Think of me and us as a resource to help navigate that. What i brought today for the purposes of an introduction, im glad to answer any questions about our body of work but i highlights pages to two testimonies and theyre on the table over there. One was a testimony in may of 2010 before this committee, and it was based on a report that came out in july of 2009. And we were asked to look out how much progress had sba made in implementing the Small BusinessDisaster Response and improvement act of 2008. Its a mouthful. Ill now call it the 2008 act. Very important piece of legislation. It was a good way to look at progress sba had made from basically the problems that incurred during katrina and rita and it was also what remained to be done. The other thing we did was extensive fieldwork looking at the response of the 2008 disasters, which were of a smaller magnitude of katrina or sandy. It was the midwest floods and hurricane ike in particular where we did extensive fieldwork and we could see well how sba had done and the response had improved, so thats one, you know, data point that i want to provide through that testimony. Then the other document is last month we testified before house Small Business on a response to Hurricane Sandy, and it was based on a report and updates the report. The report was issued in september of 2014. Here we looked at obviously a much larger disaster, and looked at the response. We saw certain deficiencies in terms of timeliness and deficiencies in terms of following through with plans instated plans to initiate other provisions of the 2008 act. And in particular three loan programs that would operate through private sector lenders, and so ill just to close up this statement and look forward to questions is that our report in 2014 on sandy had two recommendations. One was to better account for the early influx of applications due to greater use of electronic reporting, electronic applications. The other one had to do with really get do a documented evaluation of lender feedback on in particular the immediate disaster Disaster Assistance program. To really evaluate lender input and to move forward with a pilot. And this is something that goes back a number of years. Its one that it is important in terms of developing a capacity, at least testing how well a program of that nature could work in a future disaster. So for now, i say, again, thank you for the invitation. I look forward to the discussion. Great. Thank you very much for that body of work. Next well hear from andrea deadwyler. On behalf of our inspector general, i represent the dedicated men and women of the sba. The sbas Disaster Assistance program is a high risk program. I believe our investigations and audit recommendations are having a positive impact on the integrity of the program. The Disaster Loan Program plays a vital role in the aftermath of disasters to assist with rebuilding disasterdamaged properties. Following Hurricane Katrina the sba released several reports. Sense the gulf coast hurricanes sba hazardss addressed many of our recommendations. Sba controls to prevent duplication with huds. Regarding dupelication of benefits, our 2010 audit provided controls. As a result of our audit, hud and sba improved internal controls. When we conducted our audit in 2015, we found that controls were adequately designed and generally working as intended. Sba implemented an electronic application for Hurricane Sandy survivors. However, the office of Disaster Assistance did not anticipate the surge in workload, which resulted in a backlog of over 29,000 loan applications. Excuse me. Consequently the agency implemented expedited process for home and disaster loans based on Credit Scores and loan amount. But the expedited process for Business Loans did not result in any time savings. We have identified challenges with sbas ability to meet disaster performance goals. Contributing factors includes sbas need to significantly increase Staffing Levels especially in response to a largescale disaster as well as a need to mobilize and train staff quickly. Sba reported an improper payment rate of 12 in its disaster program, which is a significant reduction from the 18. 4 reported in the prior year. The reduced volume of approved disaster loans for one went from 2014 from 332 million compared to the 2. 8 billion in approved loans in 2013 primarily due to Hurricane Sandy. They also implemented multilayer reviews at a Distribution Center to identify proper payments. However, we also note that the improper payment rate continues to exceed the 10 level. Hence, we consider this an ongoing challenge. In closing, the oag acknowledges the challenges that the office of Disaster Assistance faces in balancing its mission to provide loans with the responsibility of ensuring prudent loan practices. Due to the impact and risk associated with the Disaster Loan Program, we will continue to emphasize these programs as a priority in our office. Thank you for the opportunity to participate today. I look forward to your questions. Okay. Thank you very much. Next is tee rowe. Thank you mr. Chairman. Appreciate the opportunity to be here to discuss sbas Disaster Assistance program. Im tee rowe the president of americas sbdc which suspects the Small Business development centers. When a disaster hits, were there. Were there because its our neighborhood, its our clients, its our community. And in every case and particularly with katrina, sbdcs have learned a lot. Our past state director in louisiana did an amazing job with our committee on Disaster Recovery helping people share best practices and really tear down our effort to coordinate with sba and improve the response. And i have to say from my personal experience during katrina, i was head of