12.12.14

McCaul, Brooks: New GAO Report Shows FEMA Put Millions of Dollars at Risk of Improper Use and Fraud

Media Contact: Lauren Claffey; April Ward (202) 226-8477

WASHINGTON, D.C. – Today, the Government Accountability Office (GAO) released a new report that details Federal Emergency Management Agency’s (FEMA) new methods to detect improper and potentially fraudulent payments.

The 70-page report, entitled “Hurricane Sandy: FEMA Has Improved Disaster Aid Verification but Could Act to Further Limit Improper Assistance,” was originally requested by Rep. Michael McCaul, R-Texas, chairman of the Committee on Homeland Security, and Rep. Susan W. Brooks, chairman of the Subcommittee on Emergency Preparedness, Response, and Communications.

Chairman McCaul: “GAO found that FEMA put 39 million of taxpayers’ dollars at risk of becoming improper or fraudulent. This is reckless and simply unacceptable. FEMA needs to be more vigilant in order to reduce the misuse of disaster aid. I am encouraged they have taken positive steps since Hurricane Katrina to reduce their volume of improper payments following a disaster, but it isn't enough. I look forward to working with the agency as they implement the recommendations in this report."  

Subcommittee Chairman Brooks: “FEMA made $1.4 billion in potentially improper Federal assistance payments following Hurricane Katrina. As a U.S. Attorney in Indiana, my office was among many across the country prosecuting cases related to these fraudulent payments for Hurricane Katrina. I was pleased to learn in the Government Accountability Office's report that FEMA has made progress to address waste, fraud and abuse since Hurricane Katrina. However, as the GAO found, FEMA still provided $39 million in potentially improper financial assistance after Hurricane Sandy.  FEMA must continue working to improve its policies, procedures and systems to ensure that every dollar of vital disaster response and recovery funding goes to those truly in need of disaster assistance." 

GAO found that FEMA and state governments faced challenges in collecting the appropriate data to help prevent duplicative payments from overlapping sources. FEMA recently took steps to streamline data sharing among programs, including initiating a committee to explore best practices on how to maintain and share relevant data needed to prevent potentially duplicative assistance in the future.

However, GAO identified $39 million, or 2.7 percent, were at risk of being improper or fraudulent. GAO recommends that FEMA collaborate with the Social Security Administration (SSA) to obtain and collect important data to detect duplicative assistance and to implement an approach to verify whether recipients have private insurance.

Read GAO’s full report HERE.

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