals because such issues are typically  explored during the first-level appeal process. Within 90 days following  the receipt of the requested additional information or following expiration  of the period for providing the information, FEMA is to notify the state in  writing of the disposition of the appeal. FEMA’s response to a second- level appeal is the last and final agency decision in the appeals process.

Organization of FEMA’s PA Appeals Program

Located within the Recovery Directorate, PAAB maintains overall  responsibility for administering and overseeing FEMA’s PA appeals  program. Among other things, PAAB is responsible for ensuring that all  appeal decisions are issued within regulatory timelines by developing and  maintaining SOPs; arranging for supplemental staff support as needed;  providing regular updates for both first- and second-level appeal  decisions through a range of communications; and providing training to  certify PA program staff on appeals processing.

PA program appeals staff in each of FEMA’s 10 regional offices are  responsible for processing first-level appeals, while PAAB staff in FEMA’s  Headquarters office are responsible for processing second-level appeals.  Accordingly, each regional office is required to follow FEMA’s Directive,  Manual, and Regional SOP for processing first-level appeals, consistent  with those established for second-level appeals. FEMA regional offices  are also required to forward all incoming second-level appeals to PAAB.  In addition, regional office staff must, within 3 business days of receiving  a first-level appeal from a state, provide an electronic copy of the appeal  to the PAAB via FEMA’s shared workspace SharePoint site. As noted in  FEMA’s Recovery Directorate Appeals Manual, this step enables PAAB  staff to identify and track appeals issues and trends in development  across all FEMA regions.

The roles and responsibilities for both first-and second-level appeals are  defined in FEMA’s SOPs. For example, certified appeals analysts are  responsible for reviewing incoming appeals for completeness,  researching and drafting appeal decisions, and generating RFIs. Lead  appeals analysts are the first-line reviewers of appeal decisions and RFIs,  and provide guidance on PA program and policy issues, coordinate  appeals assignments, and review work of appeals analysts. Further,  appeals coordinators are responsible for receiving incoming appeals,  tracking the processing of those appeals, updating the appeal status, and  processing other appeals-related correspondence and reports.

Prior Reviews Examining the PA Appeals Process

We have identified a number of issues related to FEMA’s management of  the PA appeals program in our prior audit work, as has DHS’s OIG. In our  2008 review of FEMA’s administration of the PA program following Gulf  Coast Hurricanes Katrina and Rita, we identified challenges related to  applicants’ experience with appeal processing delays and that FEMA  often did not make decisions on appeals within the 90-day statutory time  frame. Other challenges identified were that FEMA did not inform some  applicants of the status of their appeal, or, in some cases, assure them of  the independence of the FEMA officials making appeal decisions.  Specifically, some applicants perceived there to be a conflict of interest  because the PA program staff responsible for reviewing appeals was the  same staff that had made the PA project decision that was being  appealed. We did not make recommendations to FEMA to address these  challenges in our 2008 review, but rather described the challenges as  part of the status of overall Gulf Coast hurricane recovery efforts.

In 2011, DHS’s OIG conducted a review of FEMA’s PA appeals process  and made a number of recommendations aimed at improving aspects of  the process, including the timeliness of appeals processing, appeals  staffing, and the accuracy of appeals data. As in our 2008 review, the  OIG identified appeal processing delays occurring at both FEMA regional  offices and at headquarters. For example, the report found that appeals  were left open for long periods of time and that some regional offices as  well as FEMA headquarters took more than 90 days to issue a decision  on first- and second-level appeals. Further, the OIG review found that  staffing approaches employed by individual regional offices contributed to  processing delays and varying processing timeframes. For example, the  management and processing of first-level appeals varied by FEMA  regional office in that some regional offices assigned staff specifically to  review appeals, while other offices assigned staff to appeals processing  as part of their other responsibilities within the PA Program, such as  determining eligibility for PA assistance. Further, second-level appeals  were processed by various offices within FEMA headquarters, and FEMA  had not established guidelines to complete work within a specific  timeframe.

Moreover, the OIG review found inaccuracies with FEMA’s system for  tracking appeal processing times for second-level appeals, resulting in  unreliable information being reported to FEMA management regarding  compliance with the 90-day statutory time frame. Lastly, the OIG reported  that some applicants had been unable to obtain information on the status  of their appeals and that FEMA did not provide meaningful feedback to  resolve applicants’ inquiries.

Weaknesses Exist in FEMA’s Oversight of Data Quality, but Corrected FEMA Data Showed Fluctuations in Appeal Inventory and Delays in Processing

Our review of FEMA data that track first- and second-level appeals  showed weaknesses in the agency’s data quality practices that affect  program oversight. For example, we found that FEMA regional offices do  not track first-level appeals data consistently or update this data regularly,  resulting in missing data entries. Further, we found that FEMA’s appeal  tracking process does not ensure data quality, limiting FEMA’s ability to  use the data for making decisions on and improvements to the PA  appeals process. During our review, we discussed with FEMA officials the  discrepancies we found with these appeals data. FEMA officials  acknowledged these data quality issues and provided us with corrected  data to address these discrepancies for our analysis in this report. Our  analysis of the corrected FEMA data showed that, between January 2014  and July 2017, FEMA received over 1,400 first- and second-level appeals  with amounts in dispute totaling about $1.5 billion. Across all years, first- level appeals accounted for the majority of appeals, though the number of  appeals fluctuated widely each year. Over the same period, only a small  percentage of first-and second-level appeals were processed within the  90-day statutory time frame.

Weaknesses in FEMA’s Tracking and Data Quality Practices Affect Program Oversight

To administer and oversee the PA appeals program, FEMA collects and  tracks information on first- and second-level appeals. Based on FEMA’s  SOP, the agency uses this information to identify trends throughout the  appeals process and identify areas in need of improvement. Specifically,  PAAB uses two Excel spreadsheets for collecting and analyzing first- and  second-level appeals data. The spreadsheet for collecting second-level  appeals data is updated and maintained by PAAB, while the spreadsheet  for first-level appeals is based on input from FEMA’s 10 regional offices.

