The Office of Inspector General (OIG) has assessed the effectiveness of one of the Federal Emergency Management Agency’s (FEMA) public assistance programs.
OIG assessed whether Public Assistance Alternative Procedures (PAAP) for permanent work projects sped disaster recovery, increased the accuracy of cost estimates to restore facilities, improved the effectiveness of financial incentives and disincentives, the cost effectiveness of PAAP, and whether the PAAP independent expert panel was effective.
Funding for PAAP projects is based on the estimated cost to restore the facility to its pre-disaster design and function while meeting compliance with current codes and standards. Large projects also often fall under Section 406 standard procedures, where initial obligations may be made based on estimates, but final financial reconciliation is based on actual costs.
As of May 13, 2021, FEMA had obligated funds for 15,603 large permanent work projects. Of those projects, 13,509 (86.6 percent) followed Section 406 procedures and 2,094 (13.4 percent) followed PAAP. The average Federal contribution for PAAP projects in OIG’s scope was $8.52 million — 12 times the $710,000 average for Section 406 projects.
OIG determined that FEMA took only slightly longer on average (35 days) to obligate funds for projects using PAAP than for those using standard procedures. However, this assessment excluded Puerto Rico and U.S. Virgin Islands projects, which took significantly longer.
OIG found that PAAP cost estimates provided adequate resources to restore damaged facilities. Only 20% exceeded the fixed cost estimates, and in 30% of cases, the actual cost was less than estimated.
According to applicants using PAAP, the incentives outweighed the disincentives, PAAP helped their communities’ recovery, and most said they would use PAAP again. OIG found that PAAP’s reduced cost tracking and reporting requirements lessened applicants’ administrative burden, and flexibilities in rebuilding allowed for more resilient facilities, leading to potential cost savings.
Ultimately, OIG determined that FEMA is working toward achieving PAAP program goals but should incorporate lessons learned from using PAAP in Puerto Rico and assess potential improvements proposed by applicants.
FEMA concurred and said it is conducting bi-weekly meetings with staff in Puerto Rico and Region 2 to discuss challenges and issue resolution related to Puerto Rico’s recovery. A review process will also include a period for public comment, estimated to occur by July 2023, which will allow the public to provide suggestions related to Public Assistance policy language and guidance.