Proposed legislation would allow the Federal Emergency Management Agency to opt out of seizing back some of the $22 million in wrongfully distributed funds out of the hands of disaster victims.*
FEMA is investigating 160,000 cases where aid may have accidentