Financial Review and Analysis of a Sheltering System


The City of Houston generously sheltered more displaced and evacuated people from Hurricane Katrina than any other city, yet the costs submitted for reimbursement were disproportionately much higher than expected.  The Department of Homeland Security’s Office of the Inspector General (DHS-OIG) began to question costs, particularly those related to program management.


The federal government asked Hagerty to conduct a financial review of Houston’s sheltering program and identify ways the city could reduce costs and implement a program they could sustain.


The Hagerty team – made up of experts in financial management, grant management, financial analysis, and process analysis – flew to Houston and began reviewing project financials. They interviewed program managers and staff throughout the city’s sheltering program, and extensively reviewed expenses. The team quickly identified several causes for the skyrocketing costs: a time-consuming and inefficient invoicing process; the evacuees’ case management needs; and confusion dealing with FEMA’s extensive documentation requirements.


Hagerty drafted a list of recommendations that would save time and reduce costs, including eliminating unnecessary procedures; streamlining inefficient procedures; and implementing simple cost control measures. The Hagerty team helped the federal government communicate those suggestions to appropriate parties within the City of Houston government, and informed Houston officials they would no longer reimburse for inefficient and unnecessary processes. The City of Houston made the changes in the recommendation, thus saving the city, the federal government, and taxpayers millions of dollars.