Based on our detailed review of the spreadsheets, they contain numerous  data fields on the status and outcomes of first-level appeals, such as the  date the regional office received the appeal, the date an RFI was issued,  the date the Regional Administrator signed the decision, the amounts  being disputed by the applicant, and keyword information regarding the  subject of the appeal.

PAAB requests that regional offices update appeal information in the first- level appeal spreadsheet as changes occur on an appeal. PAAB then  uses this data to assess trends in regional office appeals processing,  which it includes in various performance and other internal reports that  are shared with FEMA management and used to monitor the program.  According to PAAB officials, such information provides valuable support  to PAAB as well as the PA program by sharing information about filings,  progress, and PA program decision making. However, while PAAB’s  tracking efforts help maintain visibility over and provide some monitoring  of the appeals processing, we found that data fields for first-level appeals  were not consistently reported or updated and that PAAB has no  processes to ensure the quality of these data. As a result, data on first- level appeals may not have the accuracy needed for effective reporting  and oversight efforts.

FEMA Regional Offices Do Not Track Appeals Information Consistently or Update First- Level Appeal Information Regularly

Our review of first-level appeals data showed that, between January 2014  and July 2017, regional offices did not consistently report first-level  appeal information for a number of the key data fields in the PAAB first- level appeal tracking spreadsheet. Specifically, we found missing entries  for the majority of the spreadsheet’s 50 data fields. For example, we  found that about one-third of the time, regional offices had not completed  the data field for amounts being disputed by the applicant for pending  appeals or indicated whether or not money was in dispute in the appeal.  We also found that the regional offices had generally not entered the date  that the regional appeal staff had completed an initial review of the  appeal—99 percent of entries were missing for this field. In another  example, the data field that captures keywords was missing in over 33  percent of data entries. PAAB officials told us that keywords are an  important tool for understanding the root causes of an appeal.

Further, we found a number of missing data entries for key dates for one  regional office in particular. Specifically, this office had not recorded  entries for any of the data fields related to key dates in the appeal  process, such as the date the first-level appeal was assigned to an  appeals analyst, the date the appeal was reviewed by the Regional  Administrator, and the date the first-level appeal decision was sent to and  received by the applicant. PAAB officials told us that PAAB uses these  dates to calculate appeal processing times as part of its effort to evaluate  trends in appeal information and identify potential areas for improvement,  including timeliness. However, officials from this regional office told us the  office does not consistently update information in the PAAB first-level  appeal tracking spreadsheet and does not consider it a priority. Rather,  the office considers the actual processing of first-level appeals a priority.

In addition, our analysis of first-level appeals data also showed that there  was limited standardization of recording entries within fields. For example,  officials in one of the three regional offices in our review told us that, in  some instances, they combine first-level appeals that involve direct  administrative costs and record them as a single appeal. However, the  other two regional offices in our review told us they do not combine  individual appeals that involve direct administrative costs. Rather, they  count each as a separate appeal. The lack of standardization in the way  appeals are counted could result in some types of appeals being over- or  under-reported. More specifically, these inconsistencies may affect  PAAB’s ability to compare appeal processing capacity between regional  offices and accurately report the regions’ performance.

FEMA’s Appeal Tracking Process Does Not Ensure Data Quality

PAAB officials acknowledged inconsistencies in first-level appeals  reporting, but noted that under FEMA’s SOP, the regional offices are  responsible for entering first-level appeal information. According to PAAB  officials, this responsibility is emphasized during training sessions with  appeal staff. However, we found that FEMA has no automated data entry  checks for information the regions enter into PAAB’s first-level appeal  tracking spreadsheet and does not monitor data fields for missing or  conflicting data. Regional offices do not have a means for electronically  uploading first-level appeal information to PAAB and must manually input  data into the spreadsheet. PAAB’s process then simply confirms receipt  of the information through an email exchange with the regional office staff  who manually input the information.

PAAB officials told us that they rely on regional office appeal staff to  confirm and validate the first-level appeals data that are provided to  PAAB for internal reporting. However, PAAB has no independent and  consistent method of verifying the accuracy of the appeals data reported  to it by the regional offices. PAAB officials also noted that there is no  systematic process or method to identify these errors and generate an  error report.

Moreover, another limitation that we identified in the spreadsheet used by  the regional offices is that it is not clear what blank data fields represent— that is, whether data does not exist or whether data that exists were not  recorded. PAAB officials acknowledged that blank data fields in the first- level appeal tracking spreadsheet created reporting challenges, such as  whether the data field was not applicable to a particular appeal, the  appeal staff for a particular region did not collect this information, or  existing information was not recorded. We also identified a number of  other data entries that were erroneously recorded as first-level appeals.  Specifically, the information entered related to requests for adjustments to  PA project funding and should not have been entered into the tracking  spreadsheets as appeals.

Standards for Internal Control in the Federal Government advises  management to process data into quality information that is appropriate,  current, complete, accurate, accessible, and provided on a timely basis.  Additionally, management should evaluate processed information, make  revisions when necessary so that the information is quality information,  and use the information to make informed decisions. By developing and  implementing processes and procedures to ensure a uniform and  consistent approach for tracking first-level appeals data and better  integrating regional trackers with PAAB’s own first-level appeals tracker,  PAAB will have greater assurance that it is collecting the comprehensive  and complete appeals processing performance information it needs from  the regional offices. Further, by identifying data discrepancies and other  anomalies in its data queries and the resulting datasets, PAAB may be  able to identify overall weaknesses in its data recording process, thereby  allowing it to more accurately report on first-level appeals information.  Without obtaining quality appeals data, FEMA will not be able to identify  existing gaps in its appeals information and address areas in need of  improvement, such as meeting statutory timeframes.

