Improving the Recoupment Process

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Recently, you may have heard about or read a report issued by the Department of Homeland Security’s Inspector General (IG) saying FEMA has identified approximately 160,000 applicants that may have received improper disaster assistance payments totaling approximately $643 million.

Unfortunately, whether through fraud, human or accounting errors, or for other reasons, assistance sometimes goes to individuals who are not eligible for it during the response to any disaster.

The payments in question were made through our Individuals and Households Program during the response and recovery to Hurricanes Katrina and Rita and after. The program is intended to help uninsured disaster survivors with temporary housing or to repair damage to their home or for other disaster-related needs. The large scale of the disasters (over $7 billion has been disbursed to help those in need), coupled with safeguards and protections that simply weren’t strong enough at the time, led to a large number of potentially improper payments.

So why haven’t we tried to get the money back?

The recoupment process used under previous administrations was in need of critical improvements.

A 2007 court order from a lawsuit challenging FEMA’s recoupment efforts following Hurricanes Katrina and Rita, along with regulations established by the Department of Homeland Security in 2007, led us to suspend our recoupment process.

Plain and simple, the process needed a lot of changes.

So what are we doing about it?

In the years since, we have been working to rectify these problems. The bottom line is we are committed to being responsible stewards of the taxpayers’ dollars, and not only do we agree with the Inspector General’s recommendation that we recoup improper payments, but independent of this report we have been working to finalize plans to recoup improperly awarded funds, while continuing to support Gulf Coast communities as they continue to recover.

We have not been taking this task lightly, as we have also been taking another look at all our documents and information for the over 160,000 disaster survivors, to ensure that we are recouping funds from the right individuals. The survivors of these disasters have been through a lot, and they deserve an open and transparent process.

Since President Obama came into office, FEMA, working closely with our state and local partners in Louisiana and Mississippi, has been able to free up over $5 billion in backlogged projects to restore community infrastructure and services, including $1.8 billion for New Orleans schools. For far too long these projects had been deemed too hard to deal with, or were just simply ignored, and it was slowing the recovery of the Gulf Coast.

We are proud that we’ve been able to cut through the red tape, but realize there is much more work to be done, including finalizing the new recoupment process. We are well underway – and had been well before this IG report was released - in taking the steps we need to finalize that new process so that it is fair and transparent for both disaster survivors and taxpayers.

And what are we doing to make sure this doesn’t happen again?

We have worked diligently to put protections in place that will safeguard against fraud and abuse in future disaster situations and significantly reduce the percentage of improper payments, while ensuring that those in need are receiving assistance as quickly as possible.

As a New Orleans Times-Picayune story from earlier this week points out,

"FEMA has also instituted other rules aimed at avoiding improper payments after disasters, including additional verification requirements for automated payments; the flagging of "high risk" addresses like check-cashing stores, mail drops, cemeteries and jails; and the flagging of duplicate rental payments."

We are proud of the work that has been done, but realize there is much more to do.

- Rachel

Last Updated: 
06/18/2012 - 12:09
Posted on Wed, 01/05/2011 - 18:31
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Comments

Anonymous:

I would not have applied for Fema assistance had I...

I would not have applied for Fema assistance had I been told the truth initially - told that having insurance did not disqualify me - urged by <br />local gov to apply as my damage was quite extensive - my award was small, thakfully now that I must pay it back- my damages exceeded my<br />insurance payment -appealed ; never got a response<br />until now - your letter requesting repayment - your process is not transparent" at all - just a dog and pony show - hope I never have to apply again- Disappointed/dismayed tax payer
FEMA Public Affairs:

It’s important for anyone who feels they have rece...

It’s important for anyone who feels they have received one of these letters in error to know that these are notifications of a potential improper payments – and that there are options for appealing this notice.If you have any questions, or have information that can help us resolve the details we need to correct your case, we want to hear from you. Please call the Recoupment Helpline at 1-800-816-1122. Individuals who are Deaf, Hard of Hearing, or those with speech disabilities, may use the TTY at 1-800-462-7585, between 9:00 AM and 8:00 PM EST, Monday through Friday.
Anonymous:

is there a way to know / look up if you will get a...

is there a way to know / look up if you will get a letter?

Well, looking at the situation from a half-full pe...

Well, looking at the situation from a half-full perspective, at least anyone got the compensation needed to help rearrange their lives.
Anonymous:

My 76 year old Mother who lives on social security...

My 76 year old Mother who lives on social security is being told she has to pay back over $500. The reasons for the overpayment are not understood by my Mother and her appeal was denied. <br /><br />There's another 81 year old widow in town that FEMA are targeting. <br /><br />My Mom is still stressed from the floods and now she's being threatened by FEMA that they will take it out of her social security money and that she's just lucky that they didn't go after more of the money.
Anonymous:

This is truly sad. How on earth can you give some...

