Summary
In 2005, Hurricanes Katrina and Rita caused unprecedented damage. The Federal Emergency Management Agency's (FEMA's) Individuals and Households Program (IHP), provides direct assistance (temporary housing units) and financial assistance (grant funding for temporary housing and other disaster-related needs) to eligible individuals affected by disasters. Our objectives were to (1) compare the types and amounts of IHP assistance provided to Hurricanes Katrina and Rita victims to other recent hurricanes, (2) describe the challenges FEMA faced by the magnitude of the requests for assistance following Hurricanes Katrina and Rita, and (3) determine the vulnerability of the IHP program to fraud and abuse. GAO determined the extent to which the program was vulnerability to fraud and abuse, by conducting statistical sampling, data mining and undercover operations.
For Hurricanes Katrina and Rita, FEMA received more than 2.4 million applications for IHP assistance and distributed $7.0 billion as compared to the six hurricanes that hit the United States in the prior two years and totaled about 1.5 million applications and about $1.5 billion in assistance, respectively. Temporary housing assistance and expedited assistance accounted for much of the increase in IHP expenditures as compared to prior years. Overall, however, although the number of applications was much higher, the percentage approved for non-housing assistance was notably lower for Hurricanes Katrina and Rita than in 2003 and 2004. The magnitude of Hurricanes Katrina and Rita posed challenges in providing assistance to an unprecedented number of victims many of whom were widely dispersed across the country. To address these challenges, FEMA developed new approaches and adapted existing approaches to quickly provide assistance and improve communication with victims. Despite these efforts, management challenges in staffing and training and program restrictions limited the effectiveness and efficiency of the disaster assistance process. FEMA has proposed a number of initiatives to address these problems, but it is too early to determine whether these efforts will effectively address the problems identified. GAO identified the potential for significant fraud and abuse as a result of FEMA's management of the IHP in response to Hurricanes Katrina and Rita. Flaws in the registration process resulted in what GAO estimated to be between $600 million and $1.4 billion in improper and potentially fraudulent payments due to invalid registration data. In addition, duplicate payments were made and FEMA lacked accountability over $2,000 debit cards that were given to disaster victims.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
William O. Jenkins Jr
Government Accountability Office: Homeland Security and Justice
(202) 512-8757
Recommendations for Executive Action
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To obtain reasonable assurance that applicants are prevented from receiving assistance based on invalid damaged addresses, FEMA should implement changes to its systems and processes to reject damaged addresses that are PO boxes.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To obtain reasonable assurance that applicants are prevented from receiving assistance based on invalid damaged addresses, FEMA should provide applicants immediate feedback that PO boxes are not valid damaged addresses.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To obtain reasonable assurance that applicants are prevented from receiving assistance based on invalid damaged addresses, FEMA should implement a process to identify damaged addresses that are not primary residences, such as commercial mail drops.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To provide reasonable assurance that payments are only made based on a valid damaged address that was the applicant's primary residence, DHS and FEMA should include, in the design of the address verification process recommended in our prior report, procedures to validate that the address an applicant claimed as damaged was the applicant's primary residence at the time of the disaster.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To provide reasonable assurance that payments are only made based on a valid damaged address that was the applicant's primary residence, DHS and FEMA should develop and implement processes and procedures to deal with applications where FEMA or other inspectors have concluded that the damaged address was bogus. Within this process, FEMA should develop timely information sharing procedures between inspectors working for FEMA and other agencies to provide assurance that applicants who submitted damaged addresses that inspectors identified as bogus are not provided disaster assistance.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To prevent and/or detect prisoners from improperly receiving IHP payments in the future FEMA should explore information sharing agreements with federal and state officials in charge of maintaining custody over prisoners that could be used to identify ineligible applications.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To reduce duplicate payments, FEMA should expand the data fields used in the duplicate detection process at the time of application to restrict applications to one per eligible household, unless warranted by other circumstances, such as households displaced to separate locations.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To prevent concurrent payments for lodging (i.e., rental assistance, hotels, etc.) for which FEMA is financially responsible, FEMA should establish procedures requiring that individuals apply with FEMA prior to receiving no cost disaster lodging accommodations from federal agencies or the Red Cross.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To prevent concurrent payments for lodging (i.e., rental assistance, hotels, etc.) for which FEMA is financially responsible, FEMA should develop procedures to provide reasonable assurance that individuals staying in FEMA or other no cost lodging are not also provided IHP rental assistance payments for the time they are in the paid for hotel rooms.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To increase accountability over debit cards, FEMA should finalize a full reconciliation to link each issued Katrina debit card recorded by the bank (JP Morgan Chase) to a specific IHP application.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To increase accountability over debit cards, FEMA should require that the bank refunds the government for any unaccounted for funds related to distribution of Katrina-related debit cards.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To increase accountability over debit cards, FEMA should augment procedures for future disasters to provide reasonable assurance that accountability over debit card distribution occurs at each custody transfer in the distribution process.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To address the improper and potentially fraudulent payments within the IHP based on the findings in our testimony, the Department of Homeland Security (DHS) should direct the Director of FEMA to take the following action. To identify and recoup payments based on improper and potentially fraudulent Katrina and Rita applications, FEMA should develop a comprehensive strategy--for current and future disasters--to identify the types of improper applications discussed in this report and refer them for either collections or additional investigations.
Agency Affected: Department of Homeland Security: Directorate of Emergency Preparedness and Response: Federal Emergency Management Agency
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
