Detailed Information on the
Federal Emergency Management Agency - Mitigation Programs Assessment

Increase hazard risk awareness through outreach and improved information quality, such as by modernizing flood maps to improve accuracy and availability to the at-risk public. Action ongoing. As of FY07 60% of the US population has flood risk data in a GIS format and 61% of the population is covered by local hazard mitigation plans; the program achieved its goal for each of these measures in FY07. In addition the program has achieved its annual goal for having 78% of the nations stream miles meeting the quality standard, the 2005 flood plain boundary standard. Accomplishment of these metrics and future FYHSP targets demonstrates improved hazard risk awareness and information quality for products delivered to the public.

Implementing the Severe Repetitive Loss (SRL) Pilot program; Major steps include: 1) publish regulations; 2) publish guidance; 3) train regional and state partners; 4) open application perios; and 5) award funds. The SRL regulation was published on 10/31/07 as an interim final rule. The regulation will be effective on 12/3/07; however the comment period remains open for 60 days (through 12/31/07). Mitigation is currently briefing appropriate FEMA and DHS offices on the accompanying SRL guidance. MT expects to publish guidance in December 2007, when we will also formally open the SRL application period. Mitigation is currently implementing an aggressive SRL training and outreach effort. All 10 Regions were trained the week of 11/26/07. All training for the 17 states with the highest number of SRL properties is scheduled between 12/3 - 12/21. This represents 95 Percent of SRL properties, by State, trained in SRL program. FEMA will award funds in FY08.

Continuing to evaluate mitigation programs using performance data and independent assessments. Programs should also review lessons from Hurricane Katrina, including flood insurance program changes.

Measure: Over the period 2007-2011, reduce potential costs from loss of life and property by $10.5 billion.

Explanation:Mitigation strives to reduce disaster losses by changing physical conditions and behaviors to protect lives and prevent property damage. Two components contribute to this measure: the future losses avoided from the National Flood Insurance Program's floodplain management activities; and the losses avoided by mitigation projects funded through grant programs. The baseline established in FY 2002 ($1.102B) reflects only the NFIP component. In FY 2004, loss reduction from grant programs are also included.

Measure: By 2010, make flood risk data in Geographical Information Systems format available to 100% of the population.

Explanation:Currently, most flood data is available on paper maps. Flood risk data is used 30 million times per year by communities to enforce floodplain management regulations, by lenders to determine which properties require flood insurance, by insurance agents to rate flood insurance policies, and many others to determine flood risk. The improved floodplain boundaries and modernized format of the data will improve its usability and customer access to the data.

Measure: Annual increase in the number of communities that develop or expand hazard mitigation plans to reduce their natural or man-made disaster risk.

Explanation:One of the Mitigation Program's strategies is to change behavior to reduce risk from hazards. Local and state jurisdictions develop hazard mitigation plans, as well as make decisions about how to permit new development (e.g., floodplain management regulations and building code decisions) jurisdictions. The targets for this measure are higher in 2004-2005 due to the impacts of the Disaster Mitigation Act of 2000, which required State and local hazard mitigation plans to be in place as a condition of receiving hazard mitigation grant funding. The targets in the outyears reflect maintenance of the hazard mitigation plans, and other community actions related to the National Flood Insurance Program (NFIP) and to hazard mitigation grant projects. Under the Community Rating System (CRS), flood insurance premium rates are adjusted to reflect the reduced flood risk resulting from community activities that meet the three goals of the CRS: 1) reduce flood losses; 2) facilitate accurate insurance rating 3) promote awareness of flood insurance.

Measure: Improve the National Flood Insurance Program income to expense ratio which measures the operating efficiency of the NFIP.

Explanation:The National Flood Insurance Program (NFIP)tracks fiscal soundness and efficiency annually by measuring income to operating expenses and historical loss levels. This ensures that the program performs efficiently to keep premium rates more affordable and to reinforce community participation. In addition, all of the major NFIP contracts are performance-based and contain standards for performance, a surveillance method, and incentives or disincentives, as appropriate. The Writer Your Own (WYO) Arrangement with private insurance company partners providing insurance to cover flood losses contains specific standards for processing insurance applications and for paying claims. The baseline is 112.4% , established in 2001.

Measure: Annual average increase in number of flood insurance policies.

Explanation:Several GAO reports have indicated that the NFIP should improve participation rates of individuals located in the floodplain. Many property owners at high risk are not insured and are at risk of financial loss die to flooding. Increasing the number of flood insurance policies will result in additional property owners being covered from flood losses. A performance-based contract was initiated in 2003 to achieve this measure beginning in 2005.

Is the program purpose clear?

Explanation: The purpose of the Mitigation Program is to reduce or eliminate long-term risk to people and property from hazards and their effects. This is accomplished through process, project, and insurance activities. Process activities include efforts to assess hazards, vulnerability, and risk as well as planning efforts to identify projects, policies, and practices and set priorities. Project mitigation activities include projects to elevate, acquire, and/or relocate buildings, lifelines, and other structures threatened by floods, strengthen building and lifelines to resist earthquake or wind forces; and improve drainage and land conditions. Flood insurance is made available as an economic backstop to cover the risk that remains, and to reduce Federal expenditures for disaster assistance. The Mitigation Program's intent is to strengthen nationwide preparedness and mitigation against acts of terrorism, natural disaster, or other emergencies.

Evidence: DHS Future Years Homeland Security Program; FEMA Strategic Plan 2003-2008. Natl. Historic Preservation Act of 1966; Natl. Flood Insurance Act of 1968; Natl. Env. Policy Act of 1969; Flood Disaster Protection Act of 1973; Earthquake Hazards Reduction Act of 1977; Natl. Flood Insurance Reform Act of 1994; Robert T. Stafford Disaster Relief & Emergency Assistance Act, P.L. 93-288; Disaster Mitigation Act of 2000; Natl. Dam Safety and Security Act of 2002, P.L. 107-310; Flood Insurance Reform Act of 2004, P.L 108-264; 42 U.S.C. 7701-7706; E.O. 12941, Seismic Safety of Existing Federally Owned or Leased Buildings; E.O. 12699, Seismic Safety of Federal and Federally Assisted or Regulated New Building Construction; E.O. 12148 FEMA, Section 4-203; E.O. 12127 FEMA, Section 1-104; E.O. 11990, Protection of Wetlands; E.O. 11988, Floodplain Management.

Does the program address a specific and existing problem, interest, or need?

Explanation: All parts of the nation are vulnerable to natural hazards including earthquakes, floods, tornadoes, hurricanes, and terrorist attacks. Many people build, live and work in areas at particular risk. Flooding is the most common disaster in the U.S.; yet, private insurance industry does not provide affordable flood insurance due to the catastrophic nature of the flood hazard. The National Flood Insurance Program (NFIP) was created to address this problem and provide an alternative to direct Federal disaster assistance. Grant programs provide financial resources to mitigate existing structures from future disaster losses. Federal disaster assistance costs billions of dollars annually - between 1989 and 1993, average annual FEMA disaster relief fund obligations totaled $1.6B (1998 dollars), and average annual obligations for 1994-1998 increased to $2.5B annually (1998 dollars). Need for the program was demonstrated during the Pre-Disaster Mitigation Grant Program 2005 application process - the value of the projects submitted was more than twice the amount of funding available.

Evidence: "Section 502(3) of the Homeland Security Act of 2002, Pub. L. No. 107-296; National Flood Insurance Act of 1968; the GAO has concluded that insurance is the most efficient and equitable method of providing disaster assistance, GAO Report, PAD-80-39; see weather-related disasters data from 1980- 2004: National Oceanic and Atmospheric Administration National Climatic Data Center - January 12, 2005. GAO-99-106 Disaster Assistance: Information on the Cost-Effectiveness of Hazard Mitigation Projects; Senate Committee on Banking and Currency Report: Insurance and other Programs for Financial Assistance to Flood Victims, September 1996; Study of the Economic Effects of Charging Actuarially Based Premium Rates for Pre-FIRM Structures, May 14, 1999; GAO-99-106 Disaster Assistance: Information on the Cost-Effectiveness of Hazard Mitigation Projects; Senate Committee on Banking and Currency Report: Insurance and other Programs for Financial Assistance to Flood Victims, September 1996; Flood Disaster Protection Act of 1973; website providing limited information on insured losses from disasters: www.environmenttimes.net/article.cfm?pageID=146."

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The National Flood Insurance Program (NFIP) does not compete with any other government program and serves individuals who are not served by private insurers who are reluctant to offer flood insurance due to the catastrophic nature and cost of floods. A community must adopt and enforce a floodplain management ordinance to reduce future flood risk for new construction in floodplains before the Federal Government will make flood insurance available. State and local entities do not influence communities in this systematic way, nor does any other entitiy provide flood hazard data for the Nation. The Mitgation grants programs provide funds for planning and to minimize future losses to existing structures. There are no other similar programs at the federal, state, or local levels.

Evidence: Robert T. Stafford Disaster Relief & Emergency Assistance Act, P.L. 93-288; E.O. 12148 FEMA, Section 4-203; GAO Report, PAD-80-39: the GAO concluded insurance is the most efficient and equitable method of providing disaster assistance; "Insurance and Other Programs for Financial Assistance to Flood Victims", Senate Committee on Banking and Currency, September 1966 - report submitted by Secretary of HUD to Senate Banking Committee, describes need and rationale for a program to provide financial assistance to flood victims. Concluded flood insurance provided most workable solution and due to variability of flood losses, private sector was unwilling to assume risk without government assistance; FEMA Mitigation flood insurance and grant programs websites; OMB Circular A-16, Coordination of Surveying, Mapping, and Related Spatial Data Activities; Earthquake Hazards Reduction Act of 1977; E.O. 12941, Seismic Safety of Existing Federally Owned or Leased Buildings; E.O. 12699, Seismic Safety of Federal and Federally Assisted or Regulated New Building Construction; National Dam Safety Program Act, Section 215 of P.L. 104-303; Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004; Natl. Flood Insurance Reform Act of 1994; Robert T. Stafford Disaster Relief & Emergency Assistance Act, P.L. 93-288; Documentation (independent) shows value of $ spent on Mitigation: Study of the Economic Effects of Charging Actuarially Based Premium Rates for Pre-FIRM Structures, May 14, 1999. Natl. Flood Insurance: Issues Assessment (A Report to the Federal Insurance Administration), January 31, 1999.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The program design is generally free of design flaws that limit its effectiveness. FEMA Mitigation programs provide resources to mitigate existing and future hazards and a mechanism for citizens to insure against flood risks. The synergy of the NFIP's design, which links risk identification, risk reduction, and insurance, has had a significant impact on reducing the Nation's flood losses and making flood insurance affordable. However, repetitive losses, on properties built before the adoption of NFIP floodplain management requirements, have been a significant drain on the program. The NFIP is addressing this problem through mitigation actions, natural attrition, and rigorous floodplain management. Repetitive loss properties, which have historically accounted for 38 percent of all losses paid, are now less than 25 percent of annual losses, but further program design changes may be needed to better address this ongoing problem. Mitigation grant programs are designed to address both pre- and post-disaster environments, which maximizes opportunities for mitigation projects.

