Internal Audit Views FEMA as Albatross for Homeland Security

Weaknesses in FEMA’s response system during Hurricane Katrina were but one indicator of major management challenges at the Department of Homeland Security, an internal report issued Wednesday concludes.

The report by the department’s inspector general, Richard L. Skinner, also questions Homeland Security’s ability to properly oversee billions of dollars worth of contracts it awards annually.

The findings were part of an audit by Skinner’s office, which must assess Homeland Security’s management challenges each year.

The report was issued as the 3-year-old department struggles to revamp its programs and resources based on risk.

The Federal Emergency Management Agency, an arm of Homeland Security, was singled out by investigators who pointed to the agency’s “overburdened resources and infrastructure” in dealing with the double-whammy of hurricanes Katrina and Rita.

Investigators found that these key FEMA programs remained inadequate: distributing aid to disaster victims, emergency response information systems, modernizing flood maps, and managing contracts and grants.

“Based on our work related to prior emergency response efforts, we have raised concerns regarding weaknesses” within those programs, the report said.

Moreover, “when one considers that FEMA’s programs are largely administered through grants and contracts, the circumstances created by hurricanes Katrina and Rita provide an unprecedented opportunity for fraud, waste and abuse,” the report said.

“While DHS is taking several steps to manage and control spending under Katrina, the sheer size of the response and recovery efforts will create an unprecedented need for oversight.”

Katrina slammed into the Gulf Coast on Aug. 29, followed by Rita on Sept. 24.

Department officials responded to the report with an 11-page point-by-point analysis, acknowledging and explaining shortcomings in some areas and defending actions in others.

Homeland Security spokesman Russ Knocke said Wednesday that the department was working to make programs more efficient and effective. He also called changes to FEMA “one of our greatest and most urgent priorities.”

“The American public will be hearing from us, in short order, about how we intend to build the capability of FEMA into a 21st century agency, focusing on the agency’s core response and recovery mission,” Knocke said.

As of last week, the most recent data available, Homeland Security had awarded $4.1 billion in Katrina-related contracts -- mostly for construction and housing.

By comparison, the department awarded about $10 billion in contracts on all projects last year, the audit found.

In its response, the department said it had created an office to manage the hurricane contracts process, and had brought in outside advisors to help.