Corrected FEMA Data Showed Fluctuations in Appeal Inventory

After we shared our concerns about the appeals data with FEMA officials,  they corrected the errors in their data and provided us a corrected data  set to use for our analysis in this report. Based on our analysis of this  corrected data we determined that, from January 2014 to July 2017,  FEMA received over 1,445 first- and second-level appeals with amounts  in dispute totaling about $1.5 billion. Across all years, first-level appeals  accounted for the majority of appeals, though the number of appeals  fluctuated widely between years. (See figure 3.) FEMA officials told us  that the number of appeals they received has varied year to year and that  increases or decreases in appeals are largely a function of the number of  and severity of disaster events. That is, the greater the number of  disasters declared and the more extensive the damage, the greater the  number of PA program grants FEMA may issue to applicants, which in  turn, may affect the likelihood that an applicant will appeal a FEMA  decision regarding a grant.

FEMA issued a decision on 953 of the appeals it received between  January 2014 and July 2017. As shown in table 1, another 349 appeals  were pending and awaiting a decision as of July 2017. The remaining 143  appeals were withdrawn by the applicant during the appeals process.

Our analysis of the corrected FEMA data also found that, for appeals  received between January 2014 and July 2017, total first- and second- level pending and decided appeals involved amounts in dispute totaling  over $1.3 billion (excluding the 143 appeals that were withdrawn by the  applicant during the appeals process). As shown in figure 4, at least a  third of both first-and second-level pending and decided appeals (35  percent and 44 percent, respectively) involved amounts in dispute that  ranged from $1 to $99,999. Less than 10 percent of both first- and  second-level pending and decided appeals (9 percent and 8 percent,  respectively) did not involve monetary amounts in dispute.

In rendering a final decision on an appeal, FEMA can grant, partially  grant, or deny the appeal. Our analysis showed that FEMA granted  nearly a third of the 779 first-level appeals filed, awarding applicants over  $85 million. As shown in figure 5, FEMA also partially granted about 19  percent of first-level appeals filed, which involved amounts in dispute  totaling over $63 million. Further, figure 5 shows that over one-third of the  174 second-level appeals were either granted or partially granted.  Specifically, FEMA granted about 26 percent of second-level appeals  filed, awarding over $43 million, while the agency partially granted about  7 percent of second-level appeals filed, involving amounts in dispute  totaling almost $19 million.

FEMA Exceeded Statutory Processing Times

Our analysis of the corrected FEMA appeal data showed that, on  average, FEMA took more than three times the 90-day statutory time  frame to process an appeal, which includes rendering a decision.

Specifically, for first- and second-level appeals that FEMA received  between January 2014 and July 2017 and that FEMA decided during the  same period, FEMA’s average processing time was 297 days. The  processing time for decided first-level appeals averaged 293 days, while  the processing time for decided second-level appeals averaged 313 days.  Further, as shown in figure 6, only a small percentage of decided first-and  second-level appeals (9 and 11 percent, respectively) were processed  within the 90-day statutory time frame.

For pending appeals, we found that, at the time of our analysis in July  2017, FEMA had taken on average, more than three times the 90-day  statutory time frame for rendering decisions. Specifically, as of July 2017,  FEMA had not rendered a decision on 349 appeals, which had an  average processing time of 299 days. As of July 2017, the processing  time for pending first-level appeals averaged 306 days, while the  processing time for pending second-level appeals averaged 267 days.  Figure 7 shows the ranges of processing times as of July 2017 for both  first-and second level pending appeals.

Officials from PAAB and the three regional offices in our review  acknowledged that they experienced challenges processing appeals  within the 90-day statutory time frame. They told us that issuing RFIs to  the applicant can contribute to lengthy processing delays. According to  PAAB officials, issuing an RFI may contribute to long processing periods  if the information relates to a complex appeal—for example, an appeal  involving multiple engineering issues. An appeal decision can also be  delayed if FEMA issues an RFI because an applicant submitted  incomplete documentation to support an appeal. Under FEMA regulation,  these requests do not count against processing times and the 90-day  time frame in which FEMA can render a decision on an appeal.

However, our analysis of the corrected FEMA data showed that FEMA  exceeded its statutory time frames even when it did not issue an RFI.

Specifically, between January 2014 and July 2017, FEMA issued an RFI  in about 59 percent—or 560—of the 953 first- and second-level appeals  for which it rendered a decision. In 48 percent (267) of those decided  appeals, FEMA had issued the RFI after the 90-day time frame had  elapsed. FEMA did not issue RFIs for about 41 percent (393) of decided  first- and second-level appeals. In 78 percent (305) of those appeals,  FEMA’s processing time still exceeded the 90-day statutory time frame.

State emergency management officials from five of our six selected states  told us that they experienced long wait times for first- and second-level  appeal decisions and that FEMA rarely processed appeals within the 90- day time frame required by statute. State emergency management  officials further told us that such delays adversely affect applicants, such  as municipalities and localities, which may wait prolonged periods to  resolve project eligibility and costs related to rebuilding efforts. Delays in  FEMA’s decision making may also result in additional costs to both the  state and the applicant, according to these officials. For example, the  state may pursue funding from an applicant if FEMA decides to  deobligate funds from the applicant for PA projects that have already  been completed. As discussed earlier in this report with respect to the  PA process, FEMA may do this if it finds that the applicant did not meet  certain PA project requirements. In these instances, the applicant may  appeal FEMA’s decision, but the state may need to begin administrative  proceedings against the applicant to recover or offset the deobligated  funds. One state emergency manager told us that some applicants  withdrew their appeals because of the prolonged delays in receiving a  final decision.

