FEMA

Modernization has improved the Federal Emergency Management Agency’s (FEMA) Federal Insurance and Mitigation Administration (FIMA) ability to timely process policies and claims data, enhanced reporting capabilities, and provided more reliable address validation. Despite these improvements, the transition to PIVOT did not resolve longstanding data reliability issues, as FIMA migrated the vast majority of its historical legacy data, including errors, into the PIVOT system. FIMA also deployed PIVOT without adequate controls to prevent potentially erroneous transactions from being recorded in the system. We made three recommendations to improve the quality of data in the modernized NFIP system and educate stakeholders on data quality issues that exist in historical NFIP data. FEMA concurred with all three recommendations.

The Federal Emergency Management Agency (FEMA) mismanaged the distribution of commodities in response to Hurricanes Irma and Maria in Puerto Rico.  FEMA lost visibility of about 38 percent of its commodity shipments to Puerto Rico, worth an estimated $257 million.  Commodities successfully delivered to Puerto Rico took an average of 69 days to reach their final destinations.  Inadequate FEMA contractor oversight contributed to the lost visibility and delayed commodity shipments.  FEMA did not use its Global Positioning System transponders to track commodity shipments, allowed the contractor to break inventory seals, and did not ensure documented proof of commodity deliveries.  Given lost visibility and delayed shipments, FEMA cannot ensure it provided commodities to Puerto Rico disaster victims as needed to sustain life and alleviate suffering as part of its response and recovery mission.  In addition, FEMA’s mismanagement of transportation contracts included multiple contracting violations and policy contraventions that ultimately led to contract overruns of about $179 million and at least $50 million of questioned costs.  We made five recommendations that, if implemented, should improve FEMA’s management and oversight of its disaster response activities. FEMA concurred with four of the five recommendations.  Recommendations 1 through 4 are considered open and resolved.  Recommendation 5 is considered resolved and closed

As of October 2016, the Recovery School District in Louisiana (RSD) had received a $1.5 billion Public Assistance grant from Louisiana, a Federal Emergency Management Agency (FEMA) grantee, for damages resulting from Hurricane Katrina.  We examined $1.3 billion for a consolidated project as part of the total amount awarded.  In some instances, RSD accounted for and expended portions of the $1.3 billion in Public Assistance grant funds we reviewed according to Federal regulations.  However, FEMA improperly awarded $216.2 million to repair or replace more than 292 Orleans Parish school facilities in RSD.  We made eight recommendations to FEMA to de-obligate $216.2 million of ineligible costs; follow Federal regulations and FEMA guidelines; and re-evaluate documented proof of assessments for the 35 identified projects and reclassify them, as appropriate, to repair-eligible, and de-obligate the cost difference.  FEMA concurred with recommendations 2 through 7 but did not concur with recommendations 1 and 8.  We consider recommendations 2 through 7 resolved and open; recommendations 1 and 8 are unresolved and open.

The Federal Emergency Management Agency (FEMA) is not adequately managing severe repetitive loss (SRL) properties covered by the National Flood Insurance Program (NFIP).  FEMA has not established an effective program to reduce or eliminate damage to SRL properties and disruption to life caused by the repeated flooding.  Primarily, FEMA does not have reliable, accurate information about SRL properties.  Secondly, FEMA’s Flood Mitigation Assistance (FMA) program, which aims to mitigate flood damage for NFIP policyholders, provides neither equitable nor timely relief for SRL applicants.  We made three recommendations to FEMA to ensure the accuracy of the SRL list, as well as equitable and timely distribution of mitigation funding, and promoting the use of National Flood Insurance Program (NFIP) Increased Cost of Compliance coverage.  FEMA concurred with all three of the recommendations

The Federal Emergency Management Agency’s (FEMA) Individuals and Households Program (IHP) has no assurance of applicants’ eligibility for Small Business Administration (SBA) Dependent Other Needs Assistance (ONA) payments.  According to OMB Circular A-123, Appendix C, when documentation or verification is non-existent to support eligibility payment decisions it must be considered improper.  FEMA did not collect sufficient income and dependent documentation or verify self-reported information to determine whether applicants below the income threshold, known as Failed Income Test (FIT), were eligible for SBA Dependent ONA payments.  FEMA believed requiring documentation or verification would delay the disbursement of assistance and relied on an honor system to make eligibility and payment decisions.  We determined, according to FEMA-provided data, it has paid, and we are questioning, the more than $3.3 billion in improper payments to applicants deemed as FIT for SBA Dependent ONA since 2003.  Additionally, FEMA has not evaluated the program risk associated with not collecting or verifying income information.  Per Federal requirements, agencies must conduct risk assessments to determine whether programs are susceptible to improper payments.  Rather, FEMA assessed IHP at the overall program level and did not specifically evaluate each IHP form of assistance, such as SBA Dependent ONA.  These weaknesses have allowed applicants self-certifying income and dependent information to receive less oversight, despite posing the greatest risk for improper payments.  FEMA cannot assure Congress and taxpayers it is a prudent steward of Federal resources, and adequately assesses the risks of improper payments.  FEMA did not concur with all three report recommendations.  Therefore, these recommendations are considered unresolved and open.

We identified debris removal contract performance issues and concerns.  In the report, we discuss our observations regarding the use of pre-disaster debris removal contracts in Florida following Hurricane Irma.  We also emphasize how FEMA can benefit from implementing effective controls to track systemic issues after a disaster and ensure FEMA follows procedures for uploading required documentation to support debris removal costs for proper grant management.  The report contains no recommendations.

The Federal Emergency Management Agency did not properly award or oversee its contract with Corporate Lodging Consultants (CLC) to administer disaster survivors’ hotel stays.  These deficiencies occurred because FEMA officials did not ensure staff responsible for the Transitional Sheltering Assistance (TSA) contract award and oversight had the guidance and training they needed to be effective.  As a result, FEMA released personally identifiable information for about 2.3 million disaster survivors, increasing the survivors’ risk to identity theft.  We made six recommendations that when implemented should strengthen FEMA contracting and compliance with Federal Acquisition Regulations and DHS requirements.  FEMA concurred with all six of our recommendations.

The Puerto Rico Electric Power Authority (PREPA) complied with Federal procurement requirements for its noncompetitive procurement of the Whitefish contract.  However, the contract costs may not have complied with Federal cost principles that costs must be reasonable to be eligible for Federal awards.  PREPA’s oversight of the Cobra contract did not comply with PA program guidelines.  Finally, FEMA’s Public Assistance grant to PREPA for the Cobra contract did not fully comply with PA program guidelines.  We made two recommendations for FEMA to provide technical assistance to Puerto Rico to ensure compliance with Federal regulations and PA program guidelines.  We made two other recommendations for FEMA to develop guidance to verify its subrecipients’ oversight of time and material contracts and determine the reasonableness and eligibility of time and material contract costs.  FEMA concurred with three of the recommendations and did not concur with one recommendation.

We contracted this audit with Cotton & Company LLP, which found that FEMA did not ensure the Florida Department of Emergency Management (FDEM) monitored the Polk County School Board (PCSB) to ensure it established and implemented policies, procedures, and practices to account for and expend PA grant funding in accordance with Federal regulations and FEMA guidance.  For example, PCSB was unable to support $46,168 in food spoilage costs; requested and received funding through a Florida Public Assistance grant for ineligible contract costs incurred under Project 2658 for debris removal and related costs; and charged $897 in unallowable costs associated with ineligible fringe benefits for substitute employees.  We made 13 recommendations that, when implemented, should improve PCSB’s management of FEMA Public Assistance funds.  FEMA concurred with our 13 recommendations.