Evidence: GAO-04-417 Flood Map Modernization: Program Strategy Shows Promise, but Challenges Remain; GAO-04-401T NFIP: Actions To Address Repetitive Loss Properties; GAO Report, PAD-80-39: The GAO has concluded that insurance is the most efficient and equitable method of providing disaster assistance; Study of the Economic Effects of Charging Actuarially Based Premium Rates for PRE-FIRM Structures, PricewaterhouseCoopers, 1999; National Flood Insurance Reform Act of 1994.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The FEMA Mitigation program strategically targets people and property at risk through risk identification (knowing where hazards occur) and risk assessment (combining information on population, infrastructure, and the built environment with the hazard identification data to target mitigation efforts and resources). Grants provide financial assistance for projects that reduce or eliminate risk. Although a large percentage of the grants are targeted to states as a result of a disaster declaration, all grant programs are tied to state and local hazard mitigation plans. These plans are coordinated through appropriate jurisdictions and interest groups, contain the mitigation strategy that provides the jurisdiction's blueprint for reducing the potential losses, are adopted by the jurisdiction, and have a plan maintenance process for keeping the hazard mitigation plan up-to-date. Flood insurance insures against risks that cannot be physically mitigated. All Federally-regulated lending institutions require flood insurance for mortgages issued in high risk areas.

Evidence: DHS Future Years Homeland Security Program; grant program guidance and eligibility criteria, including cost-effectiveness ensure that assistance is provided in risk areas from natural hazards; Pre-Disaster Mitigation and Earthquake Consortium grants administration processes are located on the Fedgrants.gov website; mandatory insurance purchase and floodplain management requirements of the NFIP are targeted at floodplain areas; 44 CFR 60.3, Floodplain Management Requirements; Robert T. Stafford Disaster Relief & Emergency Assistance Act, P.L. 93-288; Natl. Flood Insurance Reform Act of 1994; Flood Disaster Protection Act of 1973; Flood Insurance Interagency Task Force Final Report to Congress, Sept.18, 1998; Community Rating System of the Natl. Flood Insurance Program, Sept., 23, 1996; Flood Hazard Mapping of Areas Within the Coastal Barrier Resources System Report, June 21, 2000 and letter dtd July 10, 2000; Response to Questions Regarding the Use of Flood Insurance Rate Maps by the U.S. Army Corps of Engineers in Administering Nationwide Wetlands Permits; Economic Policy Subcommittee Ranking Member for The Natural & Beneficial Functions of Floodplains Letter: Reducing Flood Losses by Protecting and Restoring the Floodplain Environment, Sept. 6, 2002.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The FEMA Mitigation Program's long-term goal is: To achieve an aggregate $10.5 billion reduction in potential property losses from flooding and other natural disasters for Fiscal Years 2007 through 2011. The NFIP and the grant programs contribute to this goal. Mitigation strives to reduce disaster losses by changing physical conditions and behaviors to protect lives and prevent property damage. Two long-term output goals contribute to this long-term goal. The Mitigation Program will provide flood risk data in GIS format for 100% of the population by FY 2010. The flood risk data will contain updated floodplain boundaries, and the modernized format improves access and usability of the data. The Mitigation Program will also effect the number of communities taking or increasing action to reduce their hazard risk through participation in the NFIP, adopting higher regulatory standards to manage flood risk, completing state and local hazard mitigation plans thereby mitigating existing structures at risk, and undertaking projects to reduce future losses to existing structures.

Evidence: DHS Future Years Homeland Security Program; FEMA Strategic Plan 2003-2008; Congressional Justification; Mitigation's FY03 GPRA performance measures; Final annual performance plans for FY01-03 available.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: Mitigation has set 2011 for the achievement of its aggregate cost avoidance goal. The NFIP component was developed using compliance rates, estimates of new construction, and insurance claims data. The target is aggressive because it requires that communities adopt and enforce floodplain management practices that exceed the NFIP minimum standards to achieve the goal. The mitigation grant program component is based on the benefit-cost ratio for grant projects awarded. Prior to the passage of the Stafford Act in 1988, flood loss reduction projects focused on large structural projects such as levees and dams constructed by the USACE and others. These types of projects require significant investment and long-term maintenance. Mitigation grant dollars eliminate or reduce the risk without continued federal investment. Currently, flood risk data are in paper format and much of it is in need of updates. None of the nation's flood risk data was in GIS format in 2002. Basellines for the performance measures were established in 2002.

Evidence: DHS Future Years Homeland Security Program; FEMA Strategic Plan 2003-2008; Congressional Justification (CJ); Mitigation's FY03 GPRA performance measures; Final annual performance plans for FY01-03 available.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: FEMA Mitigation annually measures the increasing avoidance of potential property losses, disaster, and other costs. The National Flood Insurance Program (NFIP) income to expense ratio, measuring the operating efficiency of the NFIP, is also tracked annually. This is accomplished by measuring income to operating expenses and historical loss levels. An efficient insurance program keeps premiums more affordable and this reinforces community participation and contributes to flood losses avoided. Another annual measure is the increase in the number of flood insurance policies in force. Increasing the number of flood insurance policies means that more people are able to recover more quickly from a flood event and fewer federal resources are necessary to assist flood disaster recovery.

