FEMA Improper Payment Recovery: Agency Hasn't Tried To Recoup $643 Million

NEW ORLEANS — The Federal Emergency Management Agency hasn't tried to recoup about $643 million in improper payments made to victims of Hurricane Katrina and other disasters in the wake of a judge's order more than three years ago, according to a government audit issued Monday.

The improper payments have gone uncollected for more than three years because FEMA hasn't given its final approval to a new process for recovering the money, auditors found in a report by the Department of Homeland Security's inspector general's office.

The federal agency has distributed more than $7 billion in disaster assistance payments since hurricanes Katrina and Rita struck the Gulf Coast in 2005. An estimated 160,000 applicants received about $643 million in improper payments resulting from fraud, FEMA errors or other mistakes.

In June 2007, a federal judge in New Orleans ordered FEMA to halt its debt collection activities until the agency made certain changes to its collection process. Government lawyers drafted a new process designed to comply with standards set by DHS, but the audit says FEMA's chief hasn't signed off on the plan yet.

A new process for recovering improper payments has been awaiting the approval of FEMA's administrator since late 2008. Current Administrator Craig Fugate was confirmed by the Senate in May 2009.

"Further delay only makes aging debts more difficult to collect," Inspector General Richard Skinner wrote in a letter to Fugate dated Dec. 10.

FEMA spokeswoman Rachel Racusen said the agency is "committed to being responsible stewards of taxpayer dollars" and is completing plans to recoup misspent funds.

"FEMA is legally required to recover any improper payments," she said in a statement. "A 2007 lawsuit challenging the recoupment process established under previous administrations, required us to suspend these efforts, and we have been working in the years since to rectify these problems."

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Online:

DHS Inspector General's office report: http://www.dhs.gov/xoig/assets/mgmtrpts/OIG_11-21_Dec10.pdf

Comments

[oxjr]

01:33 PM on 01/04/2011

So does an overpayment or fraud payment fall under rules of credit and are nullified after 7 years or is it considered a crime and fall under statute of limitation rules? If it is considered a debt, is it when the money was given out (up to 5 years ago) or when Fema starts the collection process?

[smilingasa]

12:30 PM on 01/04/2011

I hope FAMA is just as slow sending money to New Jersey's Republican Governor who went begging for a BAILOUT for snow removal!

[Fred Hood]

11:33 AM on 01/04/2011

I bought two tarps on line....cheap.....lady said she had hundreds for sale......got two they were new and stamped FEMA katrina not for resale............

[terradale]

11:07 AM on 01/04/2011

I'd really like to see the report naming individuals. Because my first hand experience of going thru Hurr Ivan tells a different story. FEMA also pays local governments for clean up assistance with sewer and water concerns and that in turn brought out the greedy politicians who ended up pocketing the money and never cleaning up the waterways. I just hate that many assume that $4018.75 overpayment went to individuals. It didn't, when it came to actual individuals affected - FEMA doled out the money sparingly. It was the contractors and local governments that made out like bandits.

[Rick Eriksen]

10:30 AM on 01/04/2011

So guys con you out of money, then you want it back...so you ask them, and the con you some more telling you that sure the check is in the mail...but you are the governemnt and you are not stupid so you ask again, and again you get conned...this porcess goes on over and over and never ends creating more costs in the process...we have some really dumb people working in the government...no wonder they have to give governemnt workers all kinds of safety nets after they retire...on thier own they would drown in thier own bath tubs...

[imayes]

10:28 AM on 01/04/2011

It's called "leakage". You seen "Goodfellas" right?

[WylieSD]

10:13 AM on 01/04/2011

This, the government you liberals want to give even more power to.

[american-dolt]

10:07 AM on 01/04/2011

Still doing a Heck of a Job Brownie...

[pattiepcomedy]

09:22 AM on 01/04/2011

Looks like someone needs to be fired. If I was this negligent, my butt would be in jail. No wonder America is such a mess. Go after the money!!

[11thGenerationAmerican]

09:11 AM on 01/04/2011

What most of you don't realize is that much of this work is contracted out to large engineering firms like Fluor Daniels and AECOM. So, when you're complaining about FEMA you're really complaining as much about their technical assistance contractors in private industry.

[KIVPossum]

09:46 AM on 01/04/2011

Wrong. When you contract something out, you monitor the contractors.

[11thGenerationAmerican]

02:34 PM on 01/08/2011

Wrong. The contractors are sent into the field as if they are FEMA employees. They are responsible for their bad eligibility calls. It takes years to undo what these people do in the field.

[Willie12345]

09:10 AM on 01/04/2011

What the heck, it's only the tax payers money.

[seawillow]

09:10 AM on 01/04/2011

When it isn't yours, its less important.

[2garen]

09:34 AM on 01/04/2011

Who is your Senators and your Congressman?
When you listen to some our representatives they will tell you how trivial any amount of money savings are.
Start demanding from their offices to do something about it.
By the way tell them to nail the contractors while they are at it. NOW!

[KIVPossum]

09:09 AM on 01/04/2011

Throw money out the window and then try to find it blowing around on the street.

[PWM]

09:03 AM on 01/04/2011

Where is the misplaced $2.5 trillion Rummy announced the day before 9/11 that the DoD could not account for?

Any ideas.

[jmk6653]

08:57 AM on 01/04/2011

Stuff like this is just sick - why haven't they collected this money??? The government waste in EVERY area is just awful - I would imagine that a lot of this money would be collectable and we could use it somewhere - the heads of FEMA should be removed and replaced with someone that can do the job