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Monday, June 5, 2023

OIG: FEMA Risked $64 Million in Improper Transportation Assistance

According to the Federal Emergency Management Agency (FEMA), it approved $64.6 million for transportation assistance for vehicles considered damaged or destroyed by Hurricanes Harvey, Irma, and Maria in FY 2017. The Office of the Inspector General conducted a review to determine to what extent FEMA prevented fraud, waste, and abuse of transportation assistance in response to the hurricanes.

The review found that FEMA did not take sufficient actions to prevent fraud, waste, and abuse of transportation assistance funds for vehicles considered damaged or destroyed by Hurricanes Harvey, Irma, and Maria in fiscal year 2017. Specifically, OIG found FEMA did not adequately document applicants’ eligibility for transportation assistance because FEMA’s policies and procedures do not require documenting comprehensive insurance and second vehicle verifications.

OIG’s September 30 report also notes that FEMA potentially paid applicants more than the pre-disaster market value of their vehicles. According to FEMA officials, determining pre-disaster value immediately after a disaster would be unduly burdensome and would delay assistance. As a result, FEMA risks overpaying Federal funds for transportation assistance in response to future disasters.

According to the review, FEMA did not verify applicants spent transportation assistance funds to address critical transportation needs. Again, FEMA lacked a process requiring post-payment reviews to ensure survivors spent funds as required. Consequently, FEMA risked improperly spending $64.6 million in the wake of the 2017 hurricanes.

FEMA’s focus after a disaster is on distributing transportation assistance quickly. While OIG does not dispute the importance of this focus, it says doing so without proper controls and oversight does not exemplify proper stewardship of taxpayer dollars.

OIG made three recommendations to FEMA:

  1. Strengthen transportation assistance policies and procedures regarding the collection and retention of eligibility documentation or where applicable, document the steps taken to validate applicant statements in FEMA’s system of record; and ensure future information technology updates support the collection, use, and retention of unique Vehicle Identification Numbers (VIN) to enable FEMA to cross-reference national databases to confirm insurance coverage and identify applicants’ second vehicles.
  2. Develop state, territorial, and tribal government guidance on how to set effectively transportation assistance repair and replacement amounts to better ensure consistency and reasonableness, including consideration of average repair and replacement costs in affected areas.
  3. Develop controls to identify payments not used for critical transportation needs.

FEMA did not concur with the first recommendation and states that collecting VINs or another unique identifier to validate further comprehensive insurance coverage is not necessary because it already validates insurance through an inspection or through documents submitted by an applicant in response to a Request for Information letter. In addition, FEMA’s Processing Procedures Manual requires documentation pertaining to eligibility, including information about insurance coverage and the lack of a second working vehicle, be either verified by an onsite inspector or submitted to FEMA.

The agency concurred with the second recommendation and aims to meet this by December 31 2020, however it disagreed with the final recommendation regarding controls to identify payments. Federal laws and regulations, including improper payments law, require FEMA to take steps to identify and recover any disaster funds not used for the intended purposes. FEMA’s current procedures already ensure that assistance provided is based on verified documentation or onsite inspection. Accordingly, FEMA told OIG that it currently complies with applicable Federal laws and regulations. When FEMA is made aware of an applicant who has misused funds, it follows an established process to recover those funds. However, OIG responded that FEMA’s current practice of recovering funds only when it becomes aware of misuse does not constitute a proactive approach to identifying fraudulent claims, and OIG does not consider this an effective means of preventing fraud, waste, and abuse.

Read the full report at OIG

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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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