Washington, DC -- On June 20, the Associated Press ran a series of articles highlighting audits of state and local governments, and non-profit organizations receiving disaster assistance grants. The stories are not tied to one specific document or report generated by FEMA, rather the information comes from routine audits conducted by FEMA.
FEMA's Office of Inspector General routinely audits state and local governments and non-profit organizations that receive FEMA disaster assistance funds. The audits are independent assessments to determine whether the recipients of the grants spent the funds according to federal regulations and FEMA guidelines.
In some instances these financial and compliance audits identify money that must be returned to FEMA. Most often the audits question expenditures for ineligible items or instances of duplicate payments from insurance companies or other sources. These problems generally occur because state or local government officials make mistakes in how they use or account for the funds or because they are unaware of specific FEMA regulations governing how the funds must be spent.
In the past 10 years, FEMA's disaster-related costs have totaled more than $25 billion. The amounts questioned by the Inspector General in the audit process total about $442 million for the same period - less than 2 percent of total FEMA costs.
FEMA believes that most of the cases are not deliberate attempts to defraud the federal government.
With Presidential disaster declarations, affected local governments are eligible to apply for federal assistance to fund 75 percent of the approved costs for debris removal, emergency protective measures, and repairing, restoring or replacing damaged public facilities. Disaster assistance also may be provided to repair, restore and replace facilities owned by certain private non-profit organizations that operate and maintain educational, utility, emergency, medical, custodial care and other essential governmental service facilities.
FEMA understands that the application process for Public Assistance grants can be complicated. To help public agencies understand the disaster assistance process, FEMA schedules daylong briefings in connection with all disaster recovery operations. These briefings explain in detail the procedures to follow when applying for federal disaster assistance and the kinds of disaster-related projects that are eligible under FEMA's programs.