This is truly sad. How on earth can you give someone something five or six years ago then turn around and ask for it back?! I think FEMA needs to eat their mistake and move on.
Anonymous:

Eat your mistake! Wow sad day to be American...

Eat your mistake! Wow sad day to be American...
Anonymous:

This is just another example of why you should not...

This is just another example of why you should not rely on government to help you recover from a disaster. FEMA is just another disaster like Fannie Mae and Freddie Mac....and once again the taxpayers take it in the shorts.
Anonymous:

What if FEMA only gave you half of the money the F...

What if FEMA only gave you half of the money the FEMA Inspector said you needed to repair, though years ago , does that mean FEMA still owes you the other half of the repair that could not be done , because enough funds were not disbursed, if so how can we get that rest of money now?
Anonymous:

I think if FEMA hired incompetent people to acess ...

I think if FEMA hired incompetent people to acess these claims then it's their responsibility to make it right .....Not the victim.
Anonymous:

My wife received a letter yesterday requesting alm...

My wife received a letter yesterday requesting almost $5K in repayment. My wife did not defraud or mislead anyone during her application I cannot understand why in the hell we are being asked to repay such a large amount when my wife lost EVERYTHING in Katrina and had no insurance. What makes this worse is the lack of information provided in the letter and demand for payment. FEMA is making it as annoying as possible to appeal this and I am ashamed. I can't help but ask why my wife, who lost EVERYTHING and who did not lie, cheat or defraud anyone, is now being targeted. But what else should I expect from FEMA?
Anonymous:

You can expect to get nothing but double talk and ...

You can expect to get nothing but double talk and possibly denial of your appeal as they did mine even though I signed a declarationl Under the penalties Provided for Title 18, Section 1001 of the US Code, "Whoever knowingly and willfully falsified, conceals or covers up by an trick, scheme, or device a material fact, or makes any false, ficticious statements or representations, shall be fined not more than $10,000 or imprisoned not more than five years, or both". The letter refers to the recoupment as "your debt" and urge you to start paying even before your appeal is accepted to avoid interest and penalties. My first thought was that this was a scam, send money first and we'll return it if you're a winner. My first call to the help-line told me that the reason for the recoupment is that I had flood insurance and was paid $520.55 twice for a bedroom. I said that was not true. Only structure, not content coverage was included in the policy at the time of purchase. So I sent an appeal along with a copy of the policy showing 0 content coverage. I thought it was over until I received a letter of denial with no explanation. I called the help-line again. This time they told me the reason was because I had three bedrooms, two on the second floor and could have occupied one of them. What happened to 0 content coverage on my policy as proof? The policy said nothing about 3 bedrooms. It reads three or more floors with unfinished basement, single family residence, non elevated building. I'm 76 and live alone and the only bathroom is on the main floor next to the bedroom. The second floor is an attic with dormers accessed by a steep stairway. What does that have to do with content? "FEMA feels you could have occupied an upstairs bedroom and wouldn't have lost your bed." What? This is crazy! She then said she couldn't help me anymore and transfered me to Financial. The financial help lady was pleasant and said she would send me hardship waiver forms to fill out. But I don't need to do this! I wasn't paid twice! By denying my appeal FEMA is calling me a liar! According to Title 18, Sec. 1001 U.S. Code they could send me to jail! Can I sue FEMA for libel? I woke up the next day and thought this was all a nightmare. I called the Wisconsin State Journal who had covered the flood and the relocation of the village to higher ground since the floods. My 81 year old neighbor whose husband passed away just before the flood was asked to return $10,000 which she has no record of receiving. The paper put our plight on the front page. FEMA... Agency targets two women in Gays Mills. Of the more than $22 million in aid mistakenly given out nationally since 2005 by the Federal Emergency Management Agency, more than $1 million of it was given to 413 Wisconsin residents. Two of them endured floods - not once but twice - replaced most of their possessions, are retired and live on fixed incomes. I have a theory of why they selected us. The clue is "fixed incomes" many people who went through disasters since 2005 are poor or unemployed. Social Security benefits haven't been taken away yet, although our former president said it was full of IOU's. They can't take it away from those on unemployment or those receiving Welfare or on SSI disability so they picked on a sure thing, two elderly widows on Social Security which they can access with ease since most of it is deposited directly into our checking accounts. By the way, my "debt" was paid rather than going through any more of this insanity. They didn't want the bed back. FEMA is the one who should be ashamed.
Anonymous:

I recently received a recoupment letter asking me ...

I recently received a recoupment letter asking me to return the money I received after Hurricane Katrina. Their reason? FEMA states in its letter that there had been "duplication of benefits with household member". Let me clarify. My sister and I both lived at the same address- yes. However, BEFORE we even applied, she and I both called separately to ask if we were to apply together or as individuals because the guideline wordings were unclear. We were both told by different individuals that since I was not a dependent of my sister and that I paid my own taxes, I was to apply separately. Upon being told this by multiple FEMA employees, she and I did just so. We were awarded separately, and she moved away to restart her life because the school at which she was teaching was flooded and did not reopen, while I stayed in New Orleans and continued graduate school and helped with the rebuilding effort. Now don't get me wrong, we were both extremely grateful for the financial assistance we received because we lost absolutely everything from Hurricane Katrina. I used the money to attain housing, purchase food and clothing, and paid off any of the costs incurred during the 3 months I evacuated to TX. However, for FEMA to come back 6 years later demanding I return the money that they “mistakenly awarded” me in its ENTIRETY within 30 days is absolutely absurd. <br />Adding insult to injury, FEMA is accruing interest on the "debt" owed. If I knew this money was going to be treated as a loan, I would have not applied because I have the foresight to know that I could not bear the repayment. Last but not least, my sister and I take great pride in being honest and good American citizens who pay our taxes and who uphold and follow the law, but to be lumped into the same group as those who consciously defrauded the government for their own personal gain and therefore, deemed as the same quality of people, is beyond offensive and utterly reprehensible. I promise to all tax-paying Americans, if I had the money to repay this amount FEMA is demanding, I would not hesitate because I understand that ideally, this money will then be intended for those in need of such assistance. However, living on a graduate student stipend, where am I to find several grand in a month’s notice? Perhaps I can suggest FEMA talk to the people at Sallie Mae, and they can work together on a joint payment plan for me. Better yet, maybe FEMA can offer me a job, and I can work my “debt” off that way. It just seems unjust that we, those who honestly tried to do everything correctly and not take advantage of any entity, are being punished and literally made to pay for FEMA’s incompetent employees’ mistakes. <br />I am wary to file an appeal because I have a strong feeling I will be denied and if so FEMA states that, “…if your appeal is denied, your debt will become final and the (FFC) will continue the collection process by sending you an additional letter, known as a “Letter of Intent.” I wonder if it’s best just to file a hardship waiver. For all who are going through a similar ordeal, I wish you luck and hopefully, not much heartache and stress as we figure out what to do. God bless.
Anonymous:

How can FEMA force victims to pay back money that ...

How can FEMA force victims to pay back money that FEMA says was improperly disbursed due to FEMA's OWN mistake? It is absured. I would have never applied for disaster assistance if I did not truly need it; nor would I have taken the money if I was not eligible. At the time I was living with a family member; however, I paid rent to that person. Before I applied, I explained my situation to a FEMA representative and I was told that I was eligible to file separately from the person that I paid rent to because we were considered to be separate "households". FEMA even sent an adjuster out to assess the damage and living situation. I thought that "after review of you application for disaster assitance, you have been found eligible to receive disaster assitance funds" meant exactly what it says. I was under the impression that I was eligible, because I WAS eligible and because I DID need the assitance. How was I supposed to know that the FEMA representatives had no idea what was going on? I was under the impression that a trained individual was handling my case. I applied for FEMA assitance after Katrina, because I needed it. Had I known that 6 six years later they would come to me and demand that I pay every penny back to them, I would have never even applied. I was not aware that the assistance was a loan. I am finally able to get up on my feet and here FEMA is trying to push me back down. This whole situation is disgusting. I am a hardworking honest person, and for FEMA to make me feel like I stole money from American taxpayers due to their mistake is wrong. I feel that I don't even have a fair chance at an appeal because there is no unbiased party involved.I tried to contact FEMA to find out what type of documentation would I need to provide them with to prove my case. It seems that even now FEMA representatives have no idea what's going on because the person I spoke with could not provide me with a straight answer as to what exactly I need to provide them with to prove my eligibility. This is ridiculous.
Anonymous:

I have a question. I received a recoupment letter...

I have a question. I received a recoupment letter for about $3K for Katrina. The last time I got any FEMA benefit was 2008. I got a full discharge from Chapter 7 bankruptcy is 2010. I did not list FEMA as a creditor, because obviously, I had no reason to suspect that I owed any money. It seems to me that the general discharge in 2010 should cover any debt that I had owed to FEMA prior to that discharge date (which obviously applies here.)<br /><br />Therefore the question is, is the recoupment covered under this discharge, in which case there would not even be a debt forgiveness tax liability?
Anonymous:

This is an atrocious injustice.

This is an atrocious injustice.

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