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Wednesday, November 30, 2022
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GAO Reviews FEMA’s Housing Inspections Process

Contractors have to manually check and clear inspection records before they are submitted to FEMA. According to one contractor GAO spoke with, it now takes about 35 staff to review 100 inspectors’ work, whereas previously it took 10 staff.

The U.S. government watchdog says the Federal Emergency Management Agency (FEMA) has taken steps to improve its housing inspections process. 

After a major disaster, survivors can apply for the Federal Emergency Management Administration’s Individuals and Households Program (IHP) for temporary housing or home repair funds. A review by the Government Accountability Office (GAO) has found that about 2.7 million people applied to the FEMA IHP for major disasters declared from January 1, 2018 through November 1, 2021. Of these applicants, FEMA authorized housing inspections for about 1.4 million and approved about 710,000 applicants for assistance. For those who were not approved for assistance, GAO found that the most common reasons for ineligibility were that they had insurance, or had insufficient or no reported damage. The median and mean amounts of IHP assistance per applicant were $2,314 and $4,157, respectively.

GAO determined that FEMA has taken actions since 2018 intended to improve the housing inspections process, but has not always assessed how the changes affect the IHP applicant awards. For example, in part to respond to the COVID-19 pandemic, FEMA streamlined its approach in April 2020 for estimating damages to homes. Instead of recording itemized damages, inspectors estimated the overall damage level of a home based on a smaller set of key indicators (e.g., height of floodwater in a home). GAO found that mean awards were 35 percent lower under the new approach than under the prior approach.

The watchdog is concerned that FEMA has not assessed this new approach to determine if it accurately estimates damages. GAO suggested steps for assessing the approach’s accuracy, including conducting sensitivity analyses of its assumptions and underlying data to ensure they form a reliable basis for future awards or analyzing trends in award amounts between line item and damage level assessments.

In March 2020, FEMA began using applicant self-assessment questions to determine whether to authorize housing inspections for applicants. According to the new policy, applicants who self-assessed having minor home damage would not receive an inspection, and therefore not receive certain types of assistance, unless they took additional steps to request an inspection. FEMA’s goal was to reduce the number of required inspections and deliver assistance to applicants with the greatest need first. However, FEMA analysis and GAO’s observations indicate that these self-assessments are not a reliable indicator of eligibility. For example, from January 2018 to November 2021, 43 percent of applicants who self-assessed minor damage were found to have eligible damages. GAO spoke with representatives from five non-governmental organizations supporting applicants in different states. They said that applicants can find it challenging to accurately describe their own damages or advocate for themselves during the IHP application process. Although FEMA discontinued the self-assessment practice, officials told GAO that the policy remains in place for FEMA to implement at its discretion in the future. 

GAO’s report noted that FEMA has identified an increase in potential IHP fraud since 2017, and in particular, since it implemented the remote inspection process in 2020. While FEMA has taken some fraud mitigation steps, FEMA officials told GAO that the agency has not assessed the fraud risks introduced by the remote housing inspection process or developed strategic actions to mitigate them. Of the 23 FEMA housing inspectors GAO interviewed, 17 stated that fraud has likely increased since 2020, especially in the context of remote inspections. FEMA officials also noted an increase in identity theft fraud through the remote and hybrid processes. 

FEMA stated during GAO’s review that it would return to in-home inspections in June 2022, but that applicants will be able to opt for hybrid inspections and that FEMA may return to remote inspections at its discretion.

Responding to cybersecurity concerns, FEMA modified its housing inspections policy in 2019 to restrict contractors from using software tools. The contractors had been using these tools for at least nine years to conduct and manage data related to housing inspections. According to both FEMA and contractor officials, the modified policy has created various inefficiencies in the housing inspection process. For example, prior to the restrictions, contractors were able to use their data systems to provide inspectors with the routes to applicant addresses and track the location of inspectors in the field. They were also able to use their systems to conduct automated edit checks (i.e., corrections of editorial or common errors) of the inspections and trend analyses of their inspections. However, since the 2019 restrictions, contractors told GAO that they are no longer able to track the location of inspectors in the field and they have to manually map out each inspection location using Google Maps, which they stated is time-consuming and inadequate. In addition, the contractors now need to conduct all edit checks manually. For example, if an inspection had an incorrect assessment of a heating system, contractors’ data systems would have automatically red-flagged and edit-checked it. Now, contractors have to manually check and clear inspection records before they are submitted to FEMA. According to one contractor GAO spoke with, it now takes about 35 staff to review 100 inspectors’ work, whereas previously it took 10 staff. Due to the modified policy, FEMA also had to remove automated software it used to automatically validate inspectors’ home inspections. 

GAO is making seven recommendations to the Department of Homeland Security (DHS), including that FEMA assess the accuracy of its damage level approach and take steps to ensure its policies on the use of self-assessments are supported by evidence in accurately identifying eligibility for assistance. DHS disagreed with two recommendations, but GAO continues to believe they are warranted.

Read the full report at GAO

Kylie Bielby
Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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