According to state emergency management officials, delays in FEMA’s  appeal decisions can create significant challenges for local government  entities, such as counties and school districts. Officials from one state  provided an example of a rural school district that sought PA funding to  bus displaced children who had been left homeless from damage caused  by Hurricane Irene. According to relevant federal and state documents  these officials provided us, these children had been moved to shelters  outside of their school district and needed transportation to be able to  attend school. The school district applied to FEMA for transportation  costs associated with hiring an additional bus driver to bus the children to  the schools in the district. FEMA denied the school district’s request,  based on its interpretation of the Stafford Act and the eligibility of costs  related to emergency public transportation. The district subsequently filed  a first-level appeal in November 2015. FEMA took over a year to issue a  decision and, in December 2016, denied the district’s first-level appeal.  State management officials told us that incurring these unanticipated  transportation costs while waiting for FEMA to decide the appeal has a  major effect on the school district and the community as a whole, and can  lead to the elimination of school programs or staff. The school district  subsequently filed a second-level appeal in February 2017. FEMA denied  the appeal in August 2017.

State emergency management officials we interviewed provided an  additional example wherein a small town had applied for PA grant funding  to rebuild a retaining wall and roadway following damage caused by  Hurricane Irene. According to relevant federal and state documents  officials provided us, the overflowing banks of a tributary caused a  retaining wall, which protected a nearby roadway, to wash away. The  roadway, which provided access to residential properties near the  tributary, was significantly damaged, due to the overflow. The town  requested funding to repair the roadway and to replace and extend the  retaining wall another 250 feet beyond the original wall in order to protect  the roadway from future flood events. FEMA approved the PA funding to  repair the roadway. However, FEMA denied the town’s application for PA  assistance to extend the wall beyond its original length. In doing so,  FEMA concluded that the proposed work was ineligible for assistance  because it significantly changed the retaining wall’s predisaster  configuration and that such a change constituted an improved project,  making it ineligible under FEMA regulations and policy. The town then  filed a first-level appeal in April 2014. More than 2 years later—in June  2016—FEMA denied the town’s first-level appeal, upholding FEMA’s  original determination. The town subsequently filed a second-level appeal  in September 2016. Over a year later, PAAB was still reviewing the  appeal.

FEMA Has Taken Steps to Improve Appeals Processing, but Faces Challenges with Its Appeals Workforce

FEMA has taken a number of steps to improve its management of the  appeals process and respond to issues raised by us and the DHS OIG  related to processing delays. As we presented earlier in this report, our  2008 review, and DHS’s subsequent 2011 OIG review, identified a  number of organizational and procedural issues related to processing  delays, staff independence, and communications with applicants.  Responding to these issues, FEMA created the PAAB within the  Recovery Directorate at FEMA Headquarters in late 2013, adding an  auditing component to the Branch in 2014. PAAB then established a  core of full-time staff at FEMA headquarters that were specifically  assigned to process second-level appeals. At the same time, through the  Recovery Directorate, each of FEMA’s 10 regional offices was assigned  full-time staff for processing first-level appeals. Prior to PAAB, second- level appeals were processed by various offices within FEMA  headquarters, while the management and processing of first-level  appeals varied by FEMA regional office. Some regional offices assigned  staff specifically to review appeals, while other offices assigned staff to  appeal processing as part of their other responsibilities within the PA  Program, such as determining eligibility for PA assistance.

In standing up PAAB, FEMA also established an SOP that describes the  organizational structure of PAAB, as well as its responsibilities and the  roles of its staff. The SOP also addresses procedures related to PAAB’s  responsibility for managing the entire PA appeals program. These  responsibilities include reporting on appeal processing performance,  providing training to appeals staff, and identifying PA appeal process and  policy improvements. FEMA later issued a regional SOP that included  procedures to help regional offices reduce the number of appeals that  exceeded statutory time frames. These procedures reflected an ongoing  effort to leverage internal resources when regional offices exceed processing capacity. Specifically, a regional office can submit a request to  PAAB for assistance from analyst staff from other regions or from PAAB  to assist with processing first-level appeals. PAAB may then temporarily  assign an appeals analyst from PAAB or from another regional office to  assist the regional office making the request. For example, one regional  office official told us his office had requested assistance with 10 first-level  appeals and PAAB was able to accommodate the request by assigning 8  of the 10 appeals to another region for processing. According to a senior  PAAB official, this procedure allows FEMA to maximize use of its national  appeal processing capacity. As of October 2017, PAAB had transferred  77 appeals from overwhelmed regional offices to those with capacity to  process additional appeals.

Further, FEMA procedures now require that a conflict check be performed  to determine whether the analyst was involved with a PA project  determination that is substantively related to the appeal. If a conflict is  identified, options include disqualifying the appeals analyst from working  on the appeal, or requesting the appeal be transferred to another regional  office or PAAB for processing. State emergency management officials  from five of the six states in our review told us that they believed that  issues related to the independence of appeals staff had been addressed  and were no longer an issue.

PAAB also took steps to improve communication with applicants by  creating an online second-level appeal tracking spreadsheet—accessible  through the Internet—intended to provide applicants with information on  the status of second-level appeals. The spreadsheet includes, among  other things, the date the appeal was received by FEMA headquarters,  the date that an RFI was sent to the applicant, whether the appeal was  “under review,” whether a final decision had been granted, and the date  any final decision was signed.

FEMA also took steps to increase its staffing levels. In January 2015,  FEMA’s Recovery Directorate completed a workforce analysis and  determined that additional appeals analysts were needed to address  capacity issues that were resulting in growing inventories of first-level  appeals. At the time, FEMA concluded that, in addition to its 23 on-board  appeals analysts, an additional 29 appeals analysts were needed to  support the existing, as well as anticipated, appeal inventory increases  across FEMA’s 10 regional offices. The Recovery Directorate requested  and was subsequently authorized the additional appeals analyst  positions, which, when filled, would provide the PA appeal program with a  total of 52 first-level appeals analysts. With the exception of Region I,  FEMA planned to provide each of the remaining 9 regional offices with at  least 1 additional appeals analyst. Regional offices with the heaviest  workloads, such as Region II and Region IV, would be allocated more  appeals analysts. FEMA took steps to fill these positions over the next 2  years, and by June 2017, FEMA had filled 47 of the 52 positions.

