FEMA’s disaster assistance programs are highly susceptible to fraud, waste, and abuse, which poses significant risk to taxpayer dollars. Consequently, the Office of the Inspector General (OIG) has conducted a review to determine the extent to which FEMA has instituted effective mechanisms to demonstrate the importance of fraud prevention in its disaster assistance programs.
FEMA now uses standard system queries and additional business rules to flag potentially fraudulent disaster assistance applications. However, OIG’s report says the agency must take additional, proactive steps to create and sustain a culture of fraud prevention and awareness.
OIG wants FEMA to adequately staff the Fraud Prevention and Investigation Branch (FPIB) to execute its mission effectively; implement an effective process to monitor and discourage staff noncompliance with fraud prevention and awareness training requirements; and establish a clear and consistent process for reporting suspected fraud.
The report says that although FEMA promotes prompt assistance to disaster survivors, it does not place equal emphasis on ensuring program integrity and fiscal responsibility. “Until FEMA takes visible, substantial, and continual steps needed to carry out its mission programs by detecting and reporting potential fraud in a systematic and timely manner, it will continue to risk the loss and misuse of taxpayer dollars” states the IG.
One of the key concerns resulting from this and previous reviews, is the FPIB understaffing. OIG says this occurred because the branch does not periodically conduct workforce assessments to validate the number of staff needed to satisfy its influx of workload requirements. Specifically, FPIB’s workload directly correlates to the number of disasters and the intensity of storms that occur in any given year or years. As the number of disasters and the intensity of storms increase or decrease, so does FPIB’s number of complaints, caseload, and fraud risk. As a result, FPIB experienced an increased backlog of more than 1,850 fraud cases and complaints when responding to the 2017 hurricanes.
Shortfalls were also found in staff training. For the period of April 30, 2017 through May 1, 2018, 18,555 of 19,981 (93 percent) FEMA employees failed to complete the mandatory fraud training. More importantly, 72 of 75 (96 percent) of senior leadership did not complete it.
Improvement is also needed in reporting fraud. From March 2018 to May 2018, OIG interviewed 137 FEMA application specialists at 15 Disaster Recovery Centers located throughout Texas and Puerto Rico. During the interviews, OIG asked application specialists the same set of 12 questions pertaining to when, how, and to whom they should report suspected fraud. In response, only 21 percent of the FEMA application specialists provided the FEMA fraud hotline number and only 23 percent could provide the FEMA fraud email address.
The OIG report lists the five recommendations made to FEMA:
- Periodically conduct workforce studies and take action to right-size the Fraud Prevention and Investigation Branch workforce as appropriate to accomplish its mission effectively.
- Reassess and project the Fraud Prevention and Investigation Branch’s workforce requirements annually based on the workloads from prior disasters.
- Adequately staff FPIB to assess and determine the effectiveness of fraud prevention and detection activities for all FEMA disaster assistance programs.
- Implement monitoring and enforcement mechanisms to ensure FEMA personnel complete annual fraud prevention and awareness training.
- Update all guidance, manuals, and training materials to provide consistent direction for reporting fraud and suspected
fraudulent activity in the agency’s disaster assistance programs.
FEMA has concurred with all recommendations. Work is already underway to complete some of the work required. For example, in response to the fourth recommendation, concerning training, FEMA’s Fraud Office of the Chief Learning Officer is due to publish a real-time training dashboard that displays the Fraud Prevention and Awareness training completion rates for each office. the Acting Administrator will send a communication to his senior leadership team and the entire FEMA workforce emphasizing the importance of completing Fraud Prevention and Awareness training.
FEMA expects to complete other efforts, such as its first workforce study, by the end of 2019. It will then conduct additional studies every three years.