Summary: GAO discussed Federal assistance to States and local communities administered by the Federal Emergency Management Agency (FEMA) and offered comments on amendments to the Disaster Relief Act. Actions taken by FEMA have raised concern over whether it has altered the scope of the Act, including: (1) establishing a cost sharing program between the Federal Government and the State and local governments to provide for disaster assistance; and (2) making available funds for non-natural disasters. FEMA adopted a policy which requires State and local governments to pay 25 percent of the costs of the public assistance portion of disaster relief provided by the Federal Government. State officials contend that it forces them to pay for costs which are beyond their capability or which will consume an unreasonable amount of State and local funds. GAO has recommended that Congress clarify the extent of State and local contributions that should be committed before supplemental Federal assistance is provided. Since the Act is not clear on whether non-natural catastrophes are within the purview of existing law, GAO has suggested that Congress reevaluate the Act and clarify its intent regarding the extent to which Federal assistance should be given in a major disaster and the types of incidents that may receive disaster assistance. GAO believes that FEMA needs to: (1) improve its system for delivering disaster assistance; and (2) change its reimbursement practice for the reconstruction or repair of structures that were not insured. As a condition for receiving Federal assistance, the Act should be amended to require that State and local governments purchase the appropriate hazard and flood insurance to protect themselves against the loss of public facilities and equipment.