Congressional Affairs at sba, so i was there in the trenches with james. Maybe not as deep in the trenches, but i saw what sba went through and how theyve come forward. And my members of the sbdcs have seen that same change. In every disaster people are overwhelmed. And at the sbdcs, we pool together as a family to try to share resources to try and bring volunteers from other sbdcs to help set up the Disaster Recovery center. Because when you set up a Disaster Recovery center, we work with sba now. Theyre temporary because theyve got to move from place to place, so theyre there for about a week, and were still there at the sbdc helping the Small Businesses. And that process has gotten so much better. Our new york state director cant say enough great things about the work that james has done. I just was on a call with our southeast directors so theyre kind of the disaster specialists just because of the way Mother Nature works. And they truly appreciate both the changes that sba has implemented but also the changes in your bill because youre removing some roadblocks to the cooperation we try to achieve. For instance the ability of an sbdc to operate across state lines. When things were started i think when the legislation was written, it just kind of forgot about disasters. Your bill does a great thing in letting us in disaster situations send folks from across the country to help out. Its a great improvement in the way sbdcs will be able to assist Small Businesses. And i would like to talk really quickly because ms. Bennett mentioned something very important. While were there at a Disaster Recovery center and were helping people work through their disaster loan applications, were helping them retrieve information put their lives back together. Because as mr. Paulsen said the Small Business is the hub of the community, and what weve been focusing on more and more and we actually have two specialists in florida who work all throughout the gulf region. Theyre recovery specialists, but theyre really resiliency specialists. And we work so hard to make sure that the clients all across the country are prepared to recover. Because without that preparation preparation, youre just that many more steps behind. Now, ill just quickly sum up that the last thing we really appreciate section 102 of your bill, the additional awards to sbdc. Weve found in sandy how helpful that additionally fund was because even still three years after, were still doing recovery work. Its vital to us to be able to provide that longterm assistance in a recovery situation. With that, ill finish up and thank you so much. Great. Thanks to all of you for the comments. Now, we just want to have a open conversation following up on all these topics, so theres no particular format. Please, jump in whenever you have a relevant thought. My questions and concerns are probably naturally going to focus more in light of the katrina experience my experience, and also the Small Business side of things since were in the Small Business committee. I guess this thought or question is mostly for sba, fema, red cross, and sbdcs. How is your response different for catastrophic disasters whatever that means, sandies versus other events . Do you have a different rule book, a different playbook and where roughly is that line that you would distinguish between catastrophic disasters and other events . Anybody want to take a stab at that . I can go first and then i look forward to hearing what fema and the American Red Cross says. We are much more coordinated today than weve ever been before, so the major disaster declarations are handled by fema. Red cross is always around in every major disaster. Weve been on the ground. Well stay there for 60 days. Generally, we were there for two months or as long as theres a need from that perspective, but were well coordinated in our Recovery Centers where theres a Disaster Recovery center for the major disaster re erer declarations. Coordination between our agencies, we hiccupped a lot back during katrina rita wilma. Today, we have the framework in place. It may look like a larger bureaucracy, but its a much more efficient process. When gerilee and i first met we were discussing the difference between response and recovery. We figured that out now. Ten years later, were Mature Organization when it comes to these are the roles and responsibilities of the responders and the recovery players. Now we have Disaster Preparedness 3r5igsprepared ness operation teams so we can continue as we get in and out of the disaster the longer term effect from that perspective. Okay. Fema . Gerilee, you want to take a stab . Yes. Thank you, mr. Chairman. I would say we dont have a different playbook for a catastrophic disaster because its really important we have the basic plans and systems and teams in place for all disasters in that they practice on the smaller disasters and it exercises what they would do if there were a catastrophic disaster. If we designed things that we would do things much differently in a catastrophic disaster, we wouldnt be as ready because we havent practiced it that way. We have some plans for very specific highrisk scenarios that we Work Together clab collaboratively with our partners, so we do do that but those plans are really very much based on the systems and teams and all hazard plans that we have in place for all scenarios. Okay. Russ . The commitment we make for people to have a warm safe, dry place to go with their family, food to eat, someone to talk to about whats next doesnt change. We provide services beyond that in regular, big disasters. After sandy for example, we did case work with individual families trying to help bridge gaps things that the fema programs cant cover due to statutory limitations. We would