Summary: GAO discussed the results of some of its recent reviews of Federal disaster assistance administered by the Federal Emergency Management Agency (FEMA). GAO has found that congressional action is needed to clarify the Disaster Relief Act. Some of these actions are addressed in S. 2250. For example, GAO recommended that Congress clarify the extent to which State and local contributions should be committed, and S. 2250 would limit Federal contributions to 75 percent of net eligible costs, which would allow for a lesser Federal contribution where a State is capable of paying more than a 25-percent share. GAO believes that FEMA should continue to evaluate each recipient's capability to handle its own disaster relief needs and limit the Federal contribution accordingly. The President should be authorized to lend or advance the State's share, or any part of it, to allow States to advance some portion of their share out of immediately available resources. A provision for interest on outstanding State obligations should encourage prompt repayment by the States. GAO also suggested that the President be authorized to relieve a State of its obligation when repayment would impose an undue burden. S. 2250 is consistent with a GAO recommendation that Congress reevaluate the Act and clarify its intent regarding the coverage of non-natural disasters. However, Congress has not addressed inequities in the Act, pointed out by GAO, which unfairly penalize or reward States applying for Federal snow removal reimbursements. GAO also believes that fundamental changes are needed to streamline the system for delivering disaster assistance. S. 2250 would amend the Act to permit FEMA to make contributions on small projects based on the Federal estimate of net eligible costs. However, Congress should progress toward a system which permits State and local applicants to exercise more discretion in the allocation of disaster relief funds, such as a lump sum delivery system. GAO supports a section of S. 2250 which would provide for the denial of assistance by the President to the extent that damage could have been compensated by flood insurance. GAO also supports a proposed provision which would give FEMA the legal authority to participate in hazard mitigation measures on a 50-50 basis with State or local communities.
