The Federal Emergency Management Agency (FEMA) manages many hazard mitigation assistance (HMA) grants “to promote a national culture of preparedness and public safety, mitigate the consequences that disasters have for communities and infrastructure, and reduce future draws on the Disaster Relief Fund.” Furthermore, they are required by law to ensure that these mitigation activities are cost-effective and thus enforce a benefit-cost analysis (BCA) requirement with all HMA applications.
Recently, FEMA was concerned that the administrative burdens and the costs of application processes could discourage applicants with fewer resources from applying. This concern, along with two 2021 executive orders that direct federal agencies to be more equitable when allocating federal resources, caused FEMA to partner with RAND Corporation’s Homeland Security Operational Analysis Center to explore the ways FEMA could simplify the required BCA process in HMA applications to be more inclusive of lower-resourced communities.
Overall, researchers discovered that FEMA had the intention of being equitable yet also simple when designing the HMA application, yet sometimes those two goals compete. They also concluded that FEMA’s approach to BCA is different from those of other federal entities, and that they also have the authority to implement the recommended changes themselves. In conclusion, the authors made several recommendations to ensure equity in the future.
Recommendations:
- Replace the BCA with a simpler measure of cost-effectiveness.
- Establish a minimum cost threshold or other criteria for a full BCA.
- Allow applicants to include alternative discount rates.
- Consider broader types of benefits.
- Apply distributional weights to benefit and cost calculations.
- Incorporate BCA and ratios more clearly into the award decision.
- Change FEMA large project notification reporting practices.
- Precisely specify benefiting areas.
- Encourage applicants to solicit subapplications from disadvantaged communities.
You can read the full research report here.
For more information on topics related to this piece, please visit the HSDL In Focus collections on Federal Workforce Challenges and Disaster Economics.
