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Dr. Coburn's Column on Hurricane Katrina Chief Financial Officer Bill

Rebuilding with accountability

By Senators Coburn and Obama

September 23, 2005

So far, Congress has approved $62 billion for Gulf Coast relief and rebuilding. In the few short weeks since Hurricane Katrina hit, the government already has spent $14 billion, nearly the entire amount spent on the deadly Northridge Earthquake that devastated Los Angeles in 1994. Experts tell us that by the time rebuilding is finished, the price tag could very well total more than $200 billion - almost the combined costs of the wars in and .

Most of this money will go directly to the Federal Emergency Management Agency. This is twelvefold the money FEMA was given last year - more than it has ever before been entrusted to spend. If FEMA's record during the rescue effort and in the years before indicates how it will perform in the rebuilding task, this should concern every taxpayer and every citizen who wants to help the millions of Americans devastated by Hurricane Katrina.

Unfortunately, even before this storm, rebuilding efforts involving FEMA and other government agencies have a history of fraud, corruption and waste when there is no oversight or accountability on how the funds are spent.

After Hurricane in 2004, FEMA awarded $30 million and approved more than 12,000 claims for residents of Miami-Dade County . The storm, however, made landfall 100 miles north. Miami-Dade never saw hurricane-force winds.

Newspapers later learned one man called up FEMA for relief funds about a month after the storm brushed by his house. Six days later, the agency cut him a check for more than $11,000. Months after, the inspector general found no evidence of damage to the man's home at all. The agency also paid for 30 funerals of people who died of natural causes.

Unfortunately, this isn't the first time accountability has been missing from a government relief effort. After September 11, 2001, when the Small Business Administration was directed to help New York businesses get back on their feet, it was later discovered SBA provided loans to a South Dakota country radio station, a Virgin Islands perfume shop and a Utah dog boutique - none of which were affected by that day's terrorist attacks.

Clearly, we must ensure the Gulf Coast rebuilding has strict oversight and accountability so taxpayer dollars are not wasted or abused. This is why we have introduced legislation called the OVERSEE Act that would create a Chief Financial Officer to oversee all expenditures associated with Hurricane Katrina relief and reconstruction. The Hurricane Katrina CFO would be staffed with experts from relevant federal agencies and would have management and oversight over any agency using federal funds for the recovery. The CFO will be appointed by the president but must be Senate-confirmed.

The CFO will issue monthly financial reports to Congress for oversight, and the Government Accountability Office will issue quarterly reviews of the CFO work and recovery activities.

Our bill will give legal authority to one person to cut through red tape and make financial decisions that involve multiple government offices and agencies. Thus authorizing one CFO is the only way to achieve a coordinated effort.

But the important thing is this bill would ensure that public funds are allocated properly before they are spent, not after. We believe the president's proposal for a team of inspectors general is not a good substitute for one chief financial officer carefully watching dollars as they go out the door.

A clear lesson in this tragedy is that one point person tends to be more effective than many point persons. Currently, an inspector general can examine expenditure of public funds only after they are spent. We need oversight before the fact, not after - when it is too late to undo mistakes.

Hurricane Katrina is the most expensive natural disaster this country has ever faced, and the rebuilding will be certainly be the largest and costliest of its kind. This entrusts FEMA with massive responsibility, and so it's only right we protect both taxpayers and citizens on the Gulf Coast with strict accountability and oversight about how the money is spent and whether it is most efficiently directed to help rebuild lives.So far, Congress has approved $62 billion for Gulf Coast relief and rebuilding. In the few short weeks since Hurricane Katrina hit, the government already has spent $14 billion, nearly the entire amount spent on the deadly Northridge Earthquake that devastated Los Angeles in 1994. Experts tell us that by the time rebuilding is finished, the price tag could very well total more than $200 billion - almost the combined costs of the wars in Iraq and Afghanistan.

Most of this money will go directly to the Federal Emergency Management Agency. This is twelvefold the money FEMA was given last year - more than it has ever before been entrusted to spend. If FEMA's record during the rescue effort and in the years before indicates how it will perform in the rebuilding task, this should concern every taxpayer and every citizen who wants to help the millions of Americans devastated by Hurricane Katrina.

Unfortunately, even before this storm, rebuilding efforts involving FEMA and other government agencies have a history of fraud, corruption and waste when there is no oversight or accountability on how the funds are spent.

After Hurricane Frances in 2004, FEMA awarded $30 million and approved more than 12,000 claims for residents of Miami-Dade County. The storm, however, made landfall 100 miles north. Miami-Dade never saw hurricane-force winds.

Newspapers later learned one man called up FEMA for relief funds about a month after the storm brushed by his house. Six days later, the agency cut him a check for more than $11,000. Months after, the inspector general found no evidence of damage to the man's home at all. The agency also paid for 30 funerals of people who died of natural causes.

Unfortunately, this isn't the first time accountability has been missing from a government relief effort. After September 11, 2001, when the Small Business Administration was directed to help New York businesses get back on their feet, it was later discovered SBA provided loans to a South Dakota country radio station, a Virgin Islands perfume shop and a Utah dog boutique - none of which were affected by that day's terrorist attacks.

Clearly, we must ensure the Gulf Coast rebuilding has strict oversight and accountability so taxpayer dollars are not wasted or abused. This is why we have introduced legislation called the OVERSEE Act that would create a Chief Financial Officer to oversee all expenditures associated with Hurricane Katrina relief and reconstruction. The Hurricane Katrina CFO would be staffed with experts from relevant federal agencies and would have management and oversight over any agency using federal funds for the recovery. The CFO will be appointed by the president but must be Senate-confirmed.

The CFO will issue monthly financial reports to Congress for oversight, and the Government Accountability Office will issue quarterly reviews of the CFO work and recovery activities.

Our bill will give legal authority to one person to cut through red tape and make financial decisions that involve multiple government offices and agencies. Thus authorizing one CFO is the only way to achieve a coordinated effort.

But the important thing is this bill would ensure that public funds are allocated properly before they are spent, not after. We believe the president's proposal for a team of inspectors general is not a good substitute for one chief financial officer carefully watching dollars as they go out the door.

A clear lesson in this tragedy is that one point person tends to be more effective than many point persons. Currently, an inspector general can examine expenditure of public funds only after they are spent. We need oversight before the fact, not after - when it is too late to undo mistakes.

Hurricane Katrina is the most expensive natural disaster this country has ever faced, and the rebuilding will be certainly be the largest and costliest of its kind. This entrusts FEMA with massive responsibility, and so it's only right we protect both taxpayers and citizens on the Gulf Coast with strict accountability and oversight about how the money is spent and whether it is most efficiently directed to help rebuild lives.