FEMA’s Woes Were Merely the Beginning

The federal government’s efforts to help victims of Hurricane Katrina have been hobbled by inadequate planning and coordination, troubled computer systems and confusion over who will pay the costs.

Interviews with federal officials indicate that recovery difficulties have gone beyond the Federal Emergency Management Agency and span key agencies in Washington, where top officials are trying to respond to a huge reconstruction problem for which they had no policies or plans. Large contracts are pouring out of agencies, but the task ahead involves issues Washington hasn’t thought seriously about since the 1960s.

Among the danger signals, cited by FEMA and other government officials in interviews:

* Months ago, the Small Business Administration created a data processing system that was meant to revolutionize its delivery of disaster loans. But the system has stumbled badly because there haven’t been enough new computers or staff trained to use them, and the central computers have been strained by the workload.

* Officials at the Department of Education are only now beginning to address questions over who will pay what costs for educating tens of thousands of schoolchildren displaced by Katrina. Meanwhile, school districts inundated with evacuees have had to open shuttered schools and order portable classrooms.

* Federal officials responsible for programs designed to help the poor are tangled in questions about rules that vary from state to state. Families that received welfare in Louisiana, for instance, may not be entitled to payments in Texas, where they have been resettled. And almost everywhere, funds for programs such as Head Start were stretched thin before Katrina hit.

* FEMA has continued to stumble, leaving tractor-trailers packed with ice and water intended for evacuees sitting out of position for days or sending them to places that had no need. And the agency’s rushed efforts to deliver evacuee housing points up a lack of foresight and planning that could have long-term ramifications.

“This is an extraordinary time in our history,” said Mississippi State Supt. of Education Hank M. Bounds. “It will take an extraordinary effort from our leadership. I hope they will grasp the magnitude of the issue.”

Frustration is evident in a message by a middle-level FEMA official, who sent a plaintive cry for help up the chain of command, along with this warning:

“We have now told the state of Texas (and thus all the states) that it may directly pay for evacuees in hotels. For how long? For how much? Does this include food?” his Sept. 7 memo asked. “What I heard was Texas being given carte blanche to run this new program as it sees fit solely on its statement ‘We have controls.’ Do we know what these controls are?

“We are going down the path here of no federal accountability for huge sums of money,” the official warned.

$62.3 Billion to Divvy

About a week after Katrina’s hammer blow to the Gulf Coast, Congress reacted with a $62.3-billion emergency spending bill. The bulk of the money went to FEMA to establish its Disaster Relief Fund, which is to pay for housing assistance; projects by other agencies; property clean-up; and work on roads, bridges and water facilities.

Although the lion’s share is going to individuals and housing assistance, agencies including the Army Corps of Engineers and the departments of Defense, Transportation, and Health and Human Services have been allotted $11 billion.

About $23 billion is earmarked for housing and individual assistance, which is distributed by the Small Business Administration’s Office of Disaster Assistance.

The agency’s new Disaster Credit Management System was intended to revolutionize the handling of disaster relief loans covering uninsured losses and to cut loan processing times from weeks to days. Instead, the new computer system was quickly swamped. Managers scrambled to order new equipment for field inspectors and to reconfigure the central office computers.

“We’ve been pressed into action pretty hard,” said project director Michael Sorrento, who acknowledged that processing Katrina loans may take longer than the agency had envisioned.

The Small Business Administration is expecting to receive more than 1 million applications for loans. There weren’t nearly enough portable units for loan inspectors in the field, and fewer than 100 inspectors had been trained in the new system when Katrina hit.

The agency has had to order extra computers and hire nearly 500 more inspectors, some of whom don’t yet have portable computers.

And those who have made it out into the field have discovered that they can’t always link up from the disaster area to handle new loan applications and file reports on existing ones.

In the central office, near Washington, where staff doubled to 600 and could go as high as 900, training all the new employees strained the central computer system so much that another system had to be found for training.

“There has been some initial slowness in the access” to the system, Sorrento said.

Standing Aid Falters

Assistance programs for the poor that existed before Katrina struck have also faltered. For those seeking welfare payments, administered through Temporary Assistance for Needy Families, results depend on the state the evacuee is staying in.

Some states, including Texas, are using a restrictive interpretation of the rules to deny welfare payments to families that received support in their home states, said the liberal Center on Budget and Policy Priorities.

“It’s very troubling,” said Sharon Parrott, the center’s director of welfare reform. “If this problem doesn’t get cleared up very quickly, families will run through the $2,000 they are being furnished by FEMA and could be left with no source of income assistance. At the moment, it’s a state choice.”

Head Start and child-care programs also face problems. Texas already had 29,000 preschoolers on its Head Start waiting list, and now applications are pouring in from evacuees whose children participated in the program in Louisiana.

“How are they going to be able to take care of the evacuees when they can’t take care of their own people?” asked Helen Blank of the National Women’s Law Center.

