THE MISSISSIPPI LEGISLATURE

Since January 1, 1994, three disasters have occurred in Mississippi (the 1994 Ice Storm, Hurricane Georges [1998], and the 1998 Ice Storm) causing estimated damages of $134,570,668 eligible for the federal Public Assistance Program. The close occurrence and severity of these disasters have increased demands to process disaster recovery claims in a timely manner.

The Mississippi Emergency Management Agency (MEMA) is responsible for coordinating with the Federal Emergency Management Agency (FEMA) to administer the disaster recovery process for the Public Assistance Program in Mississippi. Because of concerns about the timeliness of assistance provided to public entities for the 1994 Ice Storm, PEER reviewed MEMA’s Public Assistance Program.

This program provides supplemental federal/state aid to subgrantees (governmental and private nonprofit entities) to pay certain costs for emergency services immediately after the event and to restore damaged infrastructure to its pre-disaster condition. Federal sources contribute at least 75 percent of damage repair costs, while state and local entities share the remaining 25 percent or less of the repair costs.

In reviewing Hurricane Georges and the 1998 Ice Storm disasters, PEER found that subgrantees and FEMA typically met a sixty-calendar-day processing standard for submitting their projects for disaster assistance. Delays in processing time tended to occur after initial project approval and were found to be the responsibility of both MEMA and its subgrantees.

After project approval, the subgrantee must perform the project work and submit accurate documentation, MEMA and FEMA must conduct final inspections, the State Auditor’s Office must audit the project, and MEMA must grant payment approval. It is during this stage that PEER observed lengthy processing times which delayed payments to subgrantees. Timely completion of tasks in this stage depends on the efficiency with which the four parties complete their responsibilities, because sequential completion of tasks is required.

For the Hurricane Georges disaster, PEER examined the process from the time of project approval until MEMA mails a payment to the subgrantee. For claims where at least one payment had been issued, PEER observed a median (mid-point) processing time of 235 days. However, PEER observed that the typical median processing time for small projects (254 days) exceeded that of large projects (150.5 days) by over 103 calendar days.

Except for project completion standards for small and large projects, neither FEMA nor MEMA had established performance standards to track and measure timely completion of tasks by the parties after initial project approval.

While delays in processing disaster claims cannot be directly attributed to a single cause or responsible party, PEER found several factors that contributed to processing delays. These factors resulted in lengthy periods between the disaster and when the local entity received payment for making disaster-related repairs, renovations, or new construction. These factors include MEMA’s payment policy for small project reimbursements, a lack of trained disaster recovery agents for subgrantees, MEMA’s allocation of staff resources to the disaster effort, and the lack of resources devoted to the backlog in closeout audits.

Although federal regulations require that federal funds be paid for small projects as soon as practicable after FEMA approval of projects and their funding, MEMA did not pay the federal share of small projects to Hurricane Georges subgrantees in accordance with federal regulations. To ensure that the subgrantees completed their funded small projects and assure quality, MEMA required subgrantees to delay submission of cost documentation for financial review until after a final inspection of the completed project.

Although MEMA has a comprehensive program designed to train local emergency management personnel, approximately 96% of the disaster recovery agents who administered the recovery process after Hurricane Georges and the 1998 Ice Storm had not been trained by MEMA in emergency recovery procedures.

MEMA’s allocation of staff resources has not resulted in timely reimbursement of all pending public assistance requests. Although the agency had federal and state funds available for supplemental staffing, it did not take full advantage of these funds. MEMA focused on disaster recovery work from the 1994 Ice Storm and on Hurricane Georges. MEMA reasoned that subgrantees in the 1998 Ice Storm could experience some initial delay in view of its small size relative to the two earlier storms. Because of the delay, 84 of 92 subgrantees did not have official state notification of their approved work and could not request any payments for completed projects from March 1999 to October 1999.

As of October 13, 1999, MEMA had 132 reimbursement requests awaiting transfer for closeout audits for 127 subgrantees. MEMA does not make reimbursement payments to subgrantees until these audits are completed. Increased closeout inspections by federal authorities and MEMA’s inability to track the status of projects awaiting audit contributed to an audit backlog and delay in payment approval. Although the State Auditor allocated additional audit staff in August 1999, the efforts have been limited and the backlog continues to exist.

1. The Legislature should amend MISS. CODE ANN. Section 33-15-14 (1972) to require all civil defense or emergency management directors to complete the training that is currently required for those counties receiving State and Local Assistance funding.

2. The Legislature should amend MISS. CODE ANN. Section 33-15-14 (1972) to require the applicant to designate its civil defense or emergency management director as its designated agent in all natural disasters. The only exception should be another individual who has completed the mandatory MEMA training courses.

3. The Legislature should amend MISS. CODE ANN. Section 33-15-25 (1972) to give MEMA the authority to withhold approved funding to a subgrantee when the subgrantee owes a refund for an uncompleted project.

4. MEMA should adopt performance standards to measure its timeliness in accomplishing its responsibilities in the disaster recovery process from the disaster declaration to grant closeout.

5. MEMA should amend its Application for Public Assistance to state that the subgrantee agrees to return all unspent federal funds for uncompleted small projects prior to requesting additional funds for other projects. This refund could include subtracting the amount owed from any other federal funds owed to it for other approved work when the owed amount is larger than the refund.

6. Through reallocation of existing resources, MEMA should implement a management information tracking system that unifies the multiple systems currently used. This system should include performance standards for measuring efficiency and should be capable of tracking by subgrantee.

7. MEMA should adopt and implement, when necessary, a policy that it will assign and employ, if required, sufficient temporary staff resources to work all open disasters simultaneously during multiple disasters. These temporary resources could include temporarily assigned individuals from other MEMA divisions, contract employees paid from federal grant funds and the State Disaster Trust Fund, or a combination of these resources.

8. MEMA should pay the federal share for small projects as soon as practicable after federal project approval.

9. MEMA should require subgrantees to submit quarterly progress reports for incomplete projects. This status report is required by federal regulation.

10. In order to reduce the backlog of claims to be audited, MEMA (with the cooperation of the State Auditor) should privately contract to acquire temporary audit resources. The State Auditor should provide MEMA with assistance in preparing a request for proposals, evaluating responses, recommending a contract award, and overseeing audits conducted by the contractor.