Evidence: DHS Future Years Homeland Security Program; Mitigation's FY03 GPRA performance measures - final annual performance plans for FY01-03 available.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The NFIP's efficiency measure was benchmarked in FY 2001 at 112 percent and annual improvements were established from that measure. Achieving improvements in operating efficiency will require balancing rate increases with the goals of increasing insurance policy sales and program participation. The targeted improvements in operating efficiency are ambitious because rate increases will have to be balanced against the competing goals of increasing insurance policy sales and maintaining or increasing levels of program participation. The baseline for the increase in number of flood insurance policies in force is 0.97% in 2002. The target is ambitious because there has not been a 5% annual increase in the number of policies since the program began.

Evidence: DHS Future Years Homeland Security Program; FEMA Strategic Plan 2003-2008; Congressional Justification (CJ); Mitigation's FY03 GPRA performance measures; Final annual performance plans for FY01-03 available.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: All contracts greater than $5 million awarded since 2004 are performance-based and contractors report at least quarterly on progress and achievement on goals. Performance metrics in these contracts are aligned with annual and long-term program performance goals. Grant applications specify the losses avoided through the mitigation actions to be funded. State business plans for floodplain management and mapping are required to include performance measures aligned with the program goals.

Evidence: Contract Performance Requirement Summaries; Community Assistance Program Support Services Element guidance documents; Map Modernization Management Support documents; Hazard Mitigation Grant Program grant application criteria; Pre-Disaster Mitigation Grant Program grant application criteria; Flood Mitigation Assistance grant application criteria; Map Modernization Management Support documentation: Earned Value Management System (EVMS), Mapping Information Platform (MIP), Multi-Year Flood Hazard Identification Plan (MHIP).

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The American Institutes for Research is conducting a comprehensive evaluation of the National Flood Insurance Program (NFIP). The evaluation focuses on six areas of inquiry that are targeted toward improving program effectiveness and efficiency and that are of the greatest priority to the NFIP. The evaluation will be accomplished through case studies, participant interviews, new data collection, and other techniques. Once completed, the evaluation will be the benchmark for regular future evaluations of the NFIP. The GAO and DHS IG conduct regular audits and reviews of various aspects of the mitigation programs. Management relies on these independent assessments to provide recommendations to improve program effectives and is diligent about following-up on the recommendations to ensure continuous improvements to operations. The Multi-hazard Mitigation Council's report, expected in 2005 will address hazard mitigation grant program benefits.

Evidence: The research design, annotated bibliography, annual report, and selected reports from the Evaluation of the National Flood Insurance Program are available for review at www.fema.gov/nfip/nfipeval.shtm. Other evidence includes reports from independent auditors, reports on Community Rating System assessments, GAO reports. Multihazard Mitigation Council of the National Institute of Building Sciences - Parameters for an Independent Washington, D.C. July 2002, Study To Assess the Future Benefits of Hazard Mitigation Activities Prepared for the Federal Emergency Management Agency by the Panel on Assessment of Savings from Mitigation Activities: www.nibs.org/MMC/images/July%202002%20Phase%20I%20Final%20Report.pdf.

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The Mitigation program budget is developed through a strategic planning process at the Component and Departmental level that requires program mission to be linked to specific program objectives which are tied to program goals and objectives. The DHS Future Years Homeland Security Program (FYHSP) include program performance measures and targets, annual milestones information, and reflect alignment of programs and associated resources to the goals and objectives in the DHS Strategic Plan. However, funding requests for the largest portion of grants, the Hazard Mitigation Grant Program, are based on historical averages and percentages of declared disasters rather than performance.

Evidence: DHS Planning, Programming, Budget and Execution system and Future Years Homeland Security Program 05-09; FEMA 05 Budget Narratives and Quarterly Performance Reviews/Mitigations' Mid-Year Review.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The Mitigation program seeks ways to impove and address deficiencies as the are identified. The program is currently working to address a deficiency identified by GAO concerning the Repetitive Loss property drain on the solvency of the NFIP. The Flood Mitigation Assitance program is targeted to reducing the number of repetitive loss propeties. More recently, to accelerate addressing repetitive loss properties, a business case was developed to examine the value of a pilot program further targeting these properties. The 2002 Hazard Mitigation Grant Program (HMGP) PART analysis identified the low threshold for project eligibility as a deficiency. As a result, the competitive basis for the Pre Disaster Mitigation (PDM) grant program was designed to ensure that the most cost-effective projects are funded. The average benefit-cost ratio for PDM projects funded in FY 2004 was 3.4:1.

Evidence: FEMA Strategic Plan and FY 2004 Annual Performance Plan; Human Capital Strategy documents; Mitigation's FY03 GPRA performance measures - Final annual performance plans for FY01-03 available; Memorandum dtd March 8, 2005 from Mitigation to FEMA Undersecretary on Repetitive Loss Mitigation Programs; Memorandum dtd February 9, 2005 from Mitigation to FEMA Office of Plans & Policy on FY2006 Funding for the Pilot and Individual Repetitive Claims Properties Mitigation Programs. The research design, annotated bibliography, annual report, and selected reports from the Evaluation of the National Flood Insurance Program are available for review at: www.fema.gov/nfip/nfipeval.shtm; GAO-04-401T NFIP: Actions To Address Repetitive Loss Properties: www.gao.gov/new.items/d04401t.pdf.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Mitigation presents integrated performance data quarterly, including targets, progress, remedy of shortfalls and provides the basis to adjust program priorities and reallocate funds. The NFIP collects and reconciles financial/statistical data from its insurance company partners to monitor overall program efficiency, compute the annual efficiency measure, set insurance rates to maintain fiscal soundness, and adjust program activities to ensure goals are met. Data is collected from participating communities to monitor participation, eligibility, and compliance with floodplain management requirements. Consistent with GPRA goals, grantees submit performance reports (including cost and schedule progress) quarterly. Large-scale development efforts such as the Map Modernization program tracks and manages performance using an earned value management system with established baselines.

