The Office of Inspector General ("OIG") of the U.S. Department of Homeland Security ("DHS") has issued another report critical of the Federal Emergency Management Agency ("FEMA").
According to the OIG's report, 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, the OIG determined, 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. Without this documentation, FEMA risks approving ineligible applications, the OIG found.
Moreover, according to the OIG, FEMA also potentially paid applicants more than the predisaster market value of their vehicles. The OIG said that was because, according to FEMA officials, determining predisaster value immediately after a disaster would be unduly burdensome and would delay assistance. As a result, the OIG determined, FEMA risks overpaying federal funds for transportation assistance in response to future disasters.
Lastly, the OIG said, FEMA did not verify that 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, the OIG concluded.
The OIG made three recommendations that, it said, would help ensure that FEMA was spending federal funds for transportation assistance properly:
- FEMA's assistant administrator for recovery should strengthen FEMA's transportation assistance policies and procedures and coordinate with FEMA's assistant administrator for mission support to (a) require 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 (b) ensure that future information technology updates support the collection, use, and retention of unique vehicle identification numbers to enable FEMA to cross-reference national databases to confirm insurance coverage and identify applicants' second vehicles.
- FEMA's assistant administrator for recovery should 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.
- FEMA's assistant administrator for recovery, in accordance with the Stafford and Improper Payments Acts, should develop controls to identify payments not used for critical transportation needs.
FEMA concurred only in the second recommendation. The OIG said that, as a result, it considered the first and third recommendations open and unresolved.
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Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].