Despite efforts to improve its management of the appeals process, FEMA  faces a backlog of both first- and second-level appeals among the three  selected FEMA regional offices as well as PAAB. According to officials in  PAAB and the three regional offices in our review, workforce challenges  contribute to delays in processing PA appeals, even with the  improvements described above.

PAAB and the three regional offices in our review identified the following  workforce challenges that contributed to PA appeal processing delays.

Staff vacancies, inexperience, and turnover: Despite FEMA’s  efforts to increase its appeals analyst staffing level—an effort that  began in 2015—two of the three regional offices in our review had  a number of vacancies for these positions through June 2017.  PAAB and regional officials told us that such vacancies, which  occurred over a prolonged period, contributed to appeal  processing delays.

FEMA data on appeals analyst staffing show that FEMA took  nearly 2 years to fill the additional appeals analyst positions  across its 10 regional offices. For example, in 1 of the regional  offices in our review, 3 of the 8 appeals analyst positions were  vacant through 2016 and were not filled until July 2017. Further,  officials in this regional office told us that the current staffing level  of 8 appeals analysts was inadequate to keep pace with the  region’s increasing appeal inventory. Similarly, 6 of PAAB’s 11  appeals analyst positions were vacant from August 2015 to  October 2016. By July 2017, PAAB had filled all but 2 appeals  analyst positions. PAAB officials told us the appeals analyst  staffing level consisting of 52 positions was a preliminary estimate  and that this staffing level has not been adequate in regions with  heavy workloads and appeal inventories. PAAB officials also  acknowledged the potential benefits of having an appeals analyst  staffing plan, but stated that they are not yet prepared to update  the workforce assessment for PAAB and the regional offices, nor  do they have plans to do so until full staffing is achieved. These  officials also told us that they are still working to achieve the  staffing levels developed in 2015 and are taking steps to address  staffing challenges through more targeted hiring and use of career  ladder positions.

Further, PAAB staffing data showed that almost half of PAAB’s  staff had less than 1 year of experience. PAAB officials told us  that prior vacancies and a large number of inexperienced staff  have contributed to processing delays and second-level appeal  backlogs. PAAB officials also told us that retaining trained appeals  analysts has been challenging due to limited career advancement  opportunities within the appeals analyst position. These officials  told us that although not required, individuals who typically apply  for an appeals analyst position possess a law degree, and that  once hired, some of them apply for attorney positions within PAAB  or in various offices within FEMA or DHS. For example, PAAB  staffing data showed that within 18 months of being hired by  PAAB, four PAAB appeals analysts applied for and were  subsequently hired as attorney-advisors within PAAB or other  FEMA departments. Then those appeals analyst positions were  vacant until the next round of hiring.

Regional officials told us it has been challenging to find qualified  applicants with the specialized skillset of an analyst position. They  told us that, ideally, an appeals analyst should be an expert in the  PA program and possess a nuanced understanding of the legal  issues associated with the program’s requirements. Regional  officials told us that, because of this specialized skillset, they look  to recruit PA appeals analysts from other FEMA regional offices  who may have an interest in relocating or are seeking a  promotion. However, while recruiting appeals analysts from other  regions may assist individual offices, it does not address FEMA’s  goal of achieving its staffing levels.

Delays in training appeals staff: FEMA requires that PA appeals  analysts undergo a certification course that includes 3 days of  training on processing appeals. The appeals analyst certification  course, delivered through PAAB, covers both procedural steps of  processing appeals as well as the policy and legal issues raised  by the PA program, and ensures that trainees can prepare a well- written appeal response. After completing the course, an analyst  in training must pass a test to demonstrate proficiency in  reviewing and analyzing appeals and preparing appeal decisions.  To this end, the analyst must analyze a mock appeal—based on  facts similar to those presented in a previously decided appeal— and draft an appeal decision.

FEMA policy states that only certified staff can serve as appeals  analysts and must be recertified every 2 years. However, some  appeals analysts in the regional offices in our review had not yet  undergone the certification process, but were nonetheless working  in an appeals analyst capacity under the supervision of certified  analysts. PAAB procedures also state that a trainee analyst  cannot assume work on an appeal without being supervised by a  certified analyst. For example, in one regional office, four of the  office’s nine appeals analysts had been working in their positions  for between 6 months to a year before they received appeals  analyst certification training. According to regional officials, this  increased the supervisory workload on the remaining five appeals  analysts within the region and the lack of timely training and  certification of appeals analysts affect the efficient processing of  appeals and can lead to delays in FEMA issuing appeal decisions.

Deployment of appeals staff to disaster response: According  to PAAB officials, while PA appeals analysts are considered  “dedicated” positions, these analysts can be deployed at any time  to provide assistance on a disaster, such as working with grant  applicants to document damages or assisting applicants in  developing project proposals to request PA grants. Officials from  two of the three FEMA regional offices in our review told us that  these deployments contributed to processing delays because,  given limited resources, assigning staff to continue work on the  appeal is not always possible. In one regional office, five of the  nine PA appeals analysts were deployed in late 2016 to do  recovery work related to damage from Hurricane Matthew. These  deployments lasted approximately 30 to 90 days and left the  regional office understaffed. Further, one regional office official  told us that maintaining continuity in processing an appeal can be  difficult for those analysts who are deployed because they must  pick up where they left off on their assigned appeals upon their  return.

