Hurricane

This report provides a summary of our previous findings and recommendations, which may inform future disaster response efforts.  Based on our prior work, we identified a pattern of internal control vulnerabilities that negatively affect both disaster survivors and disaster program effectiveness that may hinder future response efforts, including shortcomings in acquisition and contracting controls, interagency coordination challenges, and insufficient privacy safeguards that affect disaster survivors.  Additionally, FEMA did not adequately oversee disaster grant recipients and subrecipients, manage disaster assistance funds, or oversee its information technology environment.  This report discusses these vulnerabilities and the correlating recommendations we previously made that, if implemented, would better prepare FEMA to respond to future disasters.  We made no new recommendations. 

During the course of the audit, we determined that FEMA provided hotel rooms to about 90,000 households (nearly 227,000 survivors) after the 2017 California wildfires and Hurricanes Harvey, Irma, and Maria.  However, FEMA did not oversee and manage the Transitional Sheltering Assistance (TSA) program to ensure it operated efficiently and effectively to meet all disaster survivors’ needs.  We made two recommendations that when implemented, will improve FEMA’s oversight and pre-disaster planning of transitional sheltering.  FEMA concurred with both recommendations and the recommendations are resolved and open.

Harris County, Texas needs additional technical assistance and monitoring to ensure grants management comply with Federal procurement regulations.  The County’s procurement policies, procedures, and business practices were not adequate to expend disaster grant funds in accordance with Federal procurement regulations and Federal Emergency Management Agency (FEMA) guidelines.  We recommended FEMA disallow $2.7 million in ineligible costs and require Texas to work with the County to incorporate Federal procurement regulations when using Federal funds, and review procurement activities before the County awards future contracts.  We made three recommendations that will help improve the procurement capability of Harris County, Texas.  FEMA concurred with all three recommendations. 

The Federal Emergency Management Agency (FEMA) did not balance its Manufactured Housing Unit (MHU) program costs with disaster-related housing needs.  In response to Hurricane Harvey in Texas, FEMA overestimated the number of MHUs it needed by nearly 2,600, which amounted to purchase, transportation, and storage costs of at least $152 million.  The agency also overestimated the number of tank and pump systems (TPS) it needed to operate the fire sprinklers, by nearly 2,400, which amounted to purchase and transportation costs of approximately $29 million.  Following Hurricane Harvey, FEMA focused on providing prompt assistance and did not emphasize financial accountability and recordkeeping.  Had FEMA better managed and overseen the MHU program, it could have put an estimated $182 million to better use to assist survivors from Hurricane Harvey or other disasters.  We made four recommendations that will help FEMA better manage its MHU program.  FEMA concurred with the recommendations. 

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.

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.

The Diamondhead Water and Sewer District (District), received a Federal Emergency Management Agency (FEMA) grant award of $49.3 million from the Mississippi Emergency Management Agency (Mississippi) for damage resulting from Hurricane Katrina in 2005. We had concerns because it took the District about 10 years to break ground on its new wastewater treatment plant. We also wanted to determine whether FEMA accurately applied its “50 Percent Rule.” we identified $1.5 million of improper procurement, unsupported costs, duplicate insurance benefits, and uncompleted project costs that FEMA should disallow to the District. These problems were largely the result of Mississippi not fulfilling its grantee responsibility to ensure the District properly managed FEMA funds. Mississippi is responsible for monitoring subgrant activities, and is compensated with Federal funds to support subgrant management and oversight. It is FEMA’s responsibility to hold Mississippi accountable for proper grant administration.

We determined the County has established policies, procedures, and business practices to properly account for and expend FEMA Public Assistance grant funds.  Therefore, if the County adheres to those policies, procedures, and business practices, FEMA has reasonable assurance that the County will properly manage the estimated $55.4 million in FEMA project funding awarded for replacement of the facility.

For the projects we reviewed, we identified $1,771,894 (Federal share $1,328,921) of costs that FEMA should disallow.  We recommended that Regional Administrator, FEMA Region IV, disallow $1,771,894 of ineligible costs and direct the Florida Division of Emergency Management to monitor the County’s performance for compliance with Federal grant requirements on open projects.