Disaster Recovery

n April, Rep. Jerrold Nadler, D-N.Y., who represents the district where terrorists struck the World Trade Center, said his office had been "overwhelmed with complaints" from people denied aid by the Federal Emergency Management Agency. Two months later, Rep. Carolyn Maloney, D-N.Y., who represents the New York suburb of Garden City, accused FEMA of not doing enough to help New Yorkers laid off after the Sept. 11 attacks, blaming "red tape, exclusionary eligibility standards and bureaucratic roadblocks." FEMA hadn't heard so much pointed criticism from Congress in years.

During the Clinton administration, under Director James Lee Witt, FEMA routinely won the praise of lawmakers for its efficiency and customer service. Witt won kudos by responding to natural disasters while moving FEMA away from its Cold War mission of preparing for nuclear war. But on Sept. 11, FEMA's challenge was completely recast. What followed was a sometimes rocky adjustment. FEMA had never before dealt with a disaster as complex and expensive as the aftermath of the terrorist attacks. If estimates hold up, FEMA will spend $9 billion on its relief efforts in New York alone, $2 billion more than it spent on its previous high mark, California's 1994 Northridge Earthquake.

"After Sept. 11, this agency was called to perform a Herculean task," says current FEMA Director Joe Allbaugh, a top aide to President Bush while Bush was governor of Texas and the manager of the president's election campaign in 2000. "This was a much larger tragedy than anyone could have foreseen or planned for. But I'm proud of the job that everyone has done. Does that mean there were no glitches along the way? No, we've had some, but we've tried to respond and deal with them in a responsible fashion."

There never was any doubt that FEMA had a major role to play in helping search for victims of the terrorist attacks, removing the rubble of the trade center towers, and helping the government and individuals directly affected. But one of the critical questions raised, particularly by Maloney and Nadler, was how generous the federal government should be in helping those hurt by the economic fallout that followed the attacks. FEMA is "seeing a whole new dimension to the meaning of disaster," says Rutherford Platt, professor of emergency management at the University of Massachusetts at Amherst. "The agency is almost an open-ended black hole for federal assistance. . . . Where does one draw the line?"

And that isn't the only question that Sept. 11 raised for FEMA managers, particularly with the president's dramatic move to increase the agency's budget, move it into the new Homeland Security Department, and make it the principle grant-giving agency for local first responders. FEMA's mission is growing rapidly. The agency will hand out billions to state and local agencies to help them prepare for terrorist attacks-and must make sure the money is well spent. It will have to adjust its own standards for handing out relief dollars to governments, businesses and individuals to reflect the deep economic impact of terrorist attacks, while also weeding out fraudulent claims. And, it will have to do everything it has always done to respond to natural disasters. Allbaugh and his team say FEMA is up to the job. But some critics of FEMA's performance in New York aren't so sure.

RESPONDING TO SEPT. 11

On Sept. 11, FEMA responded in the fashion it had perfected during the Clinton years. It activated the "Federal Response Plan," thereby becoming the coordinator for the relief efforts of 28 federal agencies and the American Red Cross. Allbaugh deployed eight urban search-and-rescue teams to New York, some with engineers and specially trained dogs. Four teams went to the Pentagon. Medical teams were called up in Washington and New York. FEMA charged the Army Corps of Engineers with removing debris. Citizens were urged to give blood and cash donations.

In the following days, FEMA deployed more than 2,000 federal workers to New York, and opened a disaster field office to coordinate federal, state and local efforts. Shelters were opened, mental health workers enlisted, and power generators brought to lower Manhattan. Call centers were set up to respond to victims and to determine whether they were eligible for federal or social service relief programs. And when it came time to remove the remains of the towers, FEMA picked up the bill. Allbaugh expects that FEMA will have "a presence in New York for years to come."

It was an effort unprecedented in American history. The costs were extraordinary: $2.75 billion to repair transportation infrastructure, $437 million to remove debris, and $400 million to pay for overtime. By most accounts, FEMA did an efficient job. FEMA Deputy Director Michael Brown says the removal of debris came in "under budget and ahead of schedule." Thomas Von Essen, commissioner of the New York Fire Department at the time of the attacks, puts it simply: "I cannot say enough about the help we received last fall from Joe Allbaugh and all of FEMA. New York City needed help and FEMA delivered."