Evidence: Mitigation Quarterly Performance Summary Report Briefings; Transaction Record and Reporting Processing Plan; Map Modernization Balanced Scorecard Report; Earned Value Management reports; Quarterly Grant Performance Reports from States. NFIP Actuarial Rate Review; 44 CFR Part 62 Appendix A; Evidence of verifying project performance post-disaster: Weekly report from FL DFO; The monthly and quarterly GPRA progress reports are used to track our progress towards our baseline goals during the current Fiscal Year; Map Modernization Management Support documentation: Earned Value Management System (EVMS), Mapping Information Platform (MIP), Multi-Year Flood Hazard Identification Plan (MHIP); monthly and quarterly GPRA progress reports are used to track our progress towards our baseline goals during the current Fiscal Year; Partners in Earthquake Mitigation: The National Earthquake Hazards Reduction Program Report to Congress, FY 2001-2002 with cover letter to Chairman, House Subcommittee on Research, April 28, 2003.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: The performance of managers is reviewed regularly and will be the basis for compensation under MAXHR, a system that ties Federal managers' performance to program performance and is being implemented across FEMA in October 2005. Further, the Mitigation Division Director reports on program performance and remedies to deficiencies to the Under Secretary at least quarterly. The Write Your Own (WYO) arrangement with private insurance companies includes specific performance criteria for processing insurance applications and adjusting insurance claims which the private insurance companies that sell and service flood insurance must meet. In addition, all WYO companies are required to conduct an independent biennial audit of their flood insurance activities and submit a report to FEMA. For mitigation grant programs, accountability is established through the grant award documents, or for the HMGP program, through the FEMA/State Agreement.

Evidence: FEMA Mitigation performance-based contract quarterly reports; Prior Year Performance Reports; Regional Business Plans; Quarterly reports from states; Map Modernization monthly summary reports; MAXHR documentation and website; State Hazard Mitigation Plans; 44 CFR Part 62 Appendix A; 44 CFR, Part 62, Appendix A, Article II.B for the specific performance standards to which the WYO are held. These are monitored through monthly TRRP submissions, operational reviews, and biennial audits; Assessment of the Appropriateness of the 30-Day Waiting Period for Policies Sold Under the National Flood Insurance Program, March 1995.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: A schedule is developed for contract and grant obligations, is monitored and reported on quarterly. Mid-year reviews are conducted at the Department, Directorate, and Division levels and adjustments are made to ensure timely obligations. NFIP financial statements are audited annually by an independent CPA firm, has received unqualified audit opinions since the late 1980s and has never been cited for an Anti-deficiency Act violation. The NFIP monitors claim payments. Private insurance partner companies and a servicing contractor make these payments in accordance with the terms of the insurance policy following strict guidelines established by the NFIP. For Mitigation grants, the State Grants Financial Transactions Report provides monthly status updates on obligation and expenditure totals. Obligations of some grant funds, particularly Pre-Disaster Mitigation grants, have lagged signficantly, and revised program procedures have not yet demonstrated whether the problem has been successfully addressed. The program has not had significant erroneous payments or been in violation of the Anti-Deficiency Act.

Evidence: "FEMA's Financial Acquisition Management Division Annual Performance & Accountability Reports; National Emergency Management Information System (NEMIS); Integrated Financial Management Information System (IFMIS); Inspector General audits of FEMA's mitigation grant management; the National Flood Insurance Program (NFIP) received unqualified audit reports when separately audited; Procurement Administrative Lead Time (PALT) schedules; National Environmental Policy Act (NEPA). State Hazard Mitigation Plans; State Business Plans for Mapping and Floodplain Management; Multi Hazard Flood Map Modernization briefing; The State Grants FIT or financial transactions report tracks the monthly progress in obligated Federal Mitigation grant dollars; Mitigation grant and sub-grant recipients are required to show project progress and expenditures on a quarterly basis; National Flood Mitigation Fund Report describes status of the Fund and status of any mitigation activities carried out under the Mitigation."

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program leverages a great deal of its resources through contracted work, which has led to efficiencies and cost containment. The NFIP tracks fiscal soundness and efficiency annually by measuring income to operating expenses and historical loss levels. The baseline for this efficiency measure was established in 2001 at 112%. All of the major NFIP contracts are performance-based and contain performance standards, a surveillance method, and incentives or disincentives, as appropriate. The Write Your Own (WYO) Arrangement with private companies providing flood insurance contains specific standards for processing insurance applications and for paying claims. The hazard mitigation grants require cost-effectiveness determinations, consistency with an overall State/local hazard mitigation plan, and State/local cost share; this arrangement incentivizes grantees and sub-grantees to realize efficiencies and cost containment.

