research paper on the dhs

Running head: FINAL PROJECT ASSIGNMENT ON THE DHS`s 1

Final Project Assignment on the US DHS`s Federal Emergency

Management Agency Leone, Tom-James

Walden University

Finance & Budgeting for the Public Sector

PPPA-8431-4

DR. Lisa Saye

August 09, 2014

FINAL PROJECT ASSIGNMENT ON THE DHS`s 2

Abstract

This project work argues that citizens of the U.S

view FEMA from a political or ideological perspective. FEMA may

be a well-meaning agency that works assiduously in protecting

citizens and critical infrastructure or a bogus, inept and

wasteful entitlement program. But as a government agency, FEMA

remains accountable to taxpayers, must maintain transparency,

embody honesty, integrity and credibility. FEMA needs the latest

fraud prevention tools. U.S government`s policies impact FEMA`s

financial and budgetary Operations in every fiscal year`s

budgetary appropriations. FEMA`s personnel not having or

disregarding a fiscal strategic plan that aligns with the

programs FEMA continually works on and FEMA`s personnel not

coordinating in regards to fiscal issues identification are the

two internal issues most likely to impact FEMA`s strategic fiscal

planning. The usage of cost-benefit analysis for FEMA is for

determining how devoting a significant amount of money to


purchase a new building, technology or upgrade an existing

building or technology –assets may impact FEMA. That FEMA

renders public services and does not charge for the services

rendered does not mean that FEMA`s budget has to be arbitrary.

FEMA`s budgetary requests must be sustainable and not be

overbearing.


Introduction

This project work demonstrates knowledge, critically

applies and evaluates the major concepts presented in the course

work titled “Finance and budgeting for the public Sector.” The

project work offer analysis on the following issues; mission and

goals of FEMA, ethical considerations related to finance and

budgeting within FEMA, some technological considerations for

improving the efficiency of finance and budgeting within FEMA.

The project work makes analysis on the applicable policies

impacting the FEMA`s financial and budgetary operations. Finally,

FEMA`s budget process and revenue sources, the internal factors

impacting a successful FEMA`s strategic financial planning,

FEMA`s uses of cost-benefit analysis, overview of FEMA's cash

management, investment strategies and FEMA`s overall financial

condition are assessed.

Mission and goals of the Federal Emergency

Management Agency

The Federal Emergency Management (FEMA) is a sub-agency

in the United States of America`s (U.S) Department of Homeland

FINAL PROJECT ASSIGNMNET ON THE DHS 5

Security (DHS). FEMA was originally conceived to be responsible

for emergency management operations in case a nuclear disaster

were to occur in the peak of the Cold-war during Richard Nixon`s

tenure as the President of the U.S. During President Carters`

tenure, and based on a plea by the National Governor`s

Association (NGA), President Carter through an Executive Order

(EO) 12148 proclaimed the emergence of the Federal Emergency

Management Agency (Bullock., Haddow., Coppola, & Yeletaysi,

2008). Empowered by EO 12148, FEMA began overseeing natural-

disaster relief, civil defense planning in regards to nuclear

disaster occurrence, coordinating and managing natural disasters.

FEMA was put to cavalierly use by President Reagan

through EO 12657. Peters, & Woolley, (1988)., Martin, (2000) &

Vankin & Whalen (2003) posited FEMA had the powers to suspend the

U.S constitution, arrest and detain citizens without a warrant

and hold citizens without trial and even re-locate entire

populations if the need were to arise. Furthermore, FEMA could

seize property, food supplies, and transportation systems and had

the task of preparing mob control techniques (Vankin & Whalen,

2003). The siege mentality FEMA was operating was furthered when


George H. W. Bush became President. In the Presidency of Clinton,

FEMA was once again returned to the former position of managing

man-made and natural disasters. FEMA became accepted as a well-

meaning agency that works assiduously in protecting citizens and

critical infrastructure in the U.S. (Drum, 2012). However, the

gains FEMA made in emergency management under President Clinton

were halted and reversed when George W. Bush became President.

For example, the federal disaster assistance programs overseen by

FEMA became bogus, inept and wasteful entitlement programs.

FEMA funds for operations were re-routed towards man-

made disturbance related protection projects (Tom-James, 2014).