FEMA's work won praise in Congress, and President Bush proposed that the agency be given $3.5 billion to help local responders prepare for terrorist attacks, a more than 10-fold increase in the FEMA budget for such grants. Then, when Bush proposed that a new Homeland Security Department be created, he designated FEMA the federal government's lead agency in training local responders.

But at the same time, FEMA's work in New York was coming under scrutiny by New York's private relief organizations and the news media. An April story in The New York Times revealed that FEMA had "doled out less than $65 million to help needy families in the disaster area." That figure, the article noted, was far less than what FEMA had provided during past disasters. The problem was not with FEMA's efforts at ground zero, searching for victims and removing debris. Rather, FEMA had failed to coordinate its efforts with those of the many charities that had rushed to the scene to provide financial aid to victims. Ultimately, many charitable donations went to people who also were eligible for federal relief.

Meanwhile, the Times reported, FEMA had-in a cost-saving move-raised its standard for helping individual victims. FEMA never has paid workers for lost income that results from a disaster, but the agency does have a program to aid people in danger of losing their homes because of lost income. More than 30,000 New Yorkers inquired about the program in the first six months after the attacks. But by April, the agency had provided aid to only a small fraction of them, turning down thousands because agency officials deemed their hardships not to be a "direct result" of the attacks.

In addition, FEMA failed to provide applications for mortgage and rental assistance in any language but English, making things difficult for non-native English-speakers, and provided 15,000 people seeking help with flawed application forms, the Times added. Many New Yorkers didn't even know that aid from FEMA was available, though FEMA worked with the New York-based Ad Council and the advertising agency Mezzina Brown & Partners to spread the word about available assistance.

Before Sept. 11, FEMA rarely had used the housing assistance program. In its history, the agency had distributed only $11.7 million in mortgage and rental aid, and agency officials had no guidelines to help them distinguish which job losses resulted directly from the attacks versus jobs lost in the subsequent economic downturn. Opening up the program to more people was popular in New York, but without close scrutiny, the potential for fraud was clear. And groups such as Citizens Against Government Waste, a Washington interest group, have criticized FEMA for giving New York federal funds for projects unrelated to the attacks. The group was particularly irked by one FEMA-approved plan, since withdrawn, to help New York build two new subway station exits in lower Manhattan.

New Yorkers see it differently. "The problem was that FEMA's programs are structured to help people with physical damage to their home or their business," says Benjamin Ross, disaster relief coordinator for the New York Immigration Coalition, a nonprofit organization that advocates for immigrants and refugees that has been closely monitoring FEMA. "But in this densely populated city, with an integrated economy, the problems went beyond a 20-block radius."

Initially, FEMA had refused to consider applicants outside lower Manhattan, Ross says, although some studies estimate that as many as 100,000 New Yorkers throughout the city lost jobs because of the attacks. In May, representatives of the coalition met with FEMA Deputy Director Brown in Washington. "What he seemed to be concerned about was how it would set a precedent if they expanded the program to everyone who was economically impacted," says Ross. "He was worried about getting claims from a taxi driver in Cincinnati who said he'd lost business. But I said workers in midtown Manhattan whose employers say they were laid off because of the attacks aren't getting aid."

Brown says FEMA was hamstrung by statutory limits on the mortgage and rental assistance program. He says the program was designed purely to take care of workers who'd lost jobs because their workplaces had been destroyed. "In New York, we didn't have that. We had this economic impact that extended beyond ground zero, and that the program simply wasn't designed for," he says. Allbaugh adds that many FEMA programs "simply were not capable of responding in the way we needed to respond in New York City. We've pushed the envelope on these-which were narrowly defined-and made them more expansive." And in that, he's won the support of Congress.

In late June, FEMA changed its tune on the mortgage and rental assistance program. The agency expanded its guidelines to include workers from all of Manhattan. And it promised to review all applications for assistance it previously had rejected. The harsh criticism from Congress faded. FEMA's quick turnaround "is the way federal agencies should respond when it seems they might have acted wrongly," Nadler said.

