Background CMS and states jointly administer the Medicaid program and generally share in the financing of Medicaid payments according to a formula established in law. States may deliver health care services to Medicaid beneficiaries through fee-for-service payments to participating providers or through Medicaid managed care plans, through which states pay plans a fixed amount per beneficiary—typically per member per month—to provide a specific set of Medicaid-covered services. States finance their share (nonfederal share) of Medicaid program spending in a variety of ways, including state funds, such as state general funds appropriated to the state Medicaid program and funds collected through taxes levied on health care providers. Within limits, however, states may also use other sources of funds—including funding from local government providers, such as county-owned or county-operated hospitals, or from local governments on behalf of government providers. Federal law allows states to finance up to 60 percent of the nonfederal share of Medicaid payments from local government funds. Medicaid Payments to Hospitals State Medicaid agencies have two primary mechanisms for making payments to hospitals—base payments and supplemental payments— and both can qualify for federal matching funds. Base payments are payments to hospitals for specific services provided to Medicaid beneficiaries through both fee-for-service and managed care. These payments are set by state Medicaid programs or managed care plans, and can vary considerably across states for the same services. Payment amounts for the same service may also vary within a state. States’ Medicaid base payments are typically lower than other payers’, and often are below the costs of providing services. Supplemental payments are typically lump sum payments made to hospitals that are not specifically tied to an individual’s care. Like all Medicaid payments, supplemental payments are required to be economical and efficient. Supplemental payments can be grouped into two broad categories: (1) DSH payments, which states are required to make to certain hospitals; and (2) non-DSH payments, which states are allowed to make, but are not required by law. DSH Payments DSH payments are designed to help offset uncompensated care costs for hospitals serving a high proportion of Medicaid beneficiaries and uninsured low-income patients. In fiscal year 2017, total DSH payments to hospitals nationally were about $18.1 billion. States may distribute DSH payments to any eligible hospital in the state; however, under federal law, the total amount of DSH payments to a hospital must not be more than the total amount of uncompensated care provided by the hospital (both the Medicaid shortfall and uncompensated costs for care for the uninsured). To be eligible for a DSH payment, hospitals must meet minimum requirements such as having a Medicaid inpatient utilization rate of at least 1 percent. States are required to make DSH payments to certain hospitals—termed deemed-DSH hospitals—with a Medicaid inpatient utilization rate of at least one standard deviation above the mean for hospitals in the state that receive Medicaid payments, or a low-income utilization rate that exceeds 25 percent. The amount of federal funding each state may claim for DSH payments is limited by federal law. Since fiscal year 1993, each state is subject to a federal DSH allotment that establishes the maximum federal funding available for the payments. A state’s DSH allotment is largely based on its fiscal year 1992 DSH spending, although Congress has since made several incremental adjustments to these allotments. Ultimately, however, the states that spent the most in fiscal year 1992 continue to have the largest allotments; conversely, the states that spent the least in fiscal year 1992 have the smallest allotments. States may choose to make DSH payments to institutions for mental disease (IMD), which can include state-operated psychiatric hospitals. Prior to 1997, a large share of DSH payments went to state-operated IMDs, where they were used to pay for services not covered by Medicaid and any remaining funds were returned to the state treasuries. In general, Medicaid excludes fee-for-service base payments for beneficiaries aged 21-64 who are residents of IMDs—called the IMD exclusion—and using DSH payments allowed states to support the costs of IMDs. In 1997, Congress restricted the total amount of DSH payments a state could make to IMDs as a group by establishing an annual limit on payments to IMDs for each state. Any unspent funds within the IMD-designated limit can be used for other hospital types. Non-DSH Payments Non-DSH payments include four types of supplemental payments that states may make, but are not required to do so, to hospitals and other providers. Medicaid upper payment limit (UPL) payments are lump-sum payments that are made in addition to fee-for-service base payments. The UPL is a limit or ceiling on the amount of a state’s Medicaid payments for which the federal government will match spending. The UPL is based on the difference between Medicaid fee-for-service base payments and an estimate of what Medicare would pay for comparable services. The UPL is not a hospital-specific limit, but is applied in the aggregate across certain categories of providers. States have some flexibility in deciding which hospitals will receive a UPL payment, and how to allocate UPL payments among hospitals. In fiscal year 2017, UPL payments totaled nearly $13 billion. Uncompensated care pool payments are payments that some states make to hospitals specifically for uncompensated care costs in conjunction with section 1115 demonstration waivers and pilot projects for which they have received approval from the Secretary of HHS. Specifically, section 1115 of the Social Security Act authorizes the Secretary of HHS to waive certain federal Medicaid requirements and allow costs that would not otherwise be eligible for federal matching funds for experimental, pilot, or demonstration programs that, in the Secretary’s judgment, are likely to assist in promoting Medicaid objectives. States have received approval to make supplemental payments for hospital uncompensated care in their Medicaid programs. In fiscal year 2017, states reported total spending of about $8 billion through uncompensated care pools. Delivery system reform incentive payment (DSRIP) programs, which have also been authorized under section 1115 demonstrations, allow states to make supplemental payments to providers engaging in various improvement projects that align with state delivery system reform objectives. Examples of reform objectives include improving care for patients with specific conditions or increasing capacity. In fiscal year 2017, DSRIP program payments totaled about $7.3 billion. Graduate medical education payments help support teaching hospitals, and can include teaching costs, such as physician resident salaries, though states are not required to make such payments to teaching hospitals. States have significant flexibility in designing and administering these payments; however, the payments are subject to the UPL. In fiscal year 2017, Medicaid graduate medical education payments totaled about $2 billion. The Patient Protection and Affordable Care Act (PPACA) and DSH Allotments Effective January 1, 2014, PPACA allowed states to expand Medicaid eligibility to certain non-pregnant, non-elderly individuals. PPACA also required a phased reduction in DSH allotments to states, reflecting the expectation that the number of uninsured individuals would decline—and so would hospital spending on uncompensated care. As of May 2019, there were 37 “expansion states”—those states that chose to expand Medicaid eligibility—and 14 “non-expansion states”—those that did not choose to expand Medicaid. Congress has delayed the reduction in DSH allotments several times. The reductions are scheduled to begin in fiscal year 2020. Between 2013 and 2014, both expansion and non-expansion states reported different degrees of change in care for the uninsured and Medicaid shortfall. In particular, MACPAC reported that between 2013 and 2014, the year in which most state Medicaid expansions took effect, expansion states’ uncompensated care costs for the uninsured declined by $2.2 billion (19 percent), while non-expansion states’ uncompensated care costs for the uninsured increased by $0.6 billion (5 percent). During the same period, expansion states’ Medicaid shortfall increased by $2.2 billion (36 percent), and non-expansion states’ Medicaid shortfall increased by $1.8 billion (546 percent). States Increasingly Made Supplemental Payments to Hospitals States’ use of supplemental payments has grown in recent decades, partly due to the flexibility supplemental payments provide. This flexibility is twofold: supplemental payments provide states with flexibility in financing the nonfederal share of supplemental payments, and flexibility to target the payments to specific hospitals or types of hospitals. States Increasingly Made Supplemental Payments to Hospitals, while Reducing or Freezing Hospitals’ Base Payments Total supplemental payments to hospitals have grown over time, while states’ base payments have often been frozen or reduced. Congress imposed limits on DSH spending in the 1990s, and since then states’ use of non-DSH payments has grown. Between fiscal year 2000 and fiscal year 2017, DSH payments increased about 16 percent, from $15.6 billion to $18.1 billion. In prior work, we reported that in fiscal year 2006 state Medicaid agencies made at least $6.3 billion in non-DSH payments, though the exact amounts are unknown, because states did not report all their payments to CMS. By fiscal year 2017, the amount of non-DSH payments had increased to $30.4 billion. Both uncompensated care pool payments and DSRIP programs are relatively new types of non-DSH payments, and thus contributed to the overall increase in supplemental payments. In prior work, we reported that, as of February 2017, CMS authorized nearly $38.7 billion in DSRIP spending nonconsecutively over 2011 to 2022 in four states with the largest DSRIP programs. Our prior work found that new or increased supplemental payments helped mitigate the increasing gap between Medicaid base payments and hospital costs. While supplemental payments increased, the number of states reducing or freezing base payments to hospitals has increased, in part, because states reported challenges paying the nonfederal share with state general funds. Our work found that from 2008 to 2011, across all providers, the number of states making at least one base payment reduction grew from 13 to 34, while the number of states increasing at least one base payment fell over the same period. Across all 4 years, states most frequently reported reducing base payments for hospitals. The Kaiser Family Foundation’s annual survey data shows the trend continued in more recent years. Specifically, over half of states froze or reduced inpatient hospital base payments each fiscal year from 2011 to 2018, ranging from a low of 28 states in 2011 and 2018, to a high of 39 states in 2012. (See table 1.) In a September 2018 study of five states, MACPAC found that hospitals and state Medicaid officials often prefer increases to supplemental payments rather than increases to base payments, because supplemental payments come with more predictability. MACPAC found that all five states reported reducing hospital base payments from 2007 to 2011. After 2011, all five states kept base payments frozen with no adjustment for inflation. As a result, base payments to hospitals in these states were lower in 2018 relative to other payers and hospital costs. To address the growing gap between base payments and hospital costs, states collaborated with hospitals to establish or increase supplemental payments. In the five states, supplemental payments ranged from 18 percent to 61 percent of total hospital payments. States Have Relied on Multiple Sources of Funds to Finance Their Nonfederal Share More often than with base payments, states have relied on sources other than state general funds to finance the nonfederal share of supplemental payments. For example, states may receive funds for the nonfederal share of supplemental payments through taxes levied on health care providers. (See fig. 1.) In previous work, we found that funds from local governments and health care providers constituted about 50 percent of the nonfederal share for DSH and non-DSH payments in fiscal years 2008 through 2012. In contrast, funds from local governments and health care providers constituted approximately 30 percent of base payments during the same time period. The MACPAC study of five states also found that states and hospitals preferred supplemental payments, because hospitals can track the extent to which their tax assessments are recouped through supplemental payments. In a July 2014 report, we found that the number of states relying on provider taxes increased, and that provider tax revenues were then used for the nonfederal share of supplemental payments. In particular, the total number of provider taxes increased from 119 taxes in 42 states in 2008 to 159 taxes in 47 states in 2012—a 34 percent increase. Kaiser Family Foundation data show this trend has continued. According to state survey data, the number of states using inpatient hospital provider taxes has steadily increased from fiscal year 2011 to 2018, ranging from a low of 34 states in 2011, to a high of 42 states in 2017 and 2018. (See table 2.) Supplemental Payments Allow States to Target Payments to Certain Hospitals or Types of Hospitals Supplemental payments provide states with flexibility that allows them to address states’ goals by targeting payments to particular hospitals or hospital types, such as public hospitals or teaching hospitals. States may choose to target supplemental payments to hospitals that may not have the highest uncompensated care costs. Our prior work found some states’ DSH payments were not proportionally targeted to hospitals with the highest uncompensated care costs, which DSH payments are designed to address. Based on our prior analysis of annual hospital-specific 2010 DSH data, we reported that in 30 of 42 states, hospitals receiving the largest share of state DSH payments did not provide the largest share of total uncompensated care. Moreover, our prior review of the independent DSH audits found that 41 states made DSH payments to 717 hospitals that exceeded the individual hospitals’ uncompensated care costs as calculated by the auditors, 9 states did not accurately calculate the uncompensated care costs of 206 hospitals in those states for purposes of making DSH payments, and 15 states made DSH payments to a total of 58 hospitals that either did not retain their DSH payments or were not qualified to receive them. States’ criteria for identifying eligible DSH hospitals and how much funding they receive vary, but were often related to hospital ownership, hospital type, and geographic factors. Our prior work found that 2006 DSH payments to individual hospitals varied widely, ranging from 1 cent to about $395 million. For example, California reported both the lowest and highest 2006 DSH payment amounts; the state made a total of only $160 in DSH payments to 96 private hospitals and paid $2 billion in DSH payments to 51 government hospitals. Based on our analysis of 2014 DSH audits, several states targeted DSH payments to certain hospitals and hospital types, including the following: Public hospitals: States targeting nearly all (93 percent or higher) of their DSH funding to public hospitals included Arkansas (99 percent), California (100 percent), Illinois (99 percent), Iowa (93 percent), Maine (100 percent), and Washington (97 percent). Nonprofit hospitals: Nebraska targeted 98 percent of its DSH funding to nonprofit hospitals. High-teaching hospitals: Arkansas targeted 98 percent of DSH funding to high-teaching hospitals, defined as teaching hospitals with an intern-and-resident-to-bed ratio of 0.25 or greater. IMDs: Maine makes DSH payments to the two state-run IMDs. In 2014, 18 states directed their entire IMD-designated DSH limit to IMDs. (For additional information on DSH payments to IMDs, see table 9 in app. II). Similarly, states can target UPL payments to certain hospitals. We and the HHS Office of the Inspector General have reported that some states concentrated these payments to a small number of providers. GAO and Others Have Noted Concerns With States’ Use of Supplemental Payments Our work has highlighted a number of concerns about the use of non- DSH payments from various perspectives, highlighting the need for transparent reporting, ensuring expenditures meet Medicaid purposes, and concerns regarding arrangements that shift costs from the states to the federal government. For example, in November 2012, we recommended that Congress consider requiring CMS to improve the transparency of and accountability for non-DSH payments by requiring facility-specific payment reporting and annual audits. The report noted that the annual DSH reports and audits that states began submitting in 2010 were important steps toward improving transparency and accountability for Medicaid DSH payments; however, similar information is lacking for non-DSH payments. Moreover, the report stated that the limited information available on non-DSH payments shows that a large share of these payments are paid to a small number of hospitals; when these payments are combined with Medicaid base payments, hundreds of hospitals may be receiving Medicaid payments well in excess of their actual costs of providing Medicaid services. As of March 2019, Congress has not taken any action, but CMS announced in fall 2018 that it was planning a proposed rule on supplemental payments that, if finalized, would improve transparency by requiring states to provide CMS with certain information on Medicaid supplemental payments. The agency plans to release the proposed rule for comment by fall 2019. In 2014, we recommended that CMS develop a data collection strategy ensuring states report accurate and complete data on all sources of funds used to finance the nonfederal share of Medicaid payments. Such data are needed to (1) track trends in financing the nonfederal share, and (2) oversee compliance with current limits on sources of financing the nonfederal share. CMS did not concur with our recommendation, but did acknowledge the agency does not have sufficient data to oversee compliance with the 60 percent limit on local government contributions to a state’s nonfederal share. Hospital Uncompensated Care Costs and DSH Payments Varied by State; Some Types of Hospitals Received a Greater Proportion of DSH Payments Uncompensated Care Costs Varied by State and Were Mainly for Costs Related to Treating Uninsured Patients Among hospitals receiving DSH payments in 2014, total uncompensated care costs varied by state, ranging from $5.9 million in North Dakota to $6.2 billion in New York. In the hospitals, most uncompensated care costs were related to costs to care for uninsured patients, rather than the Medicaid shortfall. For example, among hospitals receiving DSH payments in the 48 states studied: Costs related to care for the uninsured comprised about two-thirds (67.9 percent) of total uncompensated care costs for DSH hospitals. The remaining share of DSH hospital uncompensated care costs consisted of the Medicaid shortfall. In 34 states, costs for care for the uninsured exceeded the Medicaid shortfall. In the remaining 14 states, the Medicaid shortfall exceeded costs related to care for the uninsured. In 15 states, Medicaid paid hospitals more than the total cost of services provided to Medicaid beneficiaries, resulting in a surplus of Medicaid payments—even prior to receiving DSH payments. Termed a negative Medicaid shortfall, these surplus funds can be the result of non-DSH Medicaid supplemental payments. The remaining 33 states had some Medicaid shortfall. (See table 3.) No states had a surplus of total uncompensated care costs. (For additional information on state uncompensated care costs and DSH payments in 2014, see table 10 in app. II.) Across States, DSH Payments Varied Significantly in Amounts, Percentage of Uncompensated Care Costs Covered, and Percentage of States’ Medicaid Spending on Hospitals DSH payments—both the federal and nonfederal share—varied significantly in the amount that each state paid to hospitals in 2014. (See table 4 and fig. 2.) Wyoming made the smallest amount of DSH payments at about $500,000, while New York made the largest amount in DSH payments at $3.5 billion. Differences in DSH payments are largely the result of differences in the state allocations established in law. The proportion of total DSH hospital uncompensated care costs covered by total DSH payments in 2014 also varied considerably by state. Nationally, DSH payments ($18.3 billion) covered about half of DSH hospital uncompensated care costs ($36.2 billion). Nineteen states made DSH payments totaling at least 50 percent of uncompensated care costs for the states’ DSH hospitals, while 29 states made DSH payments of less than 50 percent of uncompensated care costs for the states’ DSH hospitals. (See table 5.) Four states (California, Illinois, Maryland, and Missouri) made DSH payments that exceeded aggregate hospital uncompensated care costs. (For additional information on state uncompensated care costs and DSH payments in 2014, see table 10 in app. II.) Among hospitals receiving them, DSH payments accounted for 13.6 percent of total Medicaid payments, nationally, but there was considerable variation across states. For example, DSH payments comprised 96.6 percent of Medicaid payments to DSH hospitals in Maine and 0.7 percent of Medicaid payments to DSH hospitals in Tennessee. In 40 states, DSH payments accounted for less than 20 percent of total Medicaid payments to hospitals, but in 8 states, it exceeded 20 percent. (See table 6.) (For additional information on state Medicaid payments to hospitals, see table 11 in app. II.) Deemed-DSH, Public, and Teaching Hospitals Received a Greater Share of DSH Payments Relative to their Proportion of Uncompensated Care Costs Among deemed and non-deemed DSH hospitals, overall deemed-DSH hospitals received larger relative DSH payments compared to non- deemed DSH hospitals. Deemed-DSH hospitals received 69.9 percent of DSH payments in 2014, but carried 51.2 percent of uncompensated care costs, relative to all hospitals receiving DSH payments that year. Each of the 48 states that distributed DSH payments in 2014 had at least one deemed-DSH hospital. (See table 7 for hospital type definitions.) Most of these states (36) provided deemed-DSH hospitals with a greater share of DSH payments relative to their share of total uncompensated care costs. (See table 8 for a summary of how states’ DSH payments to deemed-DSH hospitals compared to the hospitals’ share of uncompensated care costs, and table 12 in app. II for additional information by state.) In terms of ownership and teaching hospital status, hospitals that were publicly owned or teaching hospitals also generally received a greater proportion of DSH payments relative to their share of total uncompensated care costs. Among the three different ownership groups (public, non-profit, and private), public hospitals generally received a larger share of DSH payments relative to their share of uncompensated care. Among hospitals receiving DSH payments in 2014, public (36.7 percent) and nonprofit (53.7 percent) hospitals accounted for more uncompensated care costs than that of privately owned hospitals (9.6 percent). States generally provided more DSH payments to public hospitals (62.8 percent) relative to their share of total uncompensated care costs (36.7 percent). (For additional information on DSH payments and hospitals’ uncompensated care costs by ownership, see table 13 in app. II.) States distribute DSH payments to teaching hospitals at different rates, but generally provided a greater proportion of DSH payments to high-teaching hospitals (56.5 percent) relative to their share of total DSH hospital uncompensated care costs (44.0 percent). (For additional information on DSH payments and hospitals’ uncompensated care costs by hospital teaching status, see table 14 in app. II.) Nationally, urban hospitals received a greater share of DSH payments relative to rural hospitals, with 89.6 percent of DSH funds distributed to urban hospitals and the remaining 10.4 percent distributed to rural hospitals. This proportion corresponds to a similar distribution of uncompensated care costs, with 88.2 percent of uncompensated care costs among DSH hospitals carried by urban hospitals and the remaining 11.8 percent carried by rural hospitals. (For additional information on DSH payments and hospitals’ uncompensated care costs by urban/rural status, see table 15 in app. II.) For additional information on variation in uncompensated care and DSH payments by hospital category and sole community provider status, and state characteristics, see tables 16 through 19 in appendix II. Agency Comments We provided a draft of this report to HHS for review. HHS provided technical comments, which we incorporated as appropriate. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to appropriate congressional committees, to the Secretary of Health and Human Services, the Administrator of CMS, and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7114, or yocomc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Selected Bibliography This bibliography contains citations for the eight Kaiser Family Foundation reports referenced in the report. Kaiser Family Foundation and Health Management Associates. States Focus on Quality and Outcomes Amid Waiver Changes: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2018 and 2019. Washington, D.C.: Kaiser Family Foundation, and National Association of Medicaid Directors, October 2018. Kaiser Family Foundation and Health Management Associates. Medicaid Moving Ahead in Uncertain Times: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2017 and 2018. Washington, D.C.: Kaiser Family Foundation, October 2017. Kaiser Family Foundation and Health Management Associates. Implementing Coverage and Payment Initiatives: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2016 and 2017. Washington, D.C.: Kaiser Family Foundation and National Association of Medicaid Directors, October 2016. Kaiser Family Foundation and Health Management Associates. Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016. Washington, D.C.: Kaiser Family Foundation and National Association of Medicaid Directors, October 2015. Kaiser Family Foundation and Health Management Associates. Medicaid in an Era of Health & Delivery System Reform: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2014 and 2015. Washington, D.C.: Kaiser Family Foundation, and National Association of Medicaid Directors, October 2014. Kaiser Family Foundation and Health Management Associates. Medicaid in a Historic Time of Transformation: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2013 and 2014. Washington, D.C.: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, October 2013. Kaiser Family Foundation and Health Management Associates. Medicaid Today; Preparing for Tomorrow: A Look at State Medicaid Program Spending, Enrollment and Policy Trends Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2012 and 2013. Washington, D.C.: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, October 2012. Kaiser Family Foundation and Health Management Associates. Moving Ahead Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2011 and 2012. Washington, D.C.: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, October 2011. Appendix II: Data on Disproportionate Share Hospital Payments and Hospital Uncompensated Care Costs by State To conduct this analysis, we used data compiled by Acumen for the Medicaid and CHIP Payment and Access Commission. These data consist of measures from several sources. The measures used within this report were collected from state disproportionate share hospital (DSH) audits and Medicare cost reports. The 2014 DSH audits, which report data on hospital uncompensated care costs and DSH payments to hospitals, were submitted by 48 states and the District of Columbia. These data do not include a census of all hospitals, but only those hospitals that were reported in the 2014 DSH audits. As a result, these data do not capture all uncompensated care costs in each state, only uncompensated care costs for those hospitals reported in the 2014 DSH audits. Two states, Massachusetts and Hawaii, did not submit a 2014 DSH audit, because they did not make DSH payments. Additionally, while South Dakota submitted a 2014 DSH audit, we excluded the state from our analysis because of concerns about the reliability of the reported cost measures. In addition, not all hospitals reported every data element we analyzed. As a result, total uncompensated care costs and total DSH payments vary between tables, as hospitals were excluded from a given table if they did not report the characteristic described by the table. The numbers of hospitals excluded because they did not report a given data element are noted in each table for which this is the case. Likewise, as uncompensated care costs are an important focus of the report, we also excluded from all analyses 13 hospitals that did not report a value for uncompensated care costs. Appendix III: GAO Contacts and Staff Acknowledgments GAO Contacts Staff Acknowledgments In addition to the contact named above, Lori Achman (Assistant Director), Dawn Nelson (Analyst-in-Charge), Sean Miskell, and Jeffrey Tamburello made key contributions to this report. Also contributing were Tim Bushfield, Drew Long, Vikki Porter, and Emily Wilson.


Introduction In total, 59 major disasters were declared in calendar year 2018 under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq., henceforth the Stafford Act). As of May 23, 27 major disasters have been declared in calendar year 2019. In addition to these specifically declared disasters, other situations arose that caused disruption to lives, economic resources, and infrastructure. In some of these cases, a Stafford Act declaration may not have been provided or even sought. Together, these incidents, and ongoing recovery efforts from previous disasters, drove a demand for additional federal budgetary resources beyond those provided in regular annual appropriations. This demand is usually reflected in one or more requests by the Administration for supplemental appropriations after the incident (or incidents) have occurred and the need for funding is apparent. The Trump Administration did not make a formal request for supplemental appropriations for disaster assistance for FY2019. However, congressional leadership in both the House and Senate chose to initiate consideration of disaster-related supplemental appropriations at the end of the 115 th Congress. Consideration continued into the 116 th Congress, until a $19.19 billion supplemental appropriations measure was enacted in June 2019. This report provides a legislative history of the Additional Supplemental Appropriations for Disaster Relief Act, 2019 ( P.L. 116-20 ), and provides an overview of some of the issues that often arise with consideration of supplemental disaster assistance appropriations. FY2019 Disaster Supplemental Appropriations 115th Congress At the beginning of FY2019, several annual appropriations bills remained unresolved. By December 2018, five regular appropriations measures had become law; the activities funded under the remaining seven regular appropriations bills were instead funded under two continuing resolutions (CRs) lasting through December 7, 2018, and December 21, 2018, respectively. Although there had been discussions in some quarters about the need for supplemental appropriations for disaster assistance, no request for such appropriations had been forthcoming from the Administration. The debate on continuing appropriations would provide the first attempted floor vehicle for FY2019 disaster supplemental appropriations. In the Senate, a third CR for FY2019, lasting until February 8, 2019 ( H.R. 695 ) was passed by voice vote on December 19, 2018. The House subsequently considered and amended the bill the following day, adding additional funding, including $7.8 billion for disaster assistance. The amended measure passed the House by a vote of 217-185, and was sent back to the Senate for further consideration. On December 21, the Senate agreed to a motion to proceed to the consideration of the House-passed bill by a vote of 48-47, with Vice President Pence casting the tie-breaking vote. In the absence of a 60-vote majority to invoke cloture, H.R. 695 was not considered further, and the House and Senate adjourned later that day. When the second CR, providing funding for the agencies, programs, and activities covered by the remaining seven appropriations bills, expired at midnight on December 21, funding lapsed and a partial government shutdown ensued. The 115 th Congress subsequently adjourned sine die on January 3, 2019, and the 116 th Congress took office the same day. 116th Congress On January 8, 2019, House Appropriations Committee Chairwoman Nita Lowey introduced H.R. 268 , a measure that would have provided disaster relief supplemental funding and would have temporarily resolved the partial government shutdown by providing for a continuing resolution through February 8. The House took up the bill on January 16, 2019, and after adopting several amendments, passed the bill by a vote of 237-187 that same day. CBO estimated the discretionary spending in the supplemental appropriations proposal for FY2019 as $14.19 billion. The Senate proceeded to consideration of the bill on January 22, 2019, by unanimous consent. Amendments were offered by Majority Leader McConnell for Senate Appropriations Committee Chairman Richard Shelby ( S.Amdt. 5 ) and Senate Minority Leader Chuck Schumer ( S.Amdt. 6 ) that same day. On January 24, 2019, separate attempts to invoke cloture on both of these alternatives were unsuccessful. The partial government shutdown was subsequently ended through the enactment of a separate measure ( H.J.Res. 28 , providing for continuing appropriations through February 15). On March 14, the Senate returned to consideration of H.R. 268 . Cloture on the motion to proceed to consideration of the measure was invoked in the Senate, 90-10, on March 26, and the measure was laid before the Senate on March 28. On the same day, Chairman Shelby offered a substitute amendment ( S.Amdt. 201 ), providing $13.45 billion for disaster relief. Attempts to invoke cloture on both S.Amdt. 201 and H.R. 268 on April 1, 2019, were unsuccessful. On April 9, 2019, Chairwoman Lowey introduced H.R. 2157 , a supplemental appropriations bill, to provide funding for previous disasters as well as additional disasters that had occurred since the earlier House passage of H.R. 268 . CBO estimated the bill as introduced included $17.31 billion in discretionary spending, a figure which grew to $19.26 billion through floor action. The bill passed the House on May 10, 2019, by a vote of 257-150. A bipartisan, bicameral agreement on FY2019 disaster funding was negotiated prior to Senate consideration. After the Senate agreed to proceed to the consideration of H.R. 268 on May 23, Senator McConnell offered S.Amdt. 250 to H.R. 2157 as a substitute on behalf of Senator Shelby. The amendment was agreed to by unanimous consent, and the amended bill was passed, 85-8. Three attempts to approve the amended bill by unanimous consent were blocked in the House of Representatives while the body was in pro forma session during the Memorial Day recess. The House subsequently considered the bill under suspension of the rules on June 3, and voted 354-58 to approve the measure. The bill was signed into law as P.L. 116-20 on June 6, 2019. Congressional clients seeking further insight into specific programs and provisions in P.L. 116-20 may consult the analysts and background reports listed in CRS Report R45714, FY2019 Disaster Supplemental Appropriations: CRS Experts . Evolution of FY2019 Disaster Supplemental Appropriations Table 1 details the disaster supplemental appropriations proposed by senior party leadership or enacted for FY2019, organized by appropriations subcommittee of jurisdiction. The table only displays amounts for which an appropriations level was specified in bill text. It does not display amounts for which an indefinite or unspecified amount was appropriated. In addition, the table does not display the amount appropriated to Medicaid in P.L. 116-20 , because a portion of that appropriation was unspecified. Many appropriations provided in P.L. 116-20 are available until expended, which is not uncommon for disaster assistance. However, a number of supplemental appropriations in the measure have a limited term of availability, including Grant funding through the Department of Agriculture in general provisions for several purposes (available through FY2020); National Oceanic and Atmospheric Administration appropriations for "Operations, Research, and Facilities" (through FY2020) and "Procurement, Acquisition and Construction" (through FY2021); U.S. Coast Guard appropriations for "Operations and Support" (through FY2020) and "Procurement, Construction and Improvements" (through FY2023); National Park Service "Historic Preservation Fund" appropriations (through FY2022); Forest Service "Wildland Fire Management" appropriations (through FY2022); Department of Labor Employment and Training Administration "Training and Employment Services" appropriations (through FY2020); Department of Health and Human Services appropriations (through FY2021, except for the "Public Health and Social Services Emergency Fund" which is available through FY2020); Department of Education "Hurricane Education Recovery" appropriations (through FY2020); Military Construction appropriations (through FY2023); and Department of Veterans Affairs "Medical Facilities" appropriations (through FY2023). The last line of Table 1 references CBO's total discretionary score of the bill for FY2019, rather than a total of the elements in the table. Issues in Disaster Relief Appropriations Since the mid-20 th century, federal law has established a role for the federal government in supporting state and local governments in disaster response and recovery. Congress has the constitutional responsibility to exercise the "power of the purse" in making decisions on funding this role in regular annual appropriations, and through supplemental appropriations when necessary. Traditionally, such funding is requested by the Administration. The development of P.L. 116-20 was uncommon, in that the House and Senate developed this measure in the absence of a formal supplemental appropriations request from the Administration for disaster funding. In the process of exercising this constitutional authority, a number of issues frequently reemerge in congressional debate: The relative timeliness of supplemental appropriations; The proper scope of a supplemental appropriations measure; How exemptions from discretionary budget limits enable investments in disaster relief, and whether such exemptions are properly structured; Proposals to offset some or all of the proposed disaster relief spending; How quickly relief and recovery funding will be made available; How Congress can ensure that the funding provided is not spent on wasteful or fraudulent endeavors. Relative Timeliness of Supplemental Appropriations Congressional offices often express an interest in the average time it has taken for past supplemental disaster assistance appropriations to be enacted after a significant disaster. This seemingly simple question lacks a meaningful answer for a variety of reasons. There are significantly fewer supplemental appropriations measures than declared disastersâdisaster response and recovery efforts do not always require federal funding beyond regular annual appropriations. Appropriations for recovery from a disaster may come in multiple appropriations measures over the course of several years. Furthermore, a single supplemental appropriations act may meet response or recovery needs generated by multiple disasters. Table 2 illustrates this situation, showing information on Stafford Act major disaster declarations and public laws with supplemental disaster assistance appropriations, by calendar year. From the beginning of 2011 through 2018, there were 977 declarations under the Stafford Act, including 461 major disasters. Of those major disaster declarations, 76 were associated with 17 catastrophic events. In that same time period, there have been 12 public laws enacted with supplemental appropriations expressly for disaster assistanceâfour of which were enacted in calendar years 2017 and 2018. As Table 2 shows, there are many more disaster declarations than supplemental measures. Given the lack of one-to-one alignment, the time from a single incident to a single supplemental appropriations measure does not provide meaningful data for calculating an average of how long it takes after a specific disaster to get a supplemental appropriations measure enacted. The 2017 hurricane season provides an example of how the comparative rarity of supplemental measures as opposed to disasters complicates calculating the time from a disaster to supplemental appropriations, and can generate meaningless results for developing an average: The first of the three supplemental appropriations measures that directly supported response and recovery for Hurricanes Harvey, Irma, and Maria, P.L. 115-56 , included funding for the Disaster Relief Fund (DRF), Small Business Administration disaster loans, and the Department of Housing and Urban Development's (HUD's) Community Development Block Grant Disaster Recovery program (CDBG-DR). This initial measure