The vicissitudes FEMA underwent intensified after .becoming one

of the sub-agencies in the DHS after the September 11th, 2001

terrorist attacks upon the U.S. when the Department of Homeland

Security (DHS) was created. The DHS through FEMA was given the

mandate and mission to protecting the United States of America

(U.S) from man-made disturbances and natural disasters. In

performing the work of protecting the U.S and critical

infrastructures, the parent body the DHS and the sub-agency FEMA

uses the business model of enterprise and stakeholder concept in


working with different stakeholders, different agencies in the

U.S and countries in the world while FEMA specifically relies on

mitigation, preparedness, response and recovery activities

(Badey, 2008).

Ethical Considerations Related to Finance and

Budgeting within FEMA

Specifically, FEMA`s procedure in emergency management

includes proactive mitigation and preparedness activities before

disaster occurrences and reactive response and recovery

activities after disaster occurrence. For example, FEMA provides

disaster relief assistance through the Robert T. Stafford

Disaster Relief and Emergency Assistance Act. FEMA uses the

National Emergency Management Information System (NEMIS), and

contractor in validating a disaster relief applicant’s identity,

occupancy and ownership information provided during the

registration process (DHS, 2011). Till date, FEMA has disbursed

billions of dollars to disaster survivors. However, FEMA`s

disaster relief assistance programs are prone to un-ethical

behaviors of fraud, waste, and abuse since over $643 million have


been identified since the occurrence of Hurricane Katrina (DHS,

2011).

As a government agency, FEMA remains accountable to

taxpayers and must by maintain transparency (Rossmann & Shanahan,

2012). Citizens of the U.S reposes implicit confidence in FEMA.

To this end, FEMA is expected to embody honesty, integrity,

credibility, accountability, moral stature, and keen sensitivity

(Eskridge, French & McThomas, 2012), regarding public spending.

To retain the public trust, FEMA requires additional monitoring

through the Offices of Inspector General (OIG) and the General

Accountability Office (GAO) so that FEMA may become a better

steward. FEMA is addressing ethical, fiscal matters by

instituting a Fraud Prevention and Investigation Branch (FPIB).

Expectations are that FPIB would assist in identifying and

reporting financial fraud, waste and abuses in FEMA disaster

relief assistance programs. However, FEMA`s FPIB does not have

and should be given an agency-wide mandate to investigate cases

of fraud, waste and abuse. FEMA must endeavor to ensure that

disaster relief assistance is provided to the needy and eligible

recipients at the right cost. FEMA should not rely solely on


Contractors when validating an applicant’s identity, occupancy

and ownership information provided during the registration

process; rather FEMA needs to employ more staff. FEMA needs to

avail itself of the latest fraud prevention tools. Finally, The

OIG and GAO reviews, should continue. FEMA should make

improvements in the areas of internal controls regarding disaster

relief assistance disbursements. This project concurs with the

DHS (2011) that the Implementation of internal controls may

likely deter fraud; reduce waste and abuses experienced in FEMA

in regards to improper payments on disaster relief assistance.

Also, FEMA`s leaders must endeavor to demonstrate the importance

of fiscal responsibility regarding disaster relief assistance

program integrity (DHS, 2011).

Technological Considerations for Improving Efficiency of Finance

and Budgeting in FEMA

Computer-based management information systems remain

the life-line in emergency management in the U.S., For example;

FEMA currently uses the computer-based technological tool known

as the National Emergency Management Information System (NEMIS).


NEMIS provides an FEMA personnel access to human data across the

entire FEMA emergency management process. After data is

retrieved, a contractor validates an applicant’s identity,

occupancy and ownership information provided during the

registration process (DHS, 2011). FEMA may be better served by

improving efficiency in finance and budgeting by utilizing a

computer based program software called the Federal Emergency

Management Information System (FEMIS). During the process of

managing a disaster, FEMIS has the capability to knit and provide

information on FEMA`s mitigation, planning, coordination,

response activities. Finally, FEMIS computer based program

supports Chemical Stockpile Emergency Preparedness Program

(CSEPP) planning and operations (Global Security.Org, 2014 &

FEMA, 2011). FEMA`s emergency management process could benefit

from the ubiquitousness of the STK technology that comes in 2D

and 3D, used in weather mapping, simulating and tracking real-

time performance of complex systems like aircrafts, satellites

and ground vehicles. In the specificity of FEMA, the uses of STK

technology includes knowing where FEMA assets are, how the assets


are positioned, how what an asset like satellites are seeing and

who may see what the satellites see (AGI, 2014).