Evidence: FEMA's Financial Acquisition Management Division Annual Performance & Accountability Reports. Cost share arrangements and program documentation are available; FEMA's IT / Enterprise Architecture program; Capital Planning and Investment Control (CPIC) process; OMB Exhibits 300 and 53; Multihazard Mitigation Council Independent Study to Assess Future Savings from Mitigation Activities (expected release May 2005); HAZUS Annual Progress and Utilization Report for FY 2004; Western States Seismic Policy Council - An Earthquake Consortium; Northeast States Emergency Consortium (NESEC) Semi-Annual Report: September 1, 2004 to February 28, 2005; Cascadia Region Earthquake Workgroup; Dam Safety Program Management Tools (DSPMT) User's Manual, Software Version 2.0, Manual Version 2.0: Section 10: Appendix; the Performance Measures; FY2005 Mitigation BCA Toolkit and National Benefit Cost Analysis (BCA) Team activities. NSP issues monthly EVM status reports, detailing process made for each CLIN & sub-CLIN, and a narrative documenting actual results; additionally, FEMA and the NSP do integrated baseline reviews to clarify and confirm the nature and quality of the work products to be delivered under the task orders. Results are reported quarterly as one of the key performance indicators (KPIs) in the Flood Map Modernization Scorecard; MIP dashboard will produce reports similar to EVM reports on the cost, schedule, and performance of each study and the aggregate of studies, as well as number of preliminary and adopted maps realized. These data are reported in the Flood Map Modernization Balanced Scorecard and as one of the KPIs there. Use of the MIP is tracked as one of the KPIs in the Flood Map Modernization Balanced Scorecard. The level of leveraged funding by FEMA's mapping partners is tracked as one of the KPIs in the Flood Map Modernization Balanced Scorecard.

Does the program collaborate and coordinate effectively with related programs?

Explanation: Mitigation collaborates with related programs to improve program effectiveness. For example, participation in the National Digital Elevation Program results in a product that enables all users of digital elevation data to determine status and plans for data collection to eliminate duplication of efforts. Funding distribution to support State and local capability and hazard mitigation activities is based on business plans, cooperative agreements, and collaborative identification of priorities through planning activities. The NFIP collaborates with private insurance companies and state insurance regulators resulting in the inclusion of flood insurance in state insurance licensing examinations and CEU credits for flood insurance courses. As a result of Hurricane Isabel, FEMA is working with the states to further strengthen training requirements for agents who sell flood insurance. Mitigation program efforts result in safe building practices incorporated into international and national building codes. Flood hazard data is produced collaboratively with state/local water resources and geospatial data programs.

Evidence: National Digital Orthophoto Program; National Digital Elevation Program; Federal Geographic Data Committee 2004 Annual Report; MOU with National Institute of Standards and Technology; IAAs with U.S Army Corps of Engineers and National Oceanic and Atmospheric Administration-National Weather Service; Executive Order 11988, Earthquake Hazards Reduction Act of 1977; Multi-Year Flood Hazard Identification Plan; State Business Plans for Mapping and Floodplain Management; State Hazard Mitigation Plans. GAO-03-321: Results-Oriented Management Appendix II lists flood mitigation and insurance coordination efforts; FEMA Financial Assistance/Subsidy Arrangement, 2001. HAZUS User Groups; Western States Seismic Policy Council - An Earthquake Consortium; Northeast States Emergency Consortium (NESEC) Semi-Annual Report: September 1, 2004 to February 28, 2005; Cascadia Region Earthquake Workgroup; International and national building codes; Association of Flood Plain Managers; AFSCM NFIP collaboration and partnering work; Flood Insurance Reform Act of 2004, Sections 202, 203, 204 and 207 training.

Does the program use strong financial management practices?

Explanation: Regular reports are run to track expenditures, detect problems within the procurement chain and identify resources for reprogramming or reallocation. The financial management information system is standard for all FEMA programs and has passed audits from GAO and OMB. The NFIP's annual financial statements are independently audited, and the program has received unqualified audit opinions since the late 1980s. The NFIP has never been cited for material internal control weakness or non-compliance with laws (e.g., Anti-deficiency Act) since the audits began. Management of obligations is discussed in Q3.3. Enhanced State Mitigation Plans provide incentive for states to improve their financial management. FEMA grant information is currently recorded and processed in two separate databases. To improve efficienies, integration of these two information databases is underway. Additionally, A-133 Compliance Supplement audits are used to look for trends and issues that need to be addressed. States receiving grants are also subject to the Single Audit Act.

Evidence: DHS IG Testimony on DHS Financial Management; DHS Management Directive System, MD 0005: Financial Management Line of Business Integration and Management; FEMA Report on the Consolidated Financial Statements for FY 1999; National Flood Insurance Program (NFIP) Annual Financial Audits; Integrated Financial Management Information System (IFMIS); SMARTLINK; e-Grants; Enhanced State Mitigation Plan Criteria. Enhanced plans must be re-certified every 3 years, and demonstrate sound State financial management for the entire 3-year period between required re-submittals. The HMGP program is in the A-133 Compliance Supplement, which ensures detailed coverage by state and local auditors. In the FY2004 audit cycle, HMGP was listed in 37 audits for states and local governments. In only 6 cases were there administrative findings related to HMGP. These findings are then sent directly to the FEMA regional office that awarded the HMGP grant and the audit resolution process is carried out between FEMA and the grantee.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: Quarterly reviews evaluate management performance and recommend courses of action to address deficiencies. Included are financial status and progress on recommendations from audits and evaluations. GAO and FEMA's IG have conducted numerous reviews of the NFIP, which has consistently addressed any deficiencies identified. Hurricane Isabel experiences identified deficiencies in communication and understanding of coverage provided by the flood insurance policy. Consequently, the NFIP developed materials written clearly for a variety of customers to explain flood insurance policy coverage and the claims process. The NFIP is working with states to strengthen training requirements for agents that sell flood insurance. NFIP staff continuously review insurance company operations to ensure established performance standards are met. To streamline grant delivery, the grant programs are currently engaged in developing a unified hazard mitigation assistance grant program addressing: consistent policy across all grant programs, re-usable tools, more timely use of funds, and strengthened oversight.

