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DHS IG Tells FEMA to ‘Suspend’ All $30M Grant Payments for Mississippi Coastal Retrofit Program

All Federal Emergency Management Agency (FEMA) grant payments for the $29.9 million FEMA Hazard Mitigation Grant Program (HMGP) to the Mississippi Emergency Management Agency (MEMA) following Hurricane Katrina for the state’s Coastal Retrofit Program should be suspended until the state can properly account for the federal funds, according to a new Department of Homeland Security Inspector General (IG) audit report.

“Mississippi did not provide proper oversight of [the] $29.9 million grant for the Hazard Mitigation Program,” and, “As a result, FEMA has no assurance that Mississippi properly accounted for and expended federal funds,” the IG stated.

The goal of the Coastal Retrofit Program was to help 2,000 Mississippi homeowners strengthen their homes against wind damages in future disasters.

However, the IG said, “We received complaints that the state was mishandling federal funds for this program.”

Specifically, the IG stated, Mississippi “allowed one employee complete authority over the program, which influenced the approval of completion of work and payments to contractors; spent $31.5 million in state funds to complete work on 945 of the estimated 2,000 homes but has claimed only $957,776 for FEMA reimbursement; and, “Has not provided documentation to support $30.5 million paid to contractors.”

Consequently, the IG stated, “FEMA should take the actions necessary to protect against the improper use of Disaster Relief funds. For example, FEMA should either deobligate or, at minimum, suspend payments on the $29.9 million approved for the program, unless Mississippi can provide adequate documentation for all funds expended and assurance that the scope of work is complete and in compliance with federal regulations and FEMA guidelines.”

The IG blamed poor oversight of the funding, stating, “Mississippi did not ensure separation of duties—a basic tenet of internal control—over $29,888,707 of HMGP funds … The Mississippi Agency Accounting Policies and Procedures Manual, Sub-Section 30-30-30, defines segregation of duties as an internal control activity to ‘reduce the risk of error and fraud by requiring that more than one person completes a particular fiscal process.’”

“Although Mississippi became aware of improper oversight as early as December 2014, it did not take any actions to stop or mitigate the problem until February 2016—after we initiated this audit and we had preliminary discussions with them on our findings,” the IG reported. “Federal regulations at 44 Code of Federal Regulations (CFR) 13.40(a) require grantees to manage the day-to-day operations of grant and subgrant activity to ensure compliance with applicable federal requirements and achievement of performance goals.”

The IG said, “FEMA officials agreed with our findings and recommendations.”

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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