FEMA wants to recover money it wasted

The Federal Emergency Management Agency will try to recoup some of the aid fraudulently or otherwise wrongly obtained by individuals or families following hurricanes that struck last year, but auditors say it was FEMA’s fault the money was wasted.

The agency acknowledged it wrongly distributed tens of millions of dollars in aid and called the recoup move a routine step taken after any disaster. It said benefits were sometimes paid twice to the same recipient or to those were who ineligible after hurricanes Katrina, Rita and Wilma struck.

“In every disaster there are just some people who are bad apples who attempt to take advantage of the programs,” says Donna Dannels, the acting deputy director of disaster recovery at FEMA. Auditors, however, said FEMA was at fault for much of the abuse because of an inadequate and vulnerable accounting system.

Some $6.8 billion (3.9 billion pounds) in disaster assistance was distributed last year to 1.7 million households after the three major storms hit Louisiana and Mississippi, Texas and Florida.

FEMA has sent letters to 1,500 families asking them to return payments so far, most of which were $2,000 cash disbursements but which could go as high, legally, as $26,200 per household.

Individuals who receive a letter from FEMA will have a month to repay the requested amount before being charged interest. They also will have a chance to appeal but if the appeal fails and payment is not made, the debt will be turned over to the Treasury Department to collect.

FEMA expects to seek the return of aid from 2 percent to 3 percent of approved applicants. While officials could not estimate how much money that might involve, they said could be up to $100 million.

Some cases involved aid given to families who were later reimbursed by insurers but auditors have found that perhaps tens of thousands of improper payments were made because people were able to apply for and collect aid repeatedly, the Times said. Others were found to have received cash aid using false Social Security numbers, which FEMA did not check after they were submitted. One person used 15 different Social Security numbers to collect $41,000, the Times reported.