Getting reimbursed--what hurricane Katrina taught us: called upon to aid the Department of Homeland Security in hurricane recovery operations, service components responded admirably. Then came the hard part: getting reimbursed.

My boss likes to joke that the first important lesson he learned in leading the Financial Manager (FM) Katrina Working Group was not to hold an off-site during the two weeks following a major natural disaster. After all, it was during our September 9, 2005, off-site that he received word that he had been put in charge of the Katrina working group. The danger associated with being out of the room when a Pentagon working group is being staffed was just one of many lessons learned from Hurricane Katrina.

Although we remember how Hurricane Katrina unfolded, it is always useful to put things in perspective by looking at the timeline of events. This is particularly true because of a perception that a national response didn't occur until several days after Katrina had come ashore.

In reality, on August 24, 2005, even before Katrina was classified as a hurricane, the U.S. Northern Command (NORTHCOM)issued warning orders to emergency preparedness officers and to the National Guard in the states expected to be affected. On August 25, the National Hurricane Center upgraded Tropical Storm Katrina to Hurricane Katrina, and it slowly churned its way through the Gulf of Mexico. On August 29, Katrina hit the Gulf Coast, and on the following day the new Department of Homeland Security National Response Plan was triggered. Within a day, the Department of Defense (DoD) was providing extensive ground, air, and sea support in and around the areas affected by Katrina. Within a week, over 70,000 active and guard personnel, 20 U.S. ships, 360 helicopters, and 93 fixed-wing aircraft were engaged in hurricane recovery operations.

As the DoD leaned forward in its response, various offices began working the financial processes and mechanisms needed to support this activity. On September 9, nine days after the full-scale DoD hurricane recovery support began, a decision was made that the scope and visibility of this effort necessitated an agent to coordinate the financial responsibilities specifically related to DoD's reimbursable actions in support of FEMA (Federal Emergency Management Agency). The Air Force, as NORTHCOM's Executive Agent, was given the lead of the Joint Working Group, subsequently designated FM-Katrina. Mr. Richard Gustafson was given the reins and members from all of the service components, the Defense Finance and Accounting Service (DFAS), the Defense Logistics Agency, the Joint Chiefs of Staff, the Office of the Secretary of Defense (OSD), the U.S. Transportation Command, and NORTHCOM

FM-Katrina was a temporary construct and most likely unique, as it was necessitated because DoD policies and procedures governing financial responsibilities related to DoD-provided civil support (CS) were out of date and in flux. Among other things, guidance does not fully reflect new organizations, changed organizational structures, and evolving reporting relationships that were established and/or changed post-9/11. Although DoD expects that policies and guidance will be updated before the next hurricane season, the general lessons discussed next will remain pertinent for the foreseeable future.

Determine the Policies and Procedures

One clear lesson: The flexibility offered by the Defense Emergency Response Fund (DERF)is gone. Soon after the formation of the FM-Katrina working group, it was determined that the DERF--originally established to address the need for centralized financial visibility related to CS-reimbursable transactions--was no longer solvent and, therefore, not usable. As a result, the interim policies and procedures that were implemented to guide the funding, billing, reporting, and controls related to the reimbursable funding for DoD CS may need to be used for the foreseeable future.

Although FM-Katrina has recommended the establishment of a Defense support of civil authorities fund that can be used in anticipation of reimbursable orders from federal, state, or local authorities, there is no certainty that the Department will request or that Congress will appropriate such an account.

Therefore, when planning for future hurricanes, don't assume reimbursement for your unit. The Stafford Act provides the authority for active duty forces to provide disaster assistance to FEMA, but it does not require reimbursement for this support. Although DoD is being fully reimbursed for the reimbursable support provided during the 2005 hurricane season, future reimbursement is not guaranteed.

Whether you are applying for reimbursement or simply recording costs incurred during your CS efforts, OSD will want to see your numbers. So document early. Start segregating costs occurring outside your normal mission areas. Don't wait for costing and/or reimbursement guidance because by the time it arrives, the event may already be over for your unit. Documentation will be critical to reimbursement justification, supplemental requests, etc.

