Auditors Still Finding Misused FEMA Katrina Funds
Policy + Politics

Auditors Still Finding Misused FEMA Katrina Funds

Mark Wilson/Getty Images

Federal auditors are still ferretting out the misuse of hundreds of millions of dollars in federal disaster relief disbursed to victims of Hurricane Katrina roughly nine years after the disastrous storm.

Just last week, the Department of Homeland Security’s Inspector General reported that $4.7 million in federal grants given to Hancock County, Mississippi have either not been used appropriately or not been used at all.

Related: GAO Flags FEMA’s Spending Practices

The auditors told the Federal Emergency Management Agency (FEMA) that it should recoup that money as soon as possible.

This was just a slice of the $87.7 million given to that county, and most of the funds had been spent properly, the watchdog report said. Still, the millions of unused or misused funds are notable as they are still being realized years after they were distributed.

FEMA’s disaster relief grants for the 2005 hurricane have long come under scrutiny.

A few years after the storm, auditors revealed that the agency had sent out hundreds of millions of dollars in improper funds to thousands of storm victims. The agency eventually had to send out letters to the victims—asking them to return millions of dollars deemed questionable—sometimes years after the checks had already been cashed and the money had already been spent.

Related: Shame on Congress for Robbing Hurricane Sandy Victims

Agency officials at the time attributed improper payments in the range of $385 million for hurricanes Katrina, Rita and Wilma, to processing errors and relaxed safeguards. The Daily Beast noted in 2011 that FEMA had not interviewed applicants or inspected property damage before distributing millions of dollars to victims for food, clothing and shelter—which led to thousands of improper payments that totaled about 10 percent of the total $7 billion FEMA had given to victims. To be sure, the monstrous recoupment effort did not apply to other disaster aid programs like Road Home, which was financed by a congressional block grant, The Huffington Post reported.

Still, the agency’s previous botched disbursement of emergency aid has auditors watching all government agencies including FEMA, but others as well, more closely when administering aid in more recent disasters. 

In the wake of 2012’s Hurricane Sandy, the Government Accountability Office reported that some agencies did not comply with a congressional mandate in the Disaster Relief Act that requires agencies to include their internal control plans detailing their expenses in order to increase oversight over that money.

At the time, the auditors recommended agencies improve their reporting procedures over the approximately $50 billion in appropriations for 2014 that went to 19 agencies and 61 different programs across the federal government for Hurricane Sandy victims.

Of course, if the IG’s are still auditing hurricane assistance from 2005, it’s likely going to take some time to make sure all of the relief funds used for the 2012 storm are accounted for.

Top Reads From the Fiscal Times: