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![handle is hein.gao/gaocrptatrt0001 and id is 1 raw text is:
_ Accounta ty ntgrty- Reliabilty
Higlights
Highlights of GAO-06-860, a report to
congressional addressees
Why GAO Did This Study
Hurricanes Ktrina, Rilt, and
Wilmal (thle Gulf Coalst hurricaneis)
caused mlore thamn $11 bS illionl inl
estimatted pr]opertly daimges alcross
the GulfC'oatst region in 2005. The
Smlall Business Admiinisitaion
(SBA) helps indiviuals and
bu sinlesses recoveor froml disasters
t hroughil its Disalster Loanl Progirm.
GAO initiated wvork to deterinle
how\ well SBA p)rov ided victimis of
the Gulf' Coast hurri.canles with
tielissistaince. This replort, the
first of tw\No, focuse's pr1imarlily onl
the Disalster Credit aagmn
Sy*steml (DCMS) and disalster loanl
priocess. Here, GAO eva lutei i s (1)
whait affected SBA's ablility\ to
pr~ovide tily diase asitac
anld (2) a1ctions SBA took after- the
disalsters t o im-lprove its' re(sp~onse to
disa1ster victimls. In conductingc this
sItuidy GAO anamlyzed data~ on loanl
applaionls and alssessed key\
astsl-I, of SBA's aicquisition aind
ilementatcll~lion of DCM'XS.
Wa r A ecommends u cin
includingc rea;ssessingo DCMS's
ma ximluml user- caa ibsed onl
suich t hingis as lessonis lealrned froml
the Cuff, Coast hurricanells a. review
of informina valal fr-oml
cata~strophel risk mnodeling firmns
anld disaster simuitlations, anld
reclated costI conlsiderationls. In
commeintilS on~ ha af of t his rep~ort,
SBA gener-Al agreed witl our
recommendat0.1ions butl satid mlorec
credit Should haebeenl give t'11o its,
improve-ment efforts.
www.gao.gov/cgi-biri/getrpt?GAO-06-860.
To view the full product. including the scope
and methodology. click on the link above.
For more information. contact William B.
Shear at (202) 512-8678 or shearw~cgao.gov.
SMALL BUSINESS ADMINISTRATION
Actions Needed to Provide More Timely
Disaster Assistance
What GAO Found
Although DCMS provided SBA with a number of benefits, several factors
affected SBA's ability to provide timely disaster assistance to victims of the
Gulf Coast hurricanes. First, the large volume of applications SBA processed
greatly exceeded any previous disaster, including the 1994 Northridge
earthquake-the largest single disaster SBA previously faced. Second, SBA
primarily used this earthquake as the basis for planning the maximum user
capacity for DCMS and did not consider information available from
catastrophe risk modeling firms and disaster simulations, such as the
likelihood and severity of damages from potential catastrophes, to help
predict the expected application volume from such events. SBA's limited
planning contributed to insufficient DCMS user capacity, which restricted
the number of staff that could access the system and process the large
volume of applications in a timely manner. SBA also did not receive the
correct computer hardware from its contractor, and the agency did not
completely stress test DCMS before implementation, which contributed to
the system instability, outages, and slow response times initially experienced
by SBA staff. As a result of these and other factors, SBA faced significant
delays and backlogs in processing loan applications, as depicted in the figure
below. This backlog peaked at more than 204,000 applications 4 months after
Hurricane Katrina. As of May 27, 2006, SBA processed applications, on
average, in about 74 days compared with its goal of within 21 days.
Some of the actions SBA took after the Gulf Coast hurricanes helped to
improve its response to disaster victims. For example, SBA addressed
system-related issues by increasing the number of users that could access
DCMS, and it plans to further increase the system's maximum user capacity.
SBA implemented other initiatives that had limited success. For example,
SBA made only a few loan guarantees under its Gulf Opportunity Pilot Loan
Program for small businesses in communities affected by the disasters. SBA
would benefit by expediting its planned business process reengineering
efforts to analyze ways to more efficiently process loan applications, such as
implementing a secure Internet-based application feature for home loan
applicants.
Backlog of Applications in Loss Verification and Application Processing
Applications (in thousands)
250
1 2 3 4 5 6 7 8 9
Months following Hurricane Katrina
Total - Loss verification ............ Application processing
Source: GAO analysis of SBA data.
.United States Government Accountability Office](ViewImageLocal?handle=hein.gao/gaocrptatrt0001&div=1&collection=&method=preview&ext=.png&size=3)