Also, to be reimbursed, you'll need to have an assigned CS mission and know what it is. Before commencing specific CS efforts, DoD receives and approves Mission Assignment (MA) requests that are then cited on the applicable DEPORD/EXORD (deploy order/execute order). To receive reimbursement, you must then bill against the specific approved MA. This process can result in a wide range of management challenges. Some MAs are very small and detailed; others are extremely broad and include multiple DoD service components and agencies. Because there is no standard process or mechanism to execute the reimbursable authority related to MAs, it is difficult from a corporate standpoint to track execution against specific individual MAs. It has been recommended that future MAs be requested and issued based upon broad functional categories, such as search and rescue. However, there is no guarantee that FEMA will adopt or agree to this recommendation.

In addition to the other costs incurred during CS operations, OSD will expect the service components and agencies to report the costs associated with reconstituting their forces after the return from providing CS. Review your organization's policy on reconstituting or recapitalizing your forces and ensure that those calculations are transparent in advance.

Know Who's in Charge

We also learned important lessons regarding lines of authority. The new sheriff in town is NORTHCOM, so get to know them. As the combatant commander for North American operations, NORTHCOM is responsible for coordinating all DoD CS activities, including the tracking of resources against approved MAs. Also, DFAS, with its clear roles and responsibilities stemming from its organizational mission, is key to ensuring that reimbursable expenses are collected, tracked, and billed properly. Use your client executive early and often.

Once you know who's in charge, don't wait for them to come looking for you. Some organizations providing CS did not become involved in the FM-Katrina working group until several days or even weeks after the working group was formed. In most cases this occurred because the organizations were not aware of the working group and their need to participate. Organizational responsibility in the event of reimbursable CS efforts must be clearly delineated and promulgated in local policy and procedural guidance. If lines of responsibility are not already in place, organizations should establish them, showing a clear tie to NORTHCOM for CS operations within their operations and budget directorates.

Also, be prepared for the auditors. DoD-provided CS can be very extensive and will enjoy a large amount of political visibility. Auditors from both inside and outside DoD became involved in reviewing processes and actions resulting from Katrina. It is important to make the process transparent to the auditors and to involve them early in the process, making it easier for them to perform their responsibilities. It will ensure that any questions or issues can be noted and addressed early in the process.

To do things right and help prepare for the auditors, make friends with the lawyers. Financial management of DoD-provided CS can involve legal issues that are not always readily apparent. Involve your legal staff particularly if contemplating new policies and procedures

Get It Right

To achieve success as a financial manager faced with a natural disaster, first read the book even if it's out of date Many of the key players involved with FM-Katrina had little or no awareness of the pre-existing guidance at the time the CS related to Hurricane Katrina began. As a result, financial policies and procedures developed by FM-Katrina were largely done from scratch. Although existing guidance was dated, subsequent reviews showed that portions of it could have been incorporated into the interim guidance prepared by FM-Katrina. At the very least the guidance could have provided a useful learning resource.

Create detailed spreadsheets Our systems need to be able to talk to each other across the enterprise in a data-centric environment; but until they do, semiautomated reports and individually prepared spreadsheets will still be a primary means of gathering and reporting financial information related to DoD-provided CS. The need to address the requirement for transparent, actionable data resulting from scenarios like the Katrina recovery support effort has already been cited by OSD as one of the major imperatives for the implementation of the Standard Financial Information Structure as the common business language of DoD.

Finally, just because you haven't done it before doesn't mean it isn't your job. Prior to Katrina, most of the experience related to DoD CS resided in the Army. Thus, the level and depth of the cross-service response to Katrina was unprecedented. Because this type of response is anticipated to be the norm for future events, all service components and agencies must understand and train on their CS roles and responsibilities regarding financial management well before the next warning order is issued.

Faced with a natural disaster, leaders need transparent, actionable information, including accurate, timely, and reliable financial information. New systems will help move us toward this goal. But systems are only tools, and ultimately we will reach this goal only if we also address our processes and culturally engrained behaviors.

Additional Lessons Learned

Some of the most important lessons learned by FM-Katrina had little directly to do with financial management but are critical to success in these types of events.

Communicate, communicate, communicate. Perhaps FM-Katrina's most important function was to act as an information and a personal contact clearinghouse. Many of the key players were working with each other for the first time; focused communication was necessary to address the expectations and needs not only laterally among the various organizations and outward and downward to the performing activities, but also upward to the organization's policy makers and leaders.

* As soon as DoD response efforts begin, establish a collaboration-capable Web site that can be accessed by all stakeholders.

* Hold regular meetings/teleconferences (three to five times a week), and ensure that all key stakeholders are engaged from the outset.

* Consolidate the number of reports and reporting mechanisms, and develop a single source of authoritative data.

* Maintain and pass information on the unclassified network for easy access; some outside organizations will not have SIPRNET (Secret Internet Protocol Router Network) capability.

* All organizations potentially involved in DoD CS efforts should name and keep current points of contact that have responsibility for DoD CS communications.

* Use more than one form of communication when dealing with the most critical issues. Importance of an issue does not always come through in an e-mail, particularly if competing with other priority items.

Don't assume your boss is omniscient. Sometimes important information needs to come more than one way and with a flashing light on it.

Never assume. There were anecdotal accounts of guidance not reaching certain field elements until weeks after it had been released. Always follow up with your reporting activities to ensure that they've been received and important information has been understood.

Don't always accept the 80/20 solution. In a diverse, deadline-driven working group such as FM-Katrina, don't let the rush to the end goal cause you to overlook suggestions or dismiss ideas or insights that will lead to a better solution.

Visit the field. If operational imperatives allow, there is no substitute for directly exploring the issues being faced by the folks on the ground.

Don't allow your attention to wane. Senior leadership stayed interested and engaged throughout the existence of FM-Katrina.

Take the time to say thanks. That goes without saying, doesn't it?

Air Force FMT Introduces a New Player--the E-44

Air Force Financial Management Transformation has partnered with the Joint Program Management Office (JPMO) to develop an automated, portable device that captures accounting and disbursing transactions in the deployed environment. This tool, the E-44, will automate the Standard Form 44, which is a purchase order, invoice, and voucher used by Department of Defense agencies for contingency purchasing. The hardened, handheld E-44 will reduce paper documentation and manual processing and will provide deployed financial managers with updated contracting and accounting data, enabling better decision support and process controls. Its speed in handling interfaces with service accounting systems will translate to decreased time that users will have to spend in combat environments.

The development team has worked closely with JPMO to fund and develop Air Force financial management-specific requirements (for example, providing larger brief block/ description fields). The team is also working with the Defense Finance and Accounting Service (DFAS) to develop the interface with the DFAS Transaction Interface Module System (DTIMS). The DTIMS interface will ink the E-44 to Air Force accounting and disbursing systems. The team tested the E-44 at the USAFE [United States Air Force in Europe] Silver Flag predeployment training site in May, yielding outstanding results.

The E-44 will offer the following key features:

* Its semi-rugged hardware will withstand temperature variations and movement. It will house a portable tablet or PDA (personal digital assistant)-style equipment with signature capture and touch-screen capability. The California Highway Patrol, UPS, and Hertz Rental Car use similar devices.

* The device will link with PC/laptop master stations and then upload to accounting and contracting systems. Master stations will delegate purchase order numbers to individual handhelds, set user limits, and correlate and store all data received.

* The application will store data related to vendor, items procured, delivery information, and fund citation or other fiscal information.

* The application will compute currency conversion to major world currencies and print in English Arabic, French, German, Russian, and Spanish (all data will be entered in English).

For more information, contact SMSgt Jesse Stirring at DSN 225-0852 or [phone]

Eric Lanman is assigned to the Office of the Air Force's Deputy Assistant Secretary Financial Operations (SAF/FMP) as a senior advisor to the Air Force Financial Systems Chief Information Officer. He is a member of the Washington Chapter of ASMC.