Report Finds Lack of Federal Oversight of Red Cross Disaster Assistance

Press Release

Today, the Government Accountability Office (GAO) released a report on the oversight mechanisms of the American Red Cross. The report was requested by Rep. Bennie G. Thompson (D-MS), Ranking Member of the House Committee on Homeland Security, after unorganized and mismanaged responses to significant natural disasters -- including Hurricanes Katrina and Sandy and the 2010 earthquake in Haiti.

The report, entitled "American Red Cross: Disaster Assistance Would Benefit from Oversight through Regular Federal Evaluation", examined how the Red Cross, which operates under Congressional charter, determines what disaster services it will provide, how it coordinates with the Federal government, and what external oversight exists related to its disaster response activities.

GAO found that the Red Cross is subject to minimal federal oversight -- it only submits mandated high-level financial reports to relevant federal agencies. There is no oversight of performance or efficiency. Even when the Red Cross is given Federal funds under grant agreements or interagency agreements, agencies typically only monitor compliance with grant requirements or the interagency agreement. Similarly, GAO found that independent groups and individual states do not have the resources or expertise to properly oversee the American Red Cross. GAO concluded that, to ensure public confidence in the Red Cross' emergency disaster response capabilities, it is in the Federal government's interest to ensure that regular, ongoing Federal oversight exists. Accordingly, GAO recommends Congress establish regular oversight of Red Cross's performance.

To address this lack of oversight and improve performance, today, Congressman Thompson introduced the "American Red Cross Sunshine Act." This legislation will:

* Clarify the Government Accountability Office's authority to investigate the American Red Cross and have access to relevant records and personnel;

* Strengthen the role of the Red Cross ombudsman and require the Red Cross to ensure there is a clear way for concerns to be submitted online; and

* Establish a systemic review process of Red Cross's activities through the Department of Homeland Security, the Department of the Treasury, and USAID.

Ranking Member Thompson released the following statement on the report and legislation:

"Robust oversight and transparency are key to good governance and effective management. This is especially true for the complicated and critical needs of large-scale emergencies and natural disasters like Hurricanes Katrina and Sandy. Today's report is crystal clear -- adequate Federal oversight of the Red Cross is severely lacking even after Congress tried to correct the Red Cross's history of mismanagement and shortcomings when it amended the Red Cross's charter following Katrina."

"The legislation I am introducing today will ensure that the Red Cross, its donors, Federal partners, and those it serves will benefit from improved delivery of services and fiscal management. Regular and ongoing Federal oversight is in everyone's interest, and I hope the Red Cross will work with us, rather than against us, in ensuring we meet this goal."

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