How the described technologies could improve FEMA`s

efficiency in finance and budgeting may be through the internal

control process. As previously stated; efficiency ought not to be

sacrificed on the altar of speed. FEMA may continue engaging the

services of Contactors, trusting the Contractors; better still

vetting performed by Contractors have to be re-evaluated by a

sworn agent of FEMA utilizing computer based tools like

Envirofacts and FEMIS. The application work recognizes that

human-Contractors operate in regards to remuneration and may not

be bothered by ethics. On the other hand, sworn FEMA personnel

have an ethical, fiduciary and remunerative need and

responsibility. The end-product of utilizing Envirofacts and

FEMIS would be to re-check the authenticity of a validated

application submitted by a human-contractor. The hope is that a

re-check may uncover un-ethical behaviors of fraud, waste, and

abuse. However, the two computer-based technologies do not have

the capacity to operate in tandem with the other; FEMA needs to

employ more staff. FEMA should make improvements in the areas of


internal controls regarding disaster relief assistance

disbursements. The assignment work still concurs with the DHS

(2011) that the implementation of internal controls may likely

deter fraud; reduce waste and abuses experienced in FEMA in

regards to improper payments on disaster relief assistance (Tom-

James, 2014).

Applicable Laws, Regulations, and Policies Impacting FEMA`s

Financial and Budgetary Operations: And Evaluating FEMA`s Budget

Process and Revenue Sources

Federalism is a principle of government defining the

relationship between the central government at the national level

and the constituent units at the regional (state, or) local

levels. Under Federalism, power and authority are devolved

between the national state and local governmental units. Each

unit retains a sphere of power and authority only it can exercise

while other powers are shared. Federalism in the United States of

America (U.S) is effected by the Federal, state, and local

governments independently or jointly by providing and financing

public services. Governments in the three federating tiers in the


U.S are elected by citizens to serve a specific term (Mikesell,

2014). State and local government’s control the Police

departments, raise revenue and spend the revenue generated in

delivering public works and services. In the U.S, the benefits

of federalism include free speech, choice and liberty of citizens

and the federating states and local governments competing for

economic growth. State and local governments deliver goods and

services efficiently at reduced costs; drive-down monopoly and

reduce the size of government through effective cost monitoring

(Gillette, 2012).

In the United States of America, the federal

government constitutionally provides national and homeland

defense, sets, conducts foreign, fiscal and immigration policies.

Other constitutional responsibilities of the federal government

include providing postal services, augmenting and subsidizing

special projects that result from imposed Federal mandates

(Mikesell, 2014). However, the federal government`s applicable

laws, regulations, and policies impact FEMA`s financial and

budgetary Operations in every fiscal year budgetary

appropriations. FEMA does not operate for profit but derives


operational funding through the taxes paid by the citizens and

businesses operating in the U.S. FEMA, before the terrorist

attacks upon the U.S, FEMA was an autonomous agency with direct

Congressional oversight-Congress dealing directly with FEMA.

However, following FEMA`s 2003 merger to the newly formed

Department of Homeland Security (DHS), Congressional oversight of

FEMA became indirect- Congress began dealing with FEMA through

the DHS (Sobel, Coyne, & Leeson, 2007).

To this end, FEMA`s budgetary operations began to be

submitted to the DHS that in turn forwards the proposal through

the Executive Office of the President. The President`s budget

proposal is debated by Congress as part of the legislative

budget-setting process. If approved, Congress then releases

funding that come attached with specifications to the DHS.

Because the U.S constitution cedes disaster management to the

entity (state or local government) where the disaster occurred

(Blanchard, 2007), under the former National Response Plan (NRP)

and the later continuing National Response Framework (NRF), State

and local governments (tribal governments) attracted meagre

homeland security funding by engaging mostly in man-made


disturbances and anti-man-made disturbances projects (Bullock,

Haddow, & Coppola, 2011). To further secure state and local

jurisdictions from the threats and hazards of natural disaster

occurrences, State and local governments then raise taxes on

individuals, businesses and public works from where revenue are

generated.