In Ross' mind, the plan still has flaws. For example, airport workers who lost jobs after Sept. 11 and live in Manhattan might now win assistance, but their co-workers from Brooklyn or Hoboken would not be eligible. Nonetheless, Jack Krauskorpf, who serves as chief program officer for a consortium of the charities working on 9/11 relief, says the housing program is "beginning now to reach some of the people it needs to reach."

STAYING FOCUSED

Since Bush first proposed placing FEMA in the new Homeland Security Department, Congress has been concerned that the agency might be unable to maintain its focus on natural disasters while taking on far greater responsibilities preparing for terrorist attacks. Former Director Witt, for one, is opposed to moving FEMA wholesale into the department. Local emergency management officials also are concerned, but thus far, FEMA has continued to win high marks for its response to natural calamities.

On July 1, for example, Nueces County, Texas, was hit with severe storms and flooding. More than 300 houses were under water for periods ranging from 10 days to three weeks. On July 4, Bush declared the region a disaster area. FEMA began cutting checks to victims within two days, says county spokesman Chris Lawrence.

As a result, most local emergency management officials are taking a wait-and-see approach to the unfolding debate over FEMA's role in the new Homeland Security Department, while FEMA officials insist that FEMA must remain intact as an "all-hazards" agency. "We're moving lock, stock, and barrel as we should," says Allbaugh, adding that the agency must respond to natural disasters and prepare for future disasters, including more terrorist attacks. "For that to be unhooked from what we do with first responders just doesn't make sense."

FEMA's response mechanisms are the same, no matter the cause of a calamity. "If there had been a major earthquake that brought the World Trade Center down . . . FEMA's response would be exactly the same," adds Brown. "All we do is act like the conductor to bring in the different pieces to respond properly, and we're going to bring that culture into Homeland Security."

Less popular among local emergency managers were Allbaugh's plans early in his tenure to cut back on government funding for disasters and to tighten the guidelines for federal disaster declarations. Allbaugh says those plans fell by the wayside after Sept. 11. The one remaining point in dispute is whether FEMA will continue to pay for post-disaster mitigation. The president proposed cutting such funding from his 2003 budget. But state emergency managers say it's necessary.

On the whole, FEMA wins praise for encouraging local emergency managers to take on such efforts. "Mitigation is a word most of us couldn't spell 15 years ago," says Dale Shipley, Ohio's emergency management director. "I now have five people working solely on mitigation." And local officials strongly believe FEMA-sponsored mitigation programs have prevented subsequent disasters.

FEMA's training programs for local first responders also receive near-universal praise. Most say that the FEMA-run Emergency Management Institute in Emmitsburg, Md., long has provided excellent training to first responders, and lately has expanded its curriculum to deal more extensively with terrorist threats. FEMA's leaders clearly are thinking hard about the lessons of Sept. 11. Brown says the agency will use its new funding to train local police and fire departments and the agency's urban search and rescue teams on how to handle chemical, biological and nuclear attacks. He says the agency will seek to ensure that local agencies update outdated mutual aid agreements, and that first responders in different jurisdictions have equipment that works with that of other agencies. "It's amazing to me in this day and age that we still have problems with bandwidth and getting radios to talk to one another," says Brown. "It's amazing to me that in this country we have fire departments that can't make their hoses fit together."

FEMA already is helping local agencies analyze their vulnerabilities and will be ready when the flood of applications for grants arrives, says Brown. "What we don't want to do is be put in a position where money is just going out the door and there is really no accountability to see that this money is really going to solve a vulnerability at the state and local level. If it's not doing that, we are wasting the taxpayer's dollar."

GETTING ITS HOUSE IN ORDER

With billions slated to flow into FEMA's coffers, the agency is pushing hard to get its financial and property management systems ready. Chief Financial Officer Matt Jadacki says FEMA has made steady progress.

In his most recent report, which covers Oct. 1, 2001, to March 31, 2002, FEMA Inspector General George Opfer reported that the agency was "in substantial noncompliance" with the requirements of the 1996 Federal Financial Management Improvement Act, that the agency lacked a fully integrated financial management system, that its principle computer systems were easily accessed by unapproved visitors, and that FEMA lacked "sufficient human resources and sufficiently trained financial management personnel to adequately perform its financial reconciliations." The result, the IG said, was that FEMA could not report "accurate, reliable and timely financial data."

