The federal government overpaid upward of $177.2 million for disaster recovery in Florida in 2004 and 2005, says a new report from the U.S. Department of Homeland Security's Office of Inspector General.
According to an article by The Hill, the Federal Emergency Management Agency (FEMA) failed to have insureds affected by seven seperate hurricanes during that period--including Hurricane Katrina--maximize their own private insurance before receiving federal funds. FEMA's Florida-based emergency management department, which handled the disaster claims, did an "inadequate" job reviewing insurance plans, says the IG report. The IG says FEMA paid out funds for damages "that insurance should have covered."
To make matters worse, the report found the Florida office was aware of the deficiencies in its insurance review process, but did nothing to correct them. Futhermore, "FEMA management had been aware of potentially significant issues with insurance adjustments relating to disaster assistance in 2004 and 2005" since 2010, says the report.
The report found the federal government paid $4.4 billion in assistance for the seven hurricanes in Florida over those two years. Katrina was responsible for less than 5% of payouts, while Hurricane Wilma was the costliest at $1.5 billion. Auditors looked at $177.2 million that FEMA approved for 2,088 projects deemed "high risk," says The Hill.
Given the amount of time since the claims were filed, it is unclear whether FEMA can recover the funds.
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