Because the funds FEMA, state and local government

receive from Congress come attached with specifications and state

and local governments raising funding through taxes, emergency

management work performed become dismal because of financial and

human resource deprivation. On the other hand, huge financial

resources appropriated for U.S homeland protection are deployed

in other endeavors like borders, air and sea port protection in

anticipation of warding-off or managing man-made disturbances.

However, in view of the sundering vicissitudes FEMA had passed

through due applicable laws, regulations, and policies, FEMA has

continued to excel in the work of emergency management operations

in the U.S.


Internal Factors Impacting FEMA`s Successful Strategic

Financial Planning

An internal factor that impact FEMA`s successful

strategic financial planning includes FEMA personnel not having

or disregarding a fiscal, strategic plan that binds man-made

disturbance and natural disaster programs FEMA continually works

on (Brittain, 2006). The rationale for FEMA having fiscal,

strategic plan includes having a working framework that provides

an opportunity for securing funding from Congress for f the work

of protection. Though FEMA`s fiscal, strategic plan might be an

ordinary document put together by personnel, the ordinary

document put together by FEMA`s personnel remains a work-plan for

periodically assessing the progress and potency of FEMA`s

homeland protection programs. The ordinary document put together

by FEMA`s personnel may in the specificity be utilized in

deciphering fiscal issues that need follow-up. To this end,

FEMA`s personnel collective inputs are maximized; compliance and

accountability rendered to U.S Congress that represent tax-

payer`s (Brittain, 2006 & Moynihan, 2006).


Another internal factor that could constitute cog in

FEMA developing a successful fiscal, strategic plan includes

FEMA`s departments and personnel not coordinating in regards to

fiscal issues identification. FEMA`s fiscal, strategic plan have

to be clearly stated for collaboration to affect between the

public and elected officials. Casey & Seay (2010) are of the

opinion that collaboration remains the foundation for fiscal

responsibility and good stewardship. To this end, there is a need

For FEMA budgetary personnel to engage in meetings with non-

budgetary personnel so that fiscal information is shared, working

relationships become improved, strategies and tools that may aid

FEMA meet operational and strategic objectives become

streamlined.

FEMA`s Usage of Cost-Benefit Analysis

FEMA`s usage of cost-benefits analysis will be

for the purpose of determining how a planned action like engaging

in a capital expenditure project like devoting a significant

amount of money to purchase a new building, technology or upgrade

an existing building or technology –assets. A cost- benefits

analysis in the specificity of FEMA will entail adding the


positive factors and the subtracting of negative factors to

arrive on an outcome. The factors to consider will include

ascertaining if the purchase or upgrading an asset will yield

dividends throughout the lifetime of the investment without and

not necessitating a repeat of investment.

Since capital expenditures are deductible in a

recovery period throughout the lifetime of the investment, FEMA

will have to factor-in the recovery period that are designed to

know how to deduct capital expenditures (Mikesell, 2014). Other

factors to consider at the time of cost-benefit analysis include

money earmarked for capital expenditure has to be expended in the

most-effective manner that guarantees a return on investment over

a period. Money that remains a scarce resource has to be spent on

a project (s) that aligns to the strategic goals of FEMA, that

is, effectively contributing in protecting the stakeholders and

critical infrastructure from man-made disturbances and natural

disaster occurrence.

As Mikesell (2014) informed, capital

expenditure projects are enduring, has longevity, and the

potentials to constitute cogs in the future FEMA or even improve


FEMA`s standing. Capital expenditure projects have high price

tags; therefore, wrong allocation of monies may undermine the

financial well-being of FEMA. And because capital expenditures

occur periodically, careful attention is needed in scheduling.

The possibility that capital expenditure projects are capital

intensive, constitute cogs in the future, may undermine the

financial well-being of FEMA mean that capital expenditure

projects are risked pronely. To mitigate risks associated with

capital expenditure projects, capital expenditure projects have

to pass through the processes of planning, budgeting,

implementation and audit (Mikesell, 2014). At the planning stage,

inventory is made of the assets owned by FEMA. Data for collation

includes age, assessment of the condition, and degree of use,

capacity, and likely cost for replacement.