Evidence: FEMA Mitigation Business Transformation Strategy and Human Capital Strategy planning efforts; Contract Officer Representative (COR) and appropriate program management training and certification; GAO-03-446 - Human Capital: Selected Agency Actions to Integrate Human Capital Approaches to Attain Mission Results, April 11, 2003; GAO05-532T: Oversight of Policy Issuance and Claims; Mitigation Quarterly Performance Summary Report Briefings; Memorandum dtd March 8, 2005 from Mitigation to FEMA Undersecretary on Repetitive Loss Mitigation Programs; Memorandum dtd February 9, 2005 from Mitigation to FEMA Office of Plans & Policy on FY2006 Funding for the Pilot and Individual Repetitive Claims Properties Mitigation Programs; OIG Mangement Challenges Memorandum for FEMA CFO dtd October 8, 2003; FEMA Mitigation FY 2003 Annual Performance Report Memorandum for FEMA CFO dtd October 14, 2003; NFIP Training Plan: Flood Insurance Reform Act of 2004, Sections 202, 203, 204 and 207 training.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: FEMA regional offices provide grant oversight and technical assistance, including: project eligibility review; on-site visits; and periodic reviews of state mitigation programs to ensure appropriate use of funds and to strengthen program management. FEMA regional offices monitor program progress and financial status through the review of quarterly reports submitted by States.

Evidence: State Hazard Mitigation Plans; NEMIS data and financial data reports (e.g., State Grant Tool) to monitor expenditure of funds; quarterly reports from grantee to FEMA; FEMA close-out teams.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: FEMA provides information that is included the DHS Future Years Homeland Security Program. This information is available to the public with the President's budget submittal to Congress. FEMA's performance measures are outcome in nature and convey progress toward the more strategic goal of losses avoided, expressed in terms of dollars, by documenting the number of lives removed from harm's way and the number of structures protected. FEMA currently works with States on an ad hoc basis to identify and make available information concerning losses avoided in a post-disaster situation; however FEMA currently is exploring ways to more systematically collect information and document losses avoided.

Evidence: DHS Future Years Homeland Security Program (FYHSP); Mitigation Best Practices documentation.

Are grants awarded based on a clear competitive process that includes a qualified assessment of merit?

Explanation: The Pre-Disaster Mitigation (PDM) grant program is a nationally competitive program that was authorized in FY 2003. FEMA awarded its first round of competitive mitigation grants, approximately $93 million, in FY 2004. Applications are scored on factors including: benefit-cost ratio, feasibility, protection of critical facilities and percent of the population benefiting from the project. The award criteria are detailed in PDM program guidance. FEMA will select the FY 2005 competitive grants for award in June 2005.

Evidence: FY2005 PDM program guidance.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: FEMA regional offices provide grant oversight and technical assistance, including: project eligibility review; on-site visits; and periodic reviews of state mitigation programs to ensure appropriate use of funds and to strengthen program management. FEMA regional offices monitor program progress and financial status through the review of quarterly reports submitted by States.

Evidence: State Hazard Mitigation Plans; NEMIS data and financial data reports (e.g., State Grant Tool) to monitor expenditure of funds; quarterly reports from grantee to FEMA; FEMA close-out teams.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: FEMA provides information that is included the DHS Future Years Homeland Security Program. This information is available to the public with the President's budget submittal to Congress. FEMA's performance measures are outcome in nature and convey progress toward the more strategic goal of losses avoided, expressed in terms of dollars, by documenting the number of lives removed from harm's way and the number of structures protected. FEMA currently works with States on an ad hoc basis to identify and make available information concerning losses avoided in a post-disaster situation; however FEMA currently is exploring ways to more systematically collect information and document losses avoided.

Evidence: DHS Future Years Homeland Security Program (FYHSP); Mitigation Best Practices documentation.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: Mitigation is on target to achieve the long-term performance goals, as shown in the measures data. The NFIP component of reducing threats to life and property contributes over $1B annually through insurance and floodplain management activities (mitigating existing structures at risk, floodplain management practices, and areas exceeding NFIP minimums to reduce future risk). The mitigation grant activities contribute over $600M annually toward this goal. Between 2002 to 2004, $4.246B in losses avoided have been achieved and 2,106 communities have taken actions to reduce risk. The flood hazard mapping program has provided GIS flood risk data for 15% of the population, on track to achieve 100% by 2010.

Evidence: DHS Future Years Homeland Security Program: FEMA Mitigation Quarterly Performance Reviews; FEMA Annual Accountability Reports 2000-2004; Mitigation's FY03 GPRA performance measures; Final annual performance plans for FY01-03 available. Charts titled: "HMGP Total Obligations vs. Total Expenditures" (timely obligation and expenditure of federal mitigation grant funds for the HMGP (Oct '02-May '05); "HMGP Unliquidated Obligations" (how FEMA has worked to reduce the amount of unobligated federal mitigation grants funds (Oct '02-May '05); "Total Project Cost and Net Present Value of Benefits (10/1/92-5/31/05)" and "Average Benefit-Cost Ratio (Applicable Mitigation Projects 10/1/1992 - 5/31/2005)" demonstrate how FEMA's mitigation grant programs have continued to fund cost-effective mitigation projects, returning much greater benefits than the amount of federal dollars spent on mitigation project grants. GPRA targets measure progress in implementing successful mitigation measures within communities. These charts show mitigation implemented FY01- FY05 (to 5/31/05) per GPRA targets.

Does the program (including program partners) achieve its annual performance goals?

Explanation: The NFIP has exceeded its goal for improvement in the Income-Expense Ratio measure from 113.6% in FY02 to 118.6% in FY04. This is being accomplished by increasing program income and controlling operating expenses and minimizing the losses structures sustain. The baseline percentage of annual growth in the number of flood insurance polices (0.97%) was established in 2002. As of the 2nd Quarter 2005, the program has achieved 2.7% growth in the nuimber of policies, and on target to achieve 5% for the year.

