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A report from the Office of Inspector General in the Department of Homeland Security urged the Federal Emergency Management Agency (FEMA) to collect $643 million in improper disaster assistance payments doled out after hurricanes Katrina and Rita.
“Given the volume and significance of these improper disaster assistance payments and the Administration’s current effort to cut billions of dollars wasted each year in improper payments,” the inspector general’s office made its recommendation.
The inspector general took a look at FEMA’s Fraud Prevention and Investigation Branch and learned the agency found 160,000 were improperly given the money after the hurricanes in 2005 for disaster-related assistance for temporary housing, home repair, home replacement and personal property as well as transportation, medical, funeral and storage expenses under the Individuals and Households Program.
The misappropriated funds remain uncollected. FEMA has no debt-collection rules and worked to establish a new process but has not directed anyone to start the recoupment process.
The federal agency once tried to collect the improper payments but it was stopped by a federal judge in 2007 until changes were made in its recoupment process.
FEMA gave out more than $7 million in individual aid after the hurricanes, according to the report. The improper payments were made due to “inadequate internal controls, human error, mistake and fraud,” the report said.