was enacted on September 8, 2017, 14 days after Harvey made landfall, 2 days after Irma affected Puerto Rico and the U.S. Virgin Islands, and 12 days before Maria struck Puerto Rico. The second, P.L. 115-72 , was enacted on October 26, 2017, seven weeks after the first. The third, P.L. 115-123 , was enacted on February 9, 2018, five months after the initial measure. Each of these acts included a different range of programs, with the third addressing the largest range of programs. This scenario leaves some questions without definitive answersâsuch as, which supplemental appropriations bills should be associated with which disasters for calculating the speed of congressional response? It also demonstrates that comparison of these lengths of time has limited meaning in some cases. For example, the shorter time between Hurricane Irma and the supplemental appropriations as opposed to Hurricane Harvey and the supplemental appropriations is happenstance, rather than a meaningful difference in how Congress and the Administration approached the relief process. Legislative Factors in the Timing of Supplemental Appropriations The development and enactment of supplemental appropriations legislation is also affected by the same legislative rhythms that affect the timing of other legislation. Disaster assistance supplemental appropriations may move more quickly at some times than others, given the legislative environment. They may move on their own or they may be included in a variety of legislative vehicles. Continuing appropriations measures and consolidated appropriations measures (which include multiple appropriations bills) frequently serve as vehicles for supplemental appropriations toward the end of the fiscal year or soon after. For example, P.L. 114-223 , a continuing resolution for FY2017 in a consolidated appropriations act, included a $500 million supplemental appropriation for HUD's Community Development Block Grant-Disaster Recovery (CDBG-DR) program targeting major disasters declared prior to the enactment of the measure in calendar 2016. High-priority authorizing legislation may also prove to be a convenient vehicle. For example, Division I of the FAA Reauthorization Act ( P.L. 115-254 ) included a $1.68 billion supplemental appropriation for CDBG-DR, targeting areas impacted by major disasters declared in calendar 2018. An Administration request for supplemental disaster assistance can be an additional factor in the timing of the congressional consideration of supplemental appropriations. In the wake of a significant disaster, individual Members of Congress or state or regional delegations with affected constituencies may put forward supplemental appropriations legislation independent of a request from the Administration. However, unless they are crafted in consultation with majority party leadership, these measures are rarely taken up. The development of a supplemental appropriations measure destined for enactment usually begins with a supplemental appropriations request from the Administration, and a response from the Appropriations Committee or leadership. The request provides a starting point for congressional deliberations, framing the stated needs of the federal government at large for Congress to consider. For disasters that occurred in 2017, a series of three requests came from the Administration, and in each case, a supplemental appropriations measure was initiated and subsequently enacted. In contrast, as was noted above, P.L. 116-20 was enacted without a formal request by the Administration for supplemental disaster assistance appropriations for FY2019. Adjustments to Spending Limits Under the Budget Control Act for Disaster Relief The Budget Control Act of 2011 (BCA; P.L. 112-25 ), passed in the first session of the 112 th Congress as part of a deal to raise the debt limit, placed statutory limits on discretionary spending. The BCA also provided exceptions to those limits for a number of purposes. One such exception was a reiteration of a long-standing exception for funding designated as an emergency requirement. Emergencies The Budget Enforcement Act of 1990 (BEA; Title XIII of P.L. 101-508 ), and its extensions, established statutory limits on discretionary spending between FY1991 and FY2002. The BEA also provided for an adjustment to these discretionary spending limits to accommodate spending that both the President and Congress designated as an emergency requirement. During this period, this adjustment was frequently used to provide funding for disaster response and recovery. However, it was also used for a broad variety of other purposes, some instances of which sparked debate over whether the designated funding was truly for unanticipated "emergency" needs, stoking controversy in some quarters over the potential for abuse. Disaster Relief While the BCA included a similar mechanism, it also included a more limited, but specifically defined, adjustment for disaster relief, distinct from emergency funding. The BCA defined "disaster relief" as federal government assistance provided pursuant to a major disaster declared under the Stafford Act. Spending limits could be adjusted upward to accommodate funding provided in future spending bills. The allowable adjustment for disaster relief, however, is limited to an amount based on a modified 10-year rolling average of designated major disaster costs. Division O of the Bipartisan Budget Act of 2018 ( P.L. 115-123 ) modified the calculation to incorporate disaster relief appropriations designated as an emergency requirement, which had previously been excluded from the calculation. The allowable adjustment for disaster relief does not act as a limit on federal appropriations for disaster assistanceâonly on the amount of additional budget authority that can be provided pursuant to that provision. When Congress provides more funding for disaster relief than can be covered by the disaster relief adjustment in a given fiscal year, such as was the case for Hurricane Sandy and the 2017 disasters, the emergency designation may be used for such funding. Congress is not unanimous in its support of the disaster relief designation. On March 28, 2019, Senator Mitt Romney introduced an amendment to the Senate majority leadership's substitute for H.R. 268 . The Romney amendment would have eliminated the adjustment for disaster relief in FY2021. In a press statement from his office, Senator Romney said "It's time for Congress to start planning ahead for natural disasters by including funding for them in the annual budget process, instead of busting our spending limits and adding to our skyrocketing national debt." Adjustments and P.L. 116-20 Congress may also choose to provide disaster recovery and relief funding with an emergency designation regardless of the amount of funding provided with a disaster relief designation. For example, all of the funding provided in P.L. 116-20 carried an emergency designation rather than being designated as disaster relief pursuant to the BCA, even though, according to OMB, almost $3 billion of the disaster relief allowable adjustment remained available for use in FY2019 when the bill was enacted. Offsetting Disaster Relief and Recovery Periodically, Congress has weighed whether some or all of the costs associated with disaster relief and recovery should be offset by cuts to other spending. Historically, this debate has focused on whether disaster relief and recovery funding should be accounted for in the same fashion as other "on-budget" discretionary budget authority in general discussions of the budget. Since the passage of the BCA in 2011, the debate has a new aspect, as discretionary spending is constrained by statutory limits. If disaster relief and recovery spending is treated like regular appropriations with respect to the BCA spending capsânot designated as either an emergency or disaster relief, and thus not triggering an upward adjustment of the capsâsuch spending would potentially require an offset to prevent the cap from being breached and triggering sequestration. In most cases between 1990 and 2017, FEMA's DRF generally has been given a priority status for prompt funding in times of need, without offsetting spending reductions. Disaster assistance from other agencies has at times been funded through shifting resources from one program to another through appropriations language, but such activity is relatively rare. The largest single occurrence of this was in the wake of Hurricane Katrina. Nearly four months after $60 billion had been provided to the DRF in the ten days after the storm, P.L. 104-148 rescinded $23.4 billion from the account while simultaneously appropriating a similar amount to other agencies to meet disaster response and recovery needs. On April 4, 2019, during morning business, Senate Budget Committee Chairman Michael Enzi raised the issue of disaster offsets in comments on the Senate floor concerning Senator Romney's amendment to eliminate the disaster relief adjustment: I want to applaud my friend from Utah, Senator Romney, for offering an amendment that recognizes the challenge of budgeting for disasters and emergencies. Disaster relief funding must be built into our base budgets, which is why I have incorporated these costs in recent budget resolutions, including the one that passed through our Budget Committee last week. While there is no silver bullet to this problem, I am willing and eager to work with any of my colleagues who believe there is a better way to anticipate these costs. The Senate Budget Committee recently held a hearing that partially touched on ideas to better budget for disaster funding. One option is to offset emergency spending increases with spending reductions in other areas. Another option could require a dedicated fund for emergencies, similar to how some States budget for these events. I have also considered whether a new actuarially sound insurance program could appropriately assess the risk for such disasters while maintaining affordable premiums. Budgeting for emergencies and disasters is not a precise science, but I believe Congress can do a lot better than just calling an emergency and adding to the debt. Recent Consideration of Offsets Hurricane Sandy Relief Beginning in November 2012 there were calls for supplemental appropriations for Hurricane Sandy relief efforts, as well as calls for offsets. On December 7, 2012, the Obama Administration requested $60.4 billion in supplemental appropriations in connection with Hurricane Sandy, including $11.5 billion for the DRF. The preamble to the request specifically opposed offsetting the cost of the legislation, and although amendments to offset the cost of the legislation were considered in the House and Senate, they were not agreed to. During Senate debate on a supplemental appropriations bill after Hurricane Sandy, a point of order was raised against the emergency designation for $3.4 billion in Army Corps of Engineers Construction appropriation for disaster mitigation projects. A motion to waive the point of order failed to achieve the necessary majority of three-fifths of all Senators, 57-34, so the point of order was sustained, eliminating the emergency designation for that particular appropriation. This meant that the $3.4 billion for the mitigation projects would count against the discretionary spending limits imposed by the BCA, limiting the amount available for other discretionary appropriations. At the time, some observers critical of the move considered this as setting a precedent by effectively requiring an offset for disaster assistance. Others considered this as including part of the cost of disaster preparedness (as opposed to disaster relief) within the regular discretionary budget. 2017 Disasters All three of the Trump Administration's disaster supplemental appropriations requests have sought an emergency designation for the funding that would be provided in the legislation. However, unlike the Trump Administration's first two requests for supplemental disaster relief funding, the November 2017 request sought to offset some of the additional spending as well, suggesting $14.8 billion in rescissions and spending cuts and $44.4 billion in potential future savings by extending the nondefense discretionary spending limits for two additional years. Many of the rescissions and spending cuts had previously been proposed in the Administration's FY2018 budget request. No offsets were included in any of the three supplemental appropriations measures enacted after the 2017 disasters. The "Appropriate" Scope of Supplemental Appropriations One of the most frequent criticisms of supplemental appropriations measures, especially those containing disaster assistance, is that the measures include "unrelated" spending. Any attempt to make a nonpartisan determination regarding what appropriations may be considered "unrelated" in a measure that is typically responsive to a range of unmet needs presents significant methodological challenges. Long-standing colloquial naming practices have associated supplemental appropriations legislation with a particular event or problem that has drawn congressional and public attention, but the content of these measures typically goes beyond the message-friendly colloquial name. The scope, purpose, and size of a supplemental appropriations measure can be driven by one or more events, the unfunded needs such events generate, and the associated political support for considering and enacting the legislation. In the case of supplemental appropriations measures for disaster relief and recovery, these drivers often include a series of events over time. For example, in the case of P.L. 116-20 , it also incorporated responses to events occurring as the legislation was being developed and considered. Controlling Language and Supplemental Appropriations At times, "controlling language" has been included in supplemental appropriations measures to clarify the intent of specific appropriations, and counter the unrelated spending charge. This language is often included with appropriations for accounts that also have nondisaster-related purposes, in order to link the provided resources to specific activities. P.L. 115-123 , the largest and broadest of the three supplemental appropriations acts signed into law after the 2017 disasters, included a range of forms of controlling language, the most common limiting the availability of funds to "necessary expenses related to the consequences of Hurricanes Harvey, Irma, and Maria." Other controlling language of varying specificity targeted subsets of the disaster-related needs across the United States, including the following: Natural disasters Natural disasters occurring in 2017 Damage reduction in flood and storm damage in states with more than one flood-related major disaster in calendar years 2014-2017 Hurricanes Harvey, Irma, Maria, and 2017 wildfires Hurricanes occurring in 2017 Hurricane Harvey Hurricanes Irma and Maria Major disasters Oversight of funds provided in the measure Appropriations Without Controlling Language Such language generally has not been applied to accounts that have a primary mission of providing disaster assistance, such as the SBA Disaster Loan Program Account and FEMA's Disaster Relief Fund. For example, in P.L. 116-20 , the $1.65 billion supplemental appropriation for the Department of Transportation's Emergency Relief Program under the Federal Highway Administration has no specific controlling language. The absence of such specific controlling language allows agencies greater flexibility to ensure that resources are directed to meet evolving needs on short notice. Appropriations for FEMA's DRF are regularly obligated to relief and recovery efforts from multiple disasters across many fiscal years, regardless of the legislative vehicle that provided them. For example, before passage of P.L. 113-2 âthe "Sandy Supplemental"âFEMA had already obligated almost $3.4 billion from the DRF for declarations linked to Hurricane Sandy from prior appropriations. Had language been included in those prior appropriations limiting the use of the budget authority provided following past disasters, FEMA's ability to respond would have been more limited. By the end of 2017, almost twice the amount provided for the DRF in P.L. 113-2 had been obligated pursuant to disaster declarations from the stormâaid that might not have been available, had appropriations for the DRF been statutorily limited in their application. Controlling Language in P.L. 116-20 Almost all of the appropriations provided in P.L. 116-20 include controlling language. The most common references are to Hurricanes Michael and Florence, although many other incident types are cited as well. The controlling language for some of the appropriations in this measure evolved significantly over time since