A senior PAAB official told us that regional appeals analyst staff  have been deployed to assist with response and recovery efforts  as a result of the catastrophic damage from Hurricanes Harvey,  Irma, and Maria. As a result, these analysts have not been  available to process first-level appeals. This official further told us  that PAAB staff, including analyst staff—while not deployed—have  been assigned to support disaster operations. For example, one  staff member was assigned to support site inspector training,  while two others were assigned to stand National Response  Coordination Center watch. Further, one staff member was  assigned to support training and contract review functions and the  remaining staff members were assigned as call takers for the PA  Grants Manager and Grants Portal hotline.

To help overcome staffing shortages, according to FEMA  documents, all three regional offices in our review staffed  assistance from PAAB at various times during the past 2 years.  However, officials from two of the three regional offices in our  review told us that, based on their experiences, requesting staff  from PAAB or other offices had a number of limitations.  Specifically, because the originating regional office is ultimately  responsible for the appeal, its staff must continue to oversee the  appeal, including such responsibilities as tracking the appeal,  corresponding with the applicant and the state as needed, and  reviewing and approving the appeal decision. One regional office  official told us that this arrangement was not helpful and only  added an additional layer of complexity that delayed processing.  Another regional official told us that the quality of the borrowed  staff’s work was not consistent. This official further stated that,  because offices are not able to select the analysts that would be  assigned to work on their appeals, he was reluctant to use staff  from other regional offices.

According to leading human capital practices, the key to an agency’s  success in managing its programs is sustaining a workforce with the  necessary knowledge, skills, and abilities to execute a range of  management functions that support the agency’s mission and goals.  Achieving such a workforce depends on having effective human capital  management through developing human capital strategies. Such strategic  workforce planning includes the agency assessing current and future  critical skill needs by, for example, analyzing the gaps between current  skills and future needs, and developing strategies for filling the gaps  identified in workforce skills or competencies. Standards for Internal  Control in the Federal Government also states that agencies should  continually assess their needs so that they are able to obtain a workforce  that has the required knowledge, skills, and abilities to achieve their  organization’s goals. Further, as we have previously reported in our  work on strategic workforce planning, such staffing assessments should  be based on valid and reliable data.

However, FEMA has not developed a workforce staffing plan to identify  hiring, training, and retention needs of appeals staff across PAAB and the  regional offices. PAAB officials told us that they are still working to  achieve the staffing levels developed in 2015 and are taking steps to  address staffing challenges related to retention through more targeted  hiring and use of career ladder positions. In the absence of a workforce  plan for the PA appeals staff, FEMA will likely continue to experience  workforce challenges including vacancies in key appeals analyst  positions, appeals staff turnover, training delays, and understaffing due to  disaster deployment. These challenges will likely continue to contribute to  delays in FEMA’s processing and issuing first- and second-level PA  appeals decisions.

FEMA Established Goals and Measures to Assess Second- Level Appeal Processing, but Did Not Do So for First- Level Appeals

FEMA officials have acknowledged the importance of establishing goals  and measures to assess the performance of the PA appeals program. In  particular, for fiscal year 2016, FEMA’s Recovery Directorate established  two performance goals for PAAB’s processing of second-level appeals.  The first goal was aimed at reducing the inventory of second-level  appeals by 20 percent. The second goal was aimed at processing at least  30 percent of second-level appeals received in 2016 within 90 days of  receiving the appeal, in order to comply with FEMA statutory time  frames. FEMA internal documents showed that these two performance  goals were intended to reduce the second-level appeal inventory, and, at  the same time, promote a standard of timely second-level appeal  processing for PAAB.

According to PAAB officials, various factors beyond PAAB’s control  prevented PAAB from meeting these performance goals. These factors  included an unanticipated surge in the number of second-level appeals in  2016, as well as increased vacancies due to staff turnover in PAAB  analyst positions in 2016. Recognizing these factors, PAAB developed a  revised goal that focused on the number of appeals an analyst could  process per month. According to PAAB officials, focusing the revised  goal on analyst production controlled for external factors that tended to  affect overall processing, such as surges in appeal submissions and staff  turnover. PAAB officials told us that their proposed production goal was  not accepted by the Recovery Directorate for 2016, but that PAAB  adopted the revised goal for individual performance plans for PAAB  appeals analyst staff.

In contrast, although first-level appeals represent the majority of FEMA’s  appeal inventory, FEMA has not developed goals and measures to  assess the performance of first-level appeals processing across regional  offices. PAAB collects various data from all 10 regional offices on first- level appeals, such as the number of first-level appeals being processed,  as well as processing timeliness (i.e., appeals that exceeded time limits)  and key words that can help identify various appeal subject-matter  categories. PAAB then aggregates this data, which it publishes on a  quarterly and weekly basis in internal reports that it shares with FEMA  management. However, FEMA has not established goals to assess  performance against the information that PAAB collects. According to  FEMA officials, while the Recovery Directorate established goals and  measures for second-level appeals, it is not responsible for developing  goals and measures to assess performance within the regional offices.  These officials told us further that some Regional Administrators have  established goals and measures for first-level appeals within their  regional offices, while others have not.

For management to effectively monitor a program, Standards for Internal  Control in the Federal Government state that it should create goals and  measures to determine if a program is being implemented as intended. In  addition, the quality of the program’s performance should be assessed  over time and monitoring efforts should be evaluated to assure they help  meet goals. Further, Congress enacted the GPRA Modernization Act of  2010 (GPRAMA) to focus and sustain attention on agency performance  and improvement by requiring that federal agencies establish outcome- oriented goals and measures to assess progress towards those goals.  Specifically, agencies, like DHS, are required to monitor progress towards  the achievement of goals, report on that progress, and address issues  identified. Without consistent performance measures across FEMA  regional offices to help assess progress and identify deficiencies in  appeals processing, DHS and its subcomponent agencies like FEMA may  have difficulty providing accurate reporting on the effectiveness of current  efforts to process first-level appeals and on the factors that contribute to  ongoing appeal processing delays.