Evidence: DHS Future Years Homeland Security Program documents and planning; FEMA Mitigation FY05 1st and 2nd Quarter Performance Reviews, "Annual Performance & Accountability Report" for FY00 - 04. Final annual performance plans for FY01-03 available; WYO Operational Reviews; TRRP Reports. Mitigation grant performance charts titled: "HMGP Total Obligations vs. Total Expenditures" (timely obligation and expenditure of federal mitigation grant funds for the Hazard Mitigation Grant Program Oct '02 - May '05); "HMGP Unliquidated Obligations" (reduction in the amount of unobligated federal mitigation grants funds Oct '02 - May '05). "Total Project Cost and Net Present Value of Benefits (10/1/92-5/31/05)" and "Average Benefit-Cost Ratio (Applicable Mitigation Projects Between 10/1/92 and 5/31/05)" (demonstrates Risk Reduction Branch mitigation grant programs have continued to fund cost-effective mitigation projects, returning much greater benefits vs. amount of federal dollars spent on mitigation project grants). GPRA targets used to measure progress implementing successful mitigation measures within communities. Charts show how much mitigation was implemented between FY01 and FY05 (through 5/31/2005) in relation to a GPRA target number. Red horizontal line on the charts reflects our target number for that goal.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The National Flood Insurance Program has exceeded its goal for improvement in the Income-Expense Ratio measure from 113.6% in FY 2002 to 118.6% in FY 2004. This is being accomplished by increasing program income and controlling operating expenses and minimizing the losses structures sustain. The Pre-Disaster Mitigation program has reduced the time for selecting applications for award from 6 months (in 2004) to 3 months (in 2005).

Evidence: From our GPRA reporting, the income to expense ratio improved to 113.6% in FY 2002, 116.6% in FY 2003, and 118.6% in FY 2004; DHS Future Years Homeland Security Program; FEMA Annual Accountability Reports; FY2005 Pre-Disaster Mitigation Grant Cycle Timeline; NFIP Actuarial Rate Review.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: FEMA's flood mitigation programs have similar purposes and goals as two other programs (U.S. Army Corp of Engineers (Civil Works) Flood Mitigation program and USDA Natural Resources Conservation Service (NRCS) Small Watershed Program). However, FEMA's programs are designed and operate differently than the Corps and NRCS programs. The NFIP is uniquely structured to address a critical mitigation need and reduce the impacts of disasters on the U.S. Treasury. Few private insurance companies offer flood insurance - those that do charge prohibitively expensive premium rates, typically, for amounts of insurance above NFIP maximum limits. Most private flood insurance is underwritten using NFIP identified flood hazards and sold in participating communities. Without the risk identification and risk reduction activities of the NFIP, private insurers would be unlikely to sell flood insurance. A common measures analysis performed by OMB in 2002 comparing flood prevention/mitigation efforts sponsored by the NRCS and the Corps of Engineers found that FEMA's median flood damage reduction project from the sample provided about twice the net benefits of the median NRCS project. However, the analysis indicated that the benefit-cost methodology used by each program was not identical, so an exact comparison was not possible. For non-flood hazard mitigation, there are no comparable Federal programs that provide grants for hazard mitigation to States and local communities.

Evidence: "The Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288 defines the disaster assistance provided by FEMA: www.fema.gov/library/stafact.shtm; Watershed Protection and Flood Prevention PART Performance Measurement - Dept of Agriculture; OMB's report indicated that each of the four groups of project types in the Hazard Mitigation Grant Program sample used for the common performance measure produced a benefit-cost ratio over the required threshold of 1.0, indicating cost effectiveness. The cumulative ratio for all the projects in the sample was 2.68: www.whitehouse.gov/omb/memoranda/m02-06_addendum.html#h4. RAND Study on the Private Market for Flood Insurance; Benefit Cost Analysis (BCA) charts demonstrate how FEMA is recognizing approximately $2.47 in avoided losses for every $1.00 spent on mitigation projects. "

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Independent program evaluations have been conducted or are ongoing by GAO, the OIG, and the American Institutes for Research (AIR). The AIR revealed a number of findings identifying issues representing challenges to compliance that NFIP changes or clarification would result in specific benefits. GAO found that FEMA is making progress towards preventing or reducing harm and losses from future disasters through mitigation efforts. A soon to be released Congressionally-mandated study will report on the benefits of hazard mitigation activites. The competitive nature of the PDM program and the requirement for State/local hazard mitigation plans has increased the quality of applications in all FEMA mitigation grant programs.

Evidence: GAO-04-417: Flood Map Modernization: Program Strategy Shows Promise, but Challenges Remain; American Institutes for Research (AIR), March 2005: The National Flood Insurance Program's Mandatory Purchase Requirement: Policies, Processes, and Stakeholders; Evaluation of the National Flood Insurance Program: Annual Report 2003-04. GAO-04-401T: Repetitive Loss; GAO/T-RCED-99-106: Cost Effectiveness of Hazard Mitigation Projects; Benefit Cost Analysis (BCA) charts provided above in 4.1 and 4.2, along with the FY2005 Mitigation BCA Toolkit. Price Waterhouse Coopers Study of the Economic Effects of Charging Actuarially Based Premium Rates for Pre-FIRM Structures, May 14, 1999: Executive Summary and Final Report; National Flood Insurance Program: Issues Assessment - A Report to the Federal Insurance Administration, January 31, 1999; American Institutes for Research (AIR) Evaluation of the National Flood Insurance Program, March 2005: Design, Chronology of the Major Events Affecting, and Annotated Bibliography.