try to bridge gaps. That one on one casework assistance is very labor intensive and long and something we probably wouldnt get to quickly after a catastrophic disaster. We dont have a number in mind for whats the difference between a catastrophic and a regular, big disaster, but i would say when something is like katrina, ten times bigger than anything weve dealt with before, that counts as catastrophic. Sandy was a big disaster. Certainly, if you go through any disaster, its catastrophic for you, but regular systems worked for that scale of a disaster. Okay. Anybody else . Well, i just echo what russ said that any disaster is big for you. At an sbdc level the playbook doesnt necessarily change center by center in a localized disaster. Where it becomes a problem is when you do get the larger disasters and you need the extended resources for the extended recovery. You know, at sbdc, you can absorb it on a localized level understanding that youre going to have to do that much extra work with the businesses that have been affected in your area as they recover. But when you run into Something Like sandy where, i think, sba had, what, 600,000 applications or 400,000plus is what we had in katrina sbdcs are literally working with hundreds of thousands of businesses in helping them with longterm recovery . And at the same time, while a year or two later, everybody thinks, oh, the disaster is over that was then, its still affecting the community. Its still affecting the businesses. Let me jump in one. One of the reasons i asked this question is i know the gao concluded about sandy that the sba didnt surge operations quickly enough, didnt sort of realize the scope quickly enough, so thats part of the reason im asking. Is there a metric where you get it immediately that this is another category and theres a surge that starts that would not be required in lesser disasters . So in response to the gao question, one of the things we did postdisaster, we always do an after action report. Weve shared that with your staff as far as what weve done. In regards to how we staffed up, we had 800 people on the roles. We went up about 200, 300 people as a result of the louisiana hurricane that predated sandy. We ended up with 2500 employees. Staff wasnt the issue. Its just because we didnt put them on board fast enough. At katrina, we didnt have a staffing strategy. We had 800 employees. We hired 6,000 employees in six months. Postkatrina, we have 2,000, 3,000 reservists that are on call, that are available. The timing of how quickly we on boarded the staff, that was really the issue internally. We were prepared to on board much quicker. The difference between the electronic loan application coming in sooner versus the traditional paper intake curve we tripped up there, but weve addressed that. Weve changed our sop. Weve changed an updated our Disaster Preparedness plans internally, so that shouldnt be an issue, if we have any type of disaster activity. The staff is available. Weve even taken another step where we have a contract in place that will supplement if we go beyond that 3,000 level employee where we can have them fill any gaps that we may have across the disaster program. Okay. Go ahead. Sure. It was sandy was obviously the biggest disaster since katrina, so it was a much bigger task then lets say the 2008 disasters. James said it wasnt a matter of having the planning in place to take into account the electronic applications and the speed of them coming, so that was definitely part of it and part of the delays. Where were at now is there have been changes at what we call at sba the playbook which is one of three major elements of the disaster process. Theres the Disaster Recovery plan. Theres disaster forecasting models. Weve seen a change to the playbook. James and i have talked about this and a liaison at sba. We need a little bit more assurance from them. It might just be talking us through the steps as far as how do these different pieces fit together to make sure that if there was another major disaster like sandy or that magnitude that the process would work out differently and that sba would be more ready to respond. Okay. Let me move to a slightly different topic, which was a huge frustration of mine after katrina and continues to be in general, which was that i saw in so many cases federal response, roof contracts debris removal, et cetera, focus on National Mega firms. And local Small Businesses were virtually completely left out. If they had any participation, it was literally five subcontracting layers down getting pennies on the dollar. As all of you acknowledged in various ways in your comments a big part of recovery is local Small Business recovery, right . So heres a huge opportunity to drive that through this work, debris removal, blue roofs whatever, and i saw so many cases after katrina where the locals again either were forgotten or what are you doing differently since katrina to involve far more local Small Business . I guess thats primarily fema, but certainly involves others as well. Gerilee, you want to start . I can get back to you later with specific statistics, but i can describe to you the approach changes we are taking. In order to be able to get in fast and provide that surge, we do still rely heavily at fema on standby contracts and on interagency agreements where we provide funding to the army corps of engineers. But i think what were doing differently in approach is we have those and we dont provide the full scope for the full scope of the disaster upfront. We asked that they get in and do early work and then transition to local Business Contracts as soon as possible, so we can get you more details about how that works and statistics afterwards. Okay. Anybody else . So postkatrina,