Irma

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 FY 2017.  These weakness occurred because FEMA does not require that agencies collect and retain documentation used to establish applicant eligibility; consider pre-disaster vehicle market value when determining award amounts; provide guidance to state, territorial and tribal governments on how to set transportation assistance thresholds; and conduct post-payment reviews to ensure funds are spent appropriately.  We made three recommendations that, when implemented, will help FEMA ensure it is spending Federal funds for transportation assistance properly.  FEMA concurred with one recommendation and non-concurred with two recommendations.

This interim report is part of an ongoing audit to determine the extent FEMA is meeting disaster survivors’ transitional shelter needs after the California wildfires and Hurricanes Harvey, Irma, and Maria in 2017. We determined that FEMA does not require disaster survivors to notify the agency when they vacate hotels participating in the TSA program, thus allowing the hotels to continue to bill FEMA for unoccupied rooms. Because FEMA is unaware when disaster survivors vacate the hotels, the agency does not know the magnitude of unnecessary hotel charges. Consequently, FEMA could not account for associated TSA payments it may have paid since August 2017, related to the 2017 hurricane season and California wildfires.

Through the TSA program, FEMA provides transitional sheltering in hotels to disaster survivors displaced by emergencies or major disasters. TSA reduces the number of survivors in congregate emergency shelters by providing hotel lodging. During our ongoing audit of the Federal Emergency Management Agency’s (FEMA) Transitional Sheltering Assistance (TSA) program, we determined that FEMA violated the Privacy Act of 19741 and Department of Homeland Security policy2 by releasing to the PII and SPII of 2.3 million survivors of hurricanes Harvey, Irma, and Maria and the California wildfires in 2017.3

The Federal Emergency Management Agency (FEMA), through its Public Assistance (PA) Program, is currently responding to Hurricane Irma — one of the most catastrophic disasters in recent United States history.  FEMA’s damage estimates for Florida and Georgia exceed $4.2 billion, with debris removal operations constituting approximately 36 percent of the total PA cost.  Debris removal costs in Florida and Georgia are estimated to reach approximately $1.5 billion as of May 2018.  FEMA’s guidance for debris monitoring lacks sufficient information to ensure adequate oversight.  In the 2011 OIG report, FEMA’s Oversight and Management of Debris Removal Operations, we identified deficiencies in FEMA’s debris removal guidance.  To resolve these deficiencies, we made 10 recommendations to, in part, strengthen FEMA’s debris removal guidance and procedure.  In response, FEMA released additional criteria pertaining to debris estimating and monitoring to enhance the overall effectiveness of the process.  FEMA removed the detailed responsibilities when it released its Public Assistance Program and Policy Guide (PAPPG).  Going forward from the PAPPG version 1.0, FEMA relies solely on the subrecipient to monitor the debris removal operations, and removes monitoring responsibilities from both FEMA and the State.  Subrecipients now have a greater responsibility to identify issues or concerns during debris removal operations.  We made three recommendations that when implemented will strengthen FEMA’s debris monitoring operations.  FEMA concurred with all recommendations.

We found that FEMA overpaid its employees because it mistakenly believed the Department’s payroll provider had an automated control to prevent payments over the annual cap, and because it did not follow its own premium pay policy. We also found that FEMA has no effective policy or practice to determine the Fair Labor Standards Act status of FEMA employees during disaster deployments, which also contributed to this issue. Since discovering the overpayments, FEMA has been working to calculate how many people were overpaid, but it cannot finish that analysis until it addresses a number of outstanding questions.

Because of the high dollar amount in disaster funds likely awarded and the history of audit questioned costs for FEMA disaster funds, FEMA’s inadequate grant management poses a significant risk to taxpayer dollars. We identified issues in our previous reports that demonstrate FEMA’s ongoing issues with ensuring disaster grant recipients and subrecipients comply with Federal regulations and FEMA guidelines. Specifically, FEMA faces significant challenges in ensuring its grant recipients properly manage FEMA disaster funds. This alert highlights the significant deficiencies with FEMA’s internal controls and its lack of enforcement of Federal requirements. As FEMA moves forward with its recovery efforts, it must hold recipients accountable for proper grant management. FEMA must implement and use effective controls to overcome existing problems with managing and monitoring funds for disaster response and recovery.

This is a Department of Homeland Security Office of the Inspector General (OIG) special report on Federal Emergency Management Agency (FEMA) and FEMA recipient and sub recipient disaster-related procurements. FEMA is currently responding to some of the most catastrophic disasters in U.S. history — Hurricanes Harvey, Irma, Maria, and the October 2017, California wildfires. Because of the massive scale of damage and the large number and high-dollar contracts that will likely be awarded, there is a significant risk that billions of taxpayer dollars may be exposed to waste, fraud, and abuse.

We prepared this special report to address challenges FEMA, Texas, Florida, U.S. territories in the Caribbean, and California may face managing insurance under the Public Assistance program in the wake of Hurricanes Harvey, Irma, and Maria, and the October 2017 California wildfires. This report describes lessons learned from findings and recommendations contained in our DHS OIG grant audit reports issued from fiscal years 2013–2017. During fiscal years 2013–2017, we issued 37 Disaster Assistance grant audit reports that disclosed challenges with FEMA’s Public Assistance insurance process. The major recurring challenges we identified included (1) Duplicate benefits in which subrecipients claimed FEMA reimbursement for costs that were covered by insurance; (2) Insufficient insurance in which subrecipients did not obtain and maintain sufficient insurance coverage required as a condition for receiving Federal disaster assistance; and (3) Misapplied or misallocated insurance proceeds in which subrecipients received insurance proceeds, and misapplied or did not allocate those proceeds to FEMA projects.