consideration of supplemental appropriations for disaster relief and recovery were first initiated late in the 115 th Congress. For example, as additional disaster needs arose, the appropriation provided for the Office of the Secretary for the U.S. Department of Agriculture that was proposed in Division C of H.R. 695 grew from $1.1 billion to more than $3 billion in P.L. 116-20 . The controlling language changed to broaden the potential application of the assistance as well (additions are shown in bold ): "for necessary expenses related to losses of crops (including milk, on-farm stored commodities, crops prevented from planting in 2019, and harvested adulterated wine grapes ), trees, bushes, and vines, as a consequence of Hurricanes Michael and Florence, other hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms, and wildfires occurring in calendar years 2018 and 2019 under such terms and conditions as determined by the Secretary." Timelines for Obligation Once Congress appropriates funding for disaster relief and recovery costs, the timeline for when that funding is used varies significantly from program to program. Comparison of these timelines in an effort to assess program efficiency requires an understanding of differences in mission and program structure to ensure assessments are made in context. For example, within relief provided through the DRF, some costs are borne up front, such as emergency protective measures and much of the individual assistance program, and funding is obligated and expended relatively quickly. Other costs incurred by state and local governments are reimbursed by the federal government after the work is completeâprojects to restore major infrastructure often follow this model and can take longer to obligate and expend the appropriated funding (e.g., FEMA's Public Assistance Grant Program). Other redevelopment funds may take time to be obligated as eligible state and local governments must develop a plan and have it approvedâthis process cannot begin until the funds are provided to the program and official announcements of the grant competition process are made (e.g., HUD's Community Development Block Grant Program). Because of these varying and extended timelines, disaster recovery funding is often provided without an expiration date. However, appropriations provided for operational costs, damage to facilities, and specifically targeted grant programs with a limited purpose may be provided with a limited term of availability. Oversight of Spending Concerns about waste, fraud, and abuse exist for a variety of federal programs, but supplemental disaster relief often receives special attention due to the fact that it is unusual, highly visible, provided in chaotic situations, and meant to address pressing needs. The 2019 disaster supplemental appropriations include more than $27 million in appropriations specifically for audits and oversight efforts, including $10 million for the Government Accountability Office (GAO), as well as transfers and set-asides of more than $21 million. The federal government has encountered challenges in effectively tracking some federal disaster relief spending. In September 2016, GAO released a report on disaster assistance provided by the federal government over the 10-year period from FY2005 through FY2014. GAO analysts attempted to survey disaster relief provided by 17 federal departments and agencies, and although they were able to identify over $277 billion in obligations for disaster relief provided over that period, obligations were not separately tracked for all disaster-applicable programs and activities. GAO noted in the report that At least 5 federal departments and agencies reported that some disaster assistance programs or activities are not separately tracked because spending related to these activities is generally subsumed by a department's general operating budget or mission-related costs. For example, U.S. Coast Guard officials stated that most of the agency's disaster-related costs are associated with maintaining a constant state of readiness to immediately respond to disaster and emergency incidents, which is funded from the U.S. Coast Guard search and rescue appropriation and is not separately tracked. Similarly, the Army has deployed personnel in anticipation of a possible disaster event, even when FEMA has not requested the support. If a disaster does not occur or the activity does not result in a FEMA mission assignment, the Army will not be reimbursed for prepositioning personnel or assets in anticipation of an event and therefore may categorize the expenditure as training in the event of a disaster. Another 4 federal departments and agencies reported that obligations and expenditures specific to disaster assistance activities are not tracked or cannot be reliably estimated because there is no requirement for state or other recipients of the financial support to indicate whether or how much of the funding or assistance is used for disasters. Placing consistent reporting requirements on agencies providing assistance through disaster-applicable programs would be one way to obtain a clearer picture of precisely how much the federal government is spending on disaster relief and recovery. Such reporting requirements could include pass-through requirements to state and local governments that receive the funds to provide contract and subcontract data to the providing federal agency. This could help inform budgeting decisions, and determine if a particular program is providing fewer resources than anticipated to its nondisaster missions. On its own, however, such information cannot provide an answer to questions of whether such funds are subject to waste, fraud, or abuse. Answering such questions requires detailed analysis of the individual programs and activities funded, how they complement or duplicate other assistance programs, and whether they are providing the assistance Congress intended. On February 2, 2018, OMB issued a memorandum to all federal chief financial officers and budget officers about new Administration guidelines for tracking emergency funding and disaster relief funding. Under these guidelines, agencies will be required to track these resources, starting with the first of the three 2017 disaster supplemental appropriations, by applying a special accounting code to those resources. It remains to be seen if the FY2019 supplemental appropriations will be monitored in a similar fashion. Tracking Hurricane Sandy Funding Prior to 2017, the last time Congress attempted to track the use of a large amount of supplemental appropriations was in the wake of Hurricane Sandy. At that time, a provision of P.L. 113-2 specifically authorized the Recovery and Transparency Board (RATB) to "develop and use information technology resources and oversight mechanisms to detect and remediate waste, fraud, and abuse in the obligation and expenditure of funds" provided in the act. Pursuant to this authority, the RATB developed a website containing quarterly financial reports, a map of where contracts had been awarded, and other spending summaries under the Disaster Relief Appropriations Act, 2013. The RATB had its mission extended and funded by Congress for FY2015, but its authority lapsed at the end of that year and it shut down. The Department of Housing and Urban Development (HUD) established a Program Management Office (PMO) in February 2013 to monitor funding flows for Hurricane Sandy Recovery. The office coordinated its efforts with the RATB and provided public information on the status of funding as reported by the agencies. As of November 2014, the responsibilities of the HUD Sandy PMO were transferred to FEMA's Office of Federal Disaster Coordination (OFDC). One potential issue is that it is not always straightforward to compare the information provided by different agencies. The conclusions that might be drawn from data gathered by the RATB and the PMO were potentially limited by the fact that the agencies reporting their data did not use a consistent methodology. For example, while some agencies reported specifically on the resources provided by P.L. 113-2 , FEMA provided information on all obligations for Hurricane Sandy response and recoveryâthose funded by previous appropriations as well as those funded by P.L. 113-2 . This difference meant the FEMA-reported data were not comparable with those of other agencies or departments.