That's all changed in the seven months since the IG's report, Jadacki says. In response to the report, the agency put together a remediation plan that Jadacki says "addressed every single one of the concerns." Now, he says, the agency's financial management personnel are tracking each problem area "on a week by week basis" to ensure FEMA's compliance. The agency contracted with consulting firm Grant Thornton to revamp its financial management system, and launched a new version in August. Meanwhile, the facilities management office is doing a "complete top-to-bottom, floor-to-book, book-to-floor inventory" of agency property, Jadacki says. His plan appears to be working. The Office of Management and Budget recently noted the agency had made progress on the White House financial management evaluation scale.

Some of the credit for the turnaround also goes to FEMA's information technology staff, which now controls the technical side of the agency's National Emergency Management Information System. The IT staff implemented changes in the system to make it compliant with the Joint Financial Management Improvement Program, an effort launched by the Treasury Department, the General Accounting Office, the Office of Management and Budget, and the Office of Personnel Management to improve financial management in the federal government.

The IT staff has also set up a "transformation office" that aims to ensure that FEMA shows a return on its technology investments and that project managers are held accountable for adhering to cost schedules, says Chief Information Officer Rose Parkes. The agency also has set up an office of cybersecurity to stop unwanted visits to its systems, and is preparing to put in place a regular "replace-and-refresh" cycle for its desktop computers. The agency has received the most kudos for its use of wireless technology at its disaster field offices, which has shortened set-up time from three days to less than one.

Still, FEMA has not yet met the challenge of the 1993 Government Perform-ance and Results Act. In his report, the IG found that FEMA had established measurable performance goals and used accurate performance data to report its achievements in its annual performance report, but added, "FEMA has not adopted performance-based management as a useful management tool." Brown says the agency's leaders have made it clear that they expect managers to do better. "We've sat down with all the assistant directors, and I guess, to put it politely, we've encouraged them to do so," he says.

On the human resources front, FEMA's American Federation of Government Employees representatives share the concerns of other unions at agencies destined for the Homeland Security Department about the possibility of losing bargaining rights. But FEMA employees generally like their work and find it rewarding, according to a recent study done by consulting firm Booz Allen Hamilton. FEMA commissioned the study as it prepared its five-year strategic plan. The one dark note was that FEMA employees in general felt that their managers hadn't had adequate training.

At a Senate hearing in March, Allbaugh acknowledged that the agency had not been "spending enough time internally on our employees, properly training them, helping them with their career path. Retention was a problem.... There was essentially no recruitment." Close to 50 percent of agency employees are eligible for retirement over the next year, he added. To help him deal with the problem, Allbaugh last February hired Douglas Fehrer from the Office of Personnel Management to become FEMA's director of human resources. Allbaugh set Fehrer to work on establishing a training and recruitment program. Allbaugh says FEMA has made progress on human resources problems, but he's "not satisfied that we've accomplished our goal." Congress did provide the agency with money to provide retention bonuses this year, and that will help, he says.

CREDIBILITY ON THE LINE

Though management challenges remain, the agency's leaders say that Sept. 11 has been a catalyst that is helping them hone their skills and boost agency efficiency. "FEMA is getting a lot more money, and our credibility is on the line," Jadacki says. The added stress has led to turnover, but it also has provided new purpose. Adds Brown: "FEMA has had since its inception this philosophy among employees that they are there to serve.... In the employees' minds, Sept. 11 caused them to become more focused. They realized how important the mission of this agency is."

Whether FEMA can keep its focus in the new Homeland Security Department remains to be seen. Witt is skeptical, arguing that the agency's partnerships with local and state governments could suffer, and that the agency's funding is already stretched too thin. He argues that the agency should be split, with only a terrorism response unit going to the new department.

But local first responders are behind the plan. Ohio emergency manager Shipley says FEMA belongs in the new department. "You can't make an artificial distinction as to why a building comes down. The same guy is going to roll to the scene when the accident occurs," he says. For years, Shipley says, local emergency managers who rely on myriad sources of federal funding have "begged for a single point of contact." FEMA is becoming that one-stop shop, but that doesn't mean local responders aren't continuing to watch Congress like hawks. Says Bob Andrews, president of the International Association of Emergency Managers: "We don't want to see funding taken away from natural disaster recovery programs."