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.