Red Cross Targeted in Federal Oversight Legislation

September 16, 2015       Mark Hrywna      

Disaster assistance would benefit from oversight through regular federal evaluation so Congress should consider creating an independent, external oversee of the American Red Cross, according to a new report by the Government Accountability Office (GAO).

The 57-page report released today was in response to a request by Rep. Bennie Thompson (D-Miss.), ranking member of the House Committee on Homeland Security, to examine the agency’s involvement in disaster relief. The Washington, D.C.-based, federally-charted nonprofit has come under fire in recent months after stories by NPR and ProPublica have raised questions regarding its effectiveness in response to disasters such as the 2010 Haiti earthquake and Hurricane Sandy in 2012.

Evaluation of the Red Cross could be performed by a federal agency such as Department of Homeland Security (DHS), by an Inspector General (IG) office such as the DHS IG, or by a private research firm under contract to a federal agency, according to the report’s recommendations.

Thompson also has introduced legislation today that would require audits at least once every three years by the Treasury Inspector General for Tax Administration (TIGTA), Homeland Security Inspector general, and USAID Inspector General; annual reports by DHS to Congress about its partnerships with the Red Cross; and the Red Cross to provide information on its website about how to contact the Office of the Ombudsman.

“While coordination in response to disasters is clearly established in written agreements, the Red Cross’s role in recovery has not been as clearly defined up to now,” the report said. A 2010 memorandum of agreement with FEMA laid out 18 tasks for which Red Cross was responsible, but only three related to recovery, according to the report. The two organizations signed a revised agreement with additional details on coordination during recovery that was executed on July 28. The Red Cross is implementing a more consistent, standardized approach to both recovery and preparedness.

“Although the Red Cross plays a significant role in domestic disaster relief, the federal government does not conduct regular ongoing evaluation of its disaster-related services,” according to the report. Several agencies interact and oversee the Red Cross to an extent, but in different ways, including the Internal Revenue Service (IRS), Federal Emergency Management Agency (FEMA), and Department of Defense, among others.

The need for “independent evaluation of the Red Cross’s performance in providing disaster assistance takes on added significance given previous questions raised by members of Congress, GAO and others about” its ability to respond effectively to large disasters.

While Red Cross has some internal evaluation processes in place, such as action reviews and surveys of state emergency managers and other stake holders, those internal evaluations are typically not made available to the general public.

“The absence of regular, external evaluations of its disaster services that are publicly disseminated could affect the confidence of both the donating public and the federal agencies that rely on the Red Cross,” according to the report’s authors.

In response to the GAO report, Red Cross issued a statement that it “confirmed” that the organization has “well-established plans in place to coordinate with FEMA in responding to disasters,” and that coordination is “consistent with several best practices that are ‘benefitting’ our coordination efforts.”

The agency went on to list “several existing mechanisms in place to evaluate disaster response that provide considerable oversight,” including several mentioned in the report, such as the Office of Ombudsman, IRS, and Department of Defense. The Red Cross also said it participates in “regular after-action reviews convened by federal, state and local government partners,” and receives “real-time feedback during disasters from local and state emergency management.”

The Red Cross has had a federal charter since 1900, which most recently was amended in 2007, modernizing its governance structure. Among the changes were reducing the size of the board from 50 members to between 12 and 20 members and providing for the election of members at the annual meeting. It also required the agency to establish the Office of Ombudsman. Duties of the ombudsman are set by the Red Cross and the post reports to the Red Cross CEO and board. The ombudsman also is required to report annually to Congress “any trends and system matters it has identified as confronting the organization” but does not have investigative authority.