Final Memorandum on the Audit of Federal Emerency Management Agency Mission Assignments for Hurricane Katrina Disaster Relief
TO: Chief Financial Officer
FROM: Assistant Inspector General for Auditing
SUBJECT: Final Memorandum on the Audit of Federal Emergency Management Agency Mission Assignments for Hurricane Katrina Disaster Relief (Report No. IG-07- 01 8; Assignment No. A-05-030-02)
The Office of Inspector General (OIG) has completed an audit of the Federal Emergency Management Agency (FEMA) mission assignments for Hurricane Katrina disaster relief. The President’s Council on Integrity and Efficiency (PCIE) Homeland Security Roundtable was established to coordinate reviews from Offices of Inspector General auditing Federal relief efforts in the aftermath of Hurricane Katrina. In conjunction with the PCIE, NASA OIG reviewed NASA’s Hurricane Katrina relief efforts. In two prior reports1 we addressed NASA’s emergency preparedness plans and its processes for estimating and expending direct costs related to Hurricane Katrina relief efforts. This report focused on NASA’s accounting for reimbursable costs for Hurricane Katrina disaster relief efforts authorized by FEMA. We reviewed NASA’s accounting for FEMA funding authorizations totaling $541,500 for four reimbursable mission assignments. 2 We also reviewed NASA’s accounting for funds related to a $12.6 million FEMA funding authorization to NASA for an interagency agreement. (See Enclosure 1 for details on the audit’s scope and methodology.)
Executive Summary
We found that NASA had properly accounted for funding related to the $12.6 million interagency agreement. NASA also properly accounted for one of the reimbursable mission assignments that incurred costs. One reimbursable mission assignment did not incur any costs and was closed. For the two remaining mission assignments that incurred costs, those costs were improperly accounted for as direct costs. Also, the mission assignments’ costs were not separately tracked and were allowed to exceed the funding authorization amount. This occurred primarily because Headquarters personnel did not follow NASA’s guidance for establishing separate work breakdown structure (WBS) codes3 for reimbursable projects. Instead, Headquarters personnel followed NASA guidance for tracking direct costs for Hurricane Katrina efforts. In addition, NASA did not provide monthly progress reports, as required by FEMA, until September 2006. Stennis and Headquarters personnel did not comply with FEMA’s guidance because they were unfamiliar with FEMA mission assignment requirements and had difficulty coordinating with FEMA points of contact. As a result, NASA lost visibility over the costs for two of the reimbursable mission assignments and exceeded the FEMA funding authority by approximately $1.7 million. NASA sought and obtained reimbursement of $1.3 million after this office inquired as to the accounting for the funding for mission assignments. However, NASA could not provide separated costs to recoup the remaining $700,000 for these two mission assignments prior to expiration of FY 2005 funds. Hence, these funds were unavailable to support Space Shuttle Program requirements.
In our May 14, 2007, draft of this memorandum, we recommended that the Chief Financial Officer ensure that Headquarters Project Officers use reimbursable project WBS codes to account for cost incurred in support of FEMA mission assignments, rather than direct cost codes. We also recommended that the Chief Financial Officer ensure Headquarters and Center Project Officers are aware of and comply with FEMA’s mission assignment requirements to provide monthly progress reports that include cost and billing data.
Management concurred with both recommendations and their planned actions are responsive (see Enclosure 2). The recommendations are resolved and will be closed upon completion and verification of management’s corrective action.
1 NASA Office of Inspector General. “NASA’s Implementation of the National Incident Management System” (IG-06-016, August 29,2006); and “Audit of the Management of Hurricane Katrina Disaster Relief Efforts” (ML-06-009, August 29,2006).
2 A mission assignment is a work order used by FEMA to support Federal operations in the event of a Stafford Act major disaster declaration. It orders immediate, short-term emergency response assistance when an applicable state or local government is overwhelmed by the event and lacks the capability to perform, or contract for, necessary recovery work.
3 A WBS project code is used to track project costs. A WBS code can be divided into different levels that can be used to identify reimbursable projects.