Although FEMA has made efforts to improve its management of the PA  appeals process, these efforts have been hampered by a number of  issues including weaknesses in FEMA’s appeals tracking data and its  ability to ensure the quality of this data. FEMA corrected its appeals data  for purposes of this report once we pointed out data discrepancies, but  FEMA does not have a process to ensure data quality issues are  permanently addressed. As a result, these weaknesses will persist. By  implementing procedures to consistently track appeals data and ensure  the quality of these data, FEMA will be in a better position to accurately  report on appeal processing performance and make informed decisions  about the appeals process.

FEMA also faces a variety of workforce challenges that have contributed  to appeals processing delays. These challenges include staffing  vacancies, lack of experienced staff, high rates of staff turnover, delays in  training appeals staff, and the deployment of appeals analysts for disaster  response, all of which have contributed to processing delays. Addressing  these challenges by identifying the hiring, training, and retention needs of  its appeals offices through strategic workforce planning could help FEMA  better position itself to reduce its appeals backlog and better respond to  PA appeals.

Further, although FEMA has established goals and measures for its  second-level appeals processing, it has not done so for first-level  appeals. By establishing goals and measures to assess the performance  of its first-level appeals process, DHS and FEMA will be able to better  evaluate the efficiency and effectiveness of its efforts to reduce the PA  appeal backlog and improve appeal processing times.

We are making the following four recommendations to FEMA:  The Assistant Administrator for Recovery should design and implement  the necessary processes and procedures to ensure a uniform and  consistent approach for tracking first-level appeals data to better integrate  regional trackers with PAAB’s own first-level appeals tracker.  (Recommendation 1)

The Assistant Administrator for Recovery should design and implement  the necessary controls to ensure the quality of the first-level appeals data  collected at and reported from the regional offices to PAAB.  (Recommendation 2)

The Assistant Administrator for Recovery should develop a detailed  workforce plan that documents steps for hiring, training, and retaining key  appeals staff. The plan should also address staff transitions resulting from  deployments to disasters.   (Recommendation 3)

The Assistant Administrator for Recovery should work with Regional  Administrators in all 10 regional offices, to establish and use goals and  measures for processing first-level PA appeals to monitor performance  and report on progress.   (Recommendation 4)

We provided a draft of this report to the Secretary of the Department of  Homeland Security and the Administrator of the Federal Emergency  Management Agency for review and comment. DHS provided written  comments, which are reproduced in appendix II. In its comments, DHS  concurred with our recommendations and described actions planned to  address them. FEMA also provided technical comments, which we  incorporated as appropriate. Additionally, we provided excerpts of the  draft report to state emergency management officials in the selected six  states we included in our review. We incorporated their technical  comments as appropriate.

Regarding our first recommendation, that FEMA design and implement  the necessary processes and procedures to ensure a uniform and  consistent approach for tracking first level-appeal data, DHS stated that  FEMA’s PAAB will develop guides and checklists for the regions to  ensure data uniformity and consistency and that PAAB will update its data  review process, and develop additional content highlighting the  importance of data integrity and accuracy. DHS estimated that this effort  would be completed by July 31, 2018.

Regarding our second recommendation, that FEMA design and  implement the necessary controls to ensure first-level appeal data quality,  DHS stated that PAAB will include content within the certified appeal  analyst training highlighting the importance of data integrity and that first- level appeal data will be reviewed by PAAB on a quarterly basis. DHS  estimated that this effort would be completed by February 28, 2019.

Regarding our third recommendation, that FEMA develop a detailed  workforce plan for hiring, training and retaining key appeals staff, DHS  stated that by December 31, 2018, PAAB will produce a workload flow  assessment on second-level appeals staffing and determine whether  appeal timeliness issues still exist. If PAAB determines that significant  response timeliness issues on second-level appeals still exist after most  PAAB appeal analyst staff have at least one year of experience, a  detailed PAAB workforce plan will be completed and finalized by  December 31, 2019. PAAB will also complete an assessment of first-level  appeal inventory and timeliness issues. If PAAB determines that  significant regional response inventory and timeliness issues on first-level  appeals still exist, FEMA will create a working group to prepare a detailed  regional workforce plan. DHS estimated that this effort would be  completed by December 31, 2019.

Regarding our fourth recommendation that FEMA work with Regional  Administrators to establish and use performance goals and measures for  processing first-level appeals, DHS stated that PAAB has begun  developing a methodology for establishing, measuring, and reporting on  first-level appeals processing goals and performance progress, and that  PAAB would work with the regions to complete and finalize this  methodology. DHS estimated that this effort would be completed by  August 31, 2018.

As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we are sending copies of this report to the  Secretary of Homeland Security and interested congressional  committees.

If you or your staff have any questions about this report, please contact  me at (202) 512-6806 or bawdena@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

Appendix I: Objectives, Scope, and Methodology

This report reviews aspects of the Federal Emergency Management  Agency’s (FEMA) management of the Public Assistance (PA) appeals  process. The objectives of this review were to determine: (1) the extent to  which FEMA ensures quality in its data on appeals and what FEMA data  show about its appeals inventory and timeliness for appeals decisions; (2)  what steps FEMA has taken to improve its management of the appeals  process and what challenges, if any, remain; and (3) the extent to which  FEMA has developed goals and measures to assess the appeal  program’s performance.

To address the first objective, we obtained and analyzed data from FEMA  on all first- and second-level appeals that the agency received between  January 2014 and July 2017. For first-level appeals, FEMA provided us  data on appeals received between January 1, 2014, and July 12, 2017,  while FEMA provided us data on second-level appeals received between  January 1, 2014, and July 6, 2017. We focused on this time frame  because it contained the most complete and available data on each type  of appeal at the time of our review. We identified various discrepancies in  the first-level appeals data, which we discussed with knowledgeable  FEMA staff. Examples of these discrepancies, which we present in this  report, included missing data, erroneous data entries, and inconsistent  recording of data. In response to our discussions, FEMA provided us with  corrected data to address the identified discrepancies. After obtaining the  corrected data, we concluded the appeals data from FEMA were  sufficiently reliable to provide information on PA appeals that we present  in this report. We also obtained and analyzed FEMA policies and  procedures related to tracking appeals data, such as FEMA’s policies and  procedures related to regional offices, and evaluated them using  Standards for Internal Control in the Federal Government.