The next step is budgeting. Budgeting includes looking

at how much the organization has on hand, how much money the

organization would have in the near future and the sources for

revenue generation. The reason is to determine the solvency of

the organization to carry additional financial responsibility.

The next stage is implementation where monies received for the


capital project are put into use. Attention has to be paid to the

rules and regulations regarding bidding and awarding of contracts

to ensure that the project is finished on time. The final stage

is auditing. Auditing is done In order to detect waste and most

especially to ascertain that the monies expended into the capital

project are commensurate with the project (Mikesell, 2014).

Overview of FEMA's Cash Management and Investment Strategies:

Assessment of FEMA's Overall Financial Condition

The homeland security services FEMA renders and how

well the services protect citizens and critical infrastructures

determine further how FEMA appropriates money from Congress

through the DHS in satisfying the interests, needs and

expectations of stakeholders. That FEMA renders public services

and does not charge for the services rendered does not mean that

FEMA`s budget has to be arbitrary. FEMA`s budgetary requests must

be sustainable and not be overbearing. Given that FEMA relies

solely on paid taxes for funding, deterioration of revenue base,

adverse internal procedures or legislative/board policies may

adversely affect the funding FEMA receives from Congress.


Deterioration of FEMA`s funding base may be induced by the

Congress or the DHS by limiting or withdrawing monies

appropriated to FEMA. Deterioration of FEMA`s

revenue base may emanate when frauds, waste and complacency

becomes the run of the mill affair in FEMA. Given that FEMA does

not levy fees and charges for the services performed, adverse

internal procedures may affect the funding FEMA receives. This

can occur when internal procedures fail adequately to address the

issues of operational accountability and fiscal responsibility

that are best achieved through instituting internal controls like

internal and external audits. In FEMA, operational accountability

may be achievable through the keeping of a ledger and receipts

for the purchased items like fossil fuels, stationaries, payment

of wages and salaries that are utilized in the provision of

public works and services. Operational and fiscal responsibility

might be achievable through the use of internal audit to improve

performance (Aikins, 2011).

However, where there are insufficient resources to

train and maintain experienced internal auditors, internal

control mechanisms may become inefficient (Linnas, 2011). The


retention of an internal auditor by FEMA may help in

strengthening internal control. The embedded auditor may rely on

pre-existing personal relationships in eliciting cooperation in

areas like cost-cutting that otherwise may not be easily

available to an external auditor. However, caution must be

exercised by an internal auditor regarding co-mingling with

fellow personnel, since co-mingling may impair judgment and limit

the objectivity that is necessary for achieving an ethical

financial auditing and reporting.

Equally, fiscal responsibility and operational

accountability on FEMA`s spending can be assessed through an

audit that is performed by a hired external auditor. The

responsibility of the independent auditor must include retaining

independence status and examining FEMA`s accounts, budgetary

process, the implementation process, compliance to regulations,

recommending risk savings and control measures, and evaluating

trade-offs, preparing a letter and a Comprehensive Annual Finance

Report (CAFR)” (Aikins, 2011 & Byers, 2014, para. 3).

Conclusion


FEMA may be a well-meaning agency that works

assiduously in protecting citizens and critical infrastructure or

a bogus, inept and wasteful entitlement program. But as a

government agency, FEMA remains accountable to taxpayers, must

maintain transparency, embody honesty, integrity and credibility.

FEMA needs the latest fraud prevention tools and technology to

aid the budgeting process. U.S government`s policies do impact

FEMA`s financial and budgetary operations in every fiscal year`s

budgetary appropriations. FEMA`s personnel not having a fiscal,

strategic plan that aligns FEMA with the programs FEMA

continually works on, and personnel not coordinating in regards

to fiscal issues identification are the two internal issues most

likely to impact FEMA`s strategic fiscal planning. Cost-benefit

analysis will help determining how devoting a significant amount

of money to purchase a new building, technology or upgrade an

existing building or technology –assets may impact FEMA. That

FEMA renders public services and does not charge for the services

rendered does not mean that FEMA`s budget has to be arbitrary.

FEMA`s budgetary requests must be sustainable and not be

overbearing.


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