The programs, which depend on annual appropriations from Congress, have received none in the supplemental budgets enacted so far. Head Start was able to release $15 million from an emergency fund to temporarily take care of its most pressing needs. But that money will last only a month, and federal child-care support, which has received no funding increase in four years, did not have even that.

“Child-care programs operate on the edge in the best of times,” Blank said.

The hurricane dislodged at least 372,000 children from Gulf Coast schools, according to the Department of Education, and though the hardest blow has fallen on Louisiana and Mississippi, school districts accepting evacuees are also struggling. For example, Texas, which is taking in 60,000 students, estimates it must spend $7,500 per pupil for additional classroom space, desks, textbooks, teachers and supplies.

On Friday, after weeks of suggesting that little or no federal money would be forthcoming, the Education Department announced it would seek $1.9 billion to help meet such expenses.

The department also indicated that it might relax provisions of the federal law known as No Child Left Behind, which mandates that states meet certain reading and math standards or risk losing federal funds.

Mississippi Supt. Bounds, who now oversees 226 closed schools, 30 destroyed schools and more than 125,000 displaced children, had requested that those requirements be suspended for his state this year.

“Frankly, instruction is not the primary mission right now,” Bounds said in an interview. “We want to continue to accelerate learning, but right now we just have to take care of our children, and testing is a long way from my priority right now.”

A Flurry of Activity

In the weeks since Katrina hit, FEMA has shifted into a higher gear, launching projects to provide devastated communities with electrical power, portable classrooms and support for reconstruction, but its critics persist, even pointing to the flurry of action as part of an ongoing problem.

On Sept. 8, officials in Congress estimated that about 450,000 families would need long-term housing. And that day, FEMA began contracting firms to help set up temporary housing facilities across Mississippi, Alabama and Louisiana.

FEMA spokesman James McIntyre, speaking from Baton Rouge, La., said some firms had received $100-million contracts to prepare sites and housing for about 200,000 evacuees.

But Joshua Schwartz, a professor at George Washington University who specializes in government procurement, sees the rushed bidding process as yet another sign of disarray and a lack of preparation.

FEMA routinely negotiates contracts -- set up in advance, usually under competitive bidding and designed to be activated when an emergency hits -- for goods it knows will be needed in the wake of an emergency. These include water, ice, tarps and medical supplies. Schwartz said the fact that FEMA needed to rush contracts through for housing and site work suggested continued flat-footedness.

“I think a creative agency that was doing a good job would have had some arrangements in place, because we do have modular producers and we do have a mobile home industry,” Schwartz said.

“Should FEMA have anticipated vast amounts of emergency housing needs? Yes. If we have a major earthquake in California, we are going to need mass amounts of housing.”

FEMA’s McIntyre said the agency does not normally deal with disasters as large or devastating as Katrina.

Usually, he said, “the housing stock isn’t totally destroyed.... We don’t keep an existing stock for housing. That’s just being reasonable with taxpayer dollars.”

Criticism also continues inside the agency.

“The decision-making is being done by a small inner circle and it’s being done without the input of people who have worked on disasters for years or decades,” said a longtime FEMA official involved with disaster relief.

A second FEMA veteran who is familiar with the agency’s response to previous disasters agreed with that assessment. Both officials spoke on condition of anonymity because they had not received permission to speak to reporters.

As an example of FEMA ad-libbing, one official cited the program to provide 200,000 special debit cards worth $2,000 to evacuees. Homeland Security Secretary Michael Chertoff announced it on Sept. 7; it was canceled Sept. 9.

Similarly, the official said, programs to fly individuals to destinations of their choosing and to reimburse states for sheltering them in hotels remain beset by internal uncertainty.

Meanwhile, on the ground, the long lines for help have left many evacuees frustrated and exhausted.

Gilda Burbank, 60, who fled the Superdome in New Orleans and has been at Houston recovery sites since, said: “Lord, my life is nothing but lines.... Lines to get a debit card from FEMA, lines to get help from the Red Cross, everywhere, lines, lines. We waited in line to get rescued, we waited in line to be brought here, and now we wait in line for everything.”

Silver Linings

Despite the uncertainty and confusion, there are bright spots.

The Department of Health and Human Services has a project underway to create a database of prescription information for about 80% of the people living in the disaster area. Assembled by the department, along with national drugstore chains and prescription plans, it will allow doctors to pull up people’s prescription histories for the last 90 days no matter where the evacuees are.

The new database “will provide doctors who have been authorized with a single Web access point,” department spokesman Bill Hall said.

The Agriculture Department’s nutrition programs -- food stamps and school lunch -- also showed that the government could plan for a crisis and respond well.

“USDA did quite a good job on food stamps and child nutrition,” said James D. Weill, president of the private Food Research and Action Center, an advocacy group that more often finds itself at loggerheads with the department.

Times staff writers Mark Mazzetti, Joel Havemann and Tony Perry also contributed to this report.