We analyzed the corrected data to determine FEMA’s appeal inventory— that is, the number of first-and second-level appeals that were pending  and decided, including any amounts in dispute or amounts awarded, and  appeal outcomes for appeals that FEMA decided. From the total number  of appeals received, we excluded four second-level appeals that had  been remanded or rescinded. We determined the processing times for  first- and second-level decided appeals by calculating, for each appeal,  the number of calendar days between the date that FEMA received the  appeal and the date that FEMA rendered a decision on the appeal.

We then calculated the average number of calendar days to determine  average processing times for first- and second-level decided appeals. We  determined the processing time for pending first-level appeals by  calculating, for each appeal, the number of calendar days between the  date FEMA received the appeal and July 12, 2017. Similarly, we  determined the processing time for pending second-level appeals by  calculating, for each appeal, the number of calendar days between the  date FEMA received the appeal and July 6, 2017. We then calculated the  average number of calendar days to determine average processing times  for pending first-and second-level appeals. We compared processing  times for first- and second-level appeals against FEMA’s 90-day statutory  time frame to determine the number of calendar days by which FEMA  exceeded the time frame. We also determined the number of first- and  second-level appeals in which FEMA issued an RFI and those in which  FEMA did not issue an RFI. For the first- and second-level appeals in  which FEMA issued an RFI, we compared the date the appeal was  received to the date that FEMA issued the RFI. We used the first RFI in  cases where FEMA issued multiple RFIs. We then determined whether  FEMA had issued the RFI within 90 calendar days. For the first- and  second-level appeals in which FEMA did not issue an RFI, we compared  the date the appeal was received to the date that FEMA issued a  decision. We then determined whether FEMA had issued a decision after  90 calendar days. We also obtained and analyzed FEMA policies and  procedures and program directives governing appeal data collection and  evaluated them against Standards for Internal Control in the Federal  Government.

To address the first and second objectives, we also administered  semistructured interviews to officials from 3 of FEMA’s 10 regional offices  (Regions II, IV, and VI) with the highest number of first- and second-level  pending appeals. We asked these officials about their efforts to process and track appeals, what improvements had been made regarding how PA  appeals are processed, as well as what challenges they believed  remained in processing PA appeals since 2013.To select these offices,  we obtained data from FEMA on first- and second-level appeals that were  pending a decision, as of October 31, 2016. Collectively, these appeals  represented 69 percent of all pending first- and second-level appeals  FEMA had received as of October 31, 2016. We focused on this time  frame because it contained the most recent data for selecting FEMA  regional offices at the time of our review. To obtain additional perspective  on what, if any, challenges remain in FEMA’s management of the appeals  process, we also interviewed state emergency management officials in  six states (two states in each of the corresponding 3 FEMA regional  offices). (See table 2.)

The information obtained from the FEMA regional offices and the state  emergency management offices cannot be generalized nationwide.  However, the information obtained from these officials provides insight  into the issues FEMA encountered during the appeal process.

To additionally address the second objective, we reviewed our past report  and Department of Homeland Security Inspector General reports on the  PA appeals program. We also reviewed FEMA documentation, such as  policy directives, internal staffing requests, appeals analyst position  descriptions, and other internal memoranda. We used these sources to  identify what steps FEMA had taken to improve its management of the  appeals process since 2013. We also used this information to supplement  our understanding of the challenges the Public Assistance Appeals Board  (PAAB) and regional officials raised during our interviews discussed  above.

To address the third objective, we analyzed a series of FEMA internal  performance reports issued between November 29, 2013, and February  15, 2017. Developed by PAAB and provided to FEMA management on a  quarterly basis, these reports included aggregate information on PA  appeals inventory, such as the number of first- and second-level pending  appeals, the number of appeals processed within statutory timeframes,  the number of pending appeals that are beyond the statutory timeframe,  and common appeal issues based on keywords entered by analysts  responsible for processing appeals. We also analyzed internal  documents, such as briefs and newsletters, which provided detail on  specific appeal decisions as well as the status of the appeals inventory.  Further, we analyzed FEMA’s Strategic Plans for fiscal years 2008 to  2013 and fiscal years 2014 to 2018 to identify objectives, measures, and  overall agency-wide goals. We assessed the information in these  documents against leading practices in measuring agency performance  and against federal standards for internal control.

For all three objectives, we reviewed relevant legislation and FEMA  standard operating procedures that govern both FEMA headquarters and  regional offices. We also interviewed officials in PAAB and FEMA’s  Recovery Directorate.

Appendix II: Comments from the Department of Homeland Security

Appendix III: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Brenda Rabinowitz (Assistant  Director), Anthony Bova (Analyst-in-Charge), Joseph Fread, and Sherrice  Kerns made key contributions to this report. Jehan Chase, Chris Currie,  Robert Gebhart, Chris Keisling, Donna Miller, Kathleen Padulchick,  Amanda Parker, Erik Shive, and Walter Vance also provided assistance.

In both 2016 and 2017, 15 U.S. disasters resulted in losses exceeding $1 billion each. To help recover, state and local governments may apply to FEMA for grants for debris removal, public facility repairs, and similar activities.

Applicants have two chances to appeal grant decisions. However, we found that, from 2014 to July 2017, FEMA processed only 9% of first-level and 11% of second-level appeals within its 90-day limit.

Although FEMA has improved management of the appeals process in the last few years, it still faces challenges. Among other things, we recommended measures to more accurately track appeals and to develop FEMA's workforce.