Audit Scolds FEMA While Senators Examine Fraud | AccountingWEB

Audit Scolds FEMA While Senators Examine Fraud

Today the Senate’s Committee on Homeland Security and Governmental Affairs will hold hearing on the Federal Emergency Management Agency’s (FEMA) response to hurricanes in Florida during 2004 and the impact of that response on taxpayers. The hearing is part of a four-month investigation sparked by a federal audit questioning millions in storm payouts.

The audit looking into payments made in the wake of Hurricane Frances as well as concerns regarding payments attributed to other storms that have not been made, found waste and poor control at every level of FEMA. The study, conducted by the Inspector General’s Office of the Department of Homeland Security, was confined to Miami-Dade county in southern Florida. However, the findings raise serious questions about whether funds were appropriately awarded in other counties following other storms. Some wonder whether the problems could extend beyond the state of Florida to other states and communities declared disaster areas by the federal government making them eligible for FEMA funds.

FEMA Director Michael D. Brown told the Sun Sentinel on May 14, 2005, that: “although some fraud and abuse is evident in all disasters he was pleased with the audit’s findings of ‘nothing widespread.’ “

Others take a different view, even within the agency.

“I don’t think they were digging deep enough. They were scratching the surface of the questions we have here,” Congressman Mark Foley (R-FL) told the Sun Sentinel.

“I can’t tell you why they appear focused on one particular county,” Dan Craig, chief of FEMA’s recovery division told the Miami Herald. “But we would certainly hope it doesn’t end there. We hope authorities go after anyone committing fraud against FEMA and the taxpayers, no matter where it is or what county it happens in.”

The audit did not consider allegations of fraud and only examined about three percent of the estimated $31 million awarded to Miami-Dade residents by early March 2005. A grand jury investigation indicted 14 aid recipients, six of whom have pled guilty according to the Sun Sentinel. The Miami Herald reported that 132 or about four percent of the 3,500 federal hurricane inspectors contracted by FEMA after the 2004 storms, were fired.

The Offices of the Inspector General and U.S. Attorney refused to comment to the Miami Herald regarding the firings or the audit. Craig, however confirmed to the Miami Herald that his agency had forwarded “at least nine” names of inspectors caught lying on claims to the Inspector General’s Office earlier this year.

In addition, the Sun Sentinel reports that FEMA has admitted inspection errors between August 2004 and February 2005 have resulted in more than $24 million in “ineligible or excessive payments” across the nation.

The Committee on Homeland Security and Governmental Affairs told the Sun Sentinel in January “Federal disaster relief is very important to help families and communities rebuild from disaster, however, it must be limited to those who have truly suffered losses. It is troubling that scarce disaster assistance may have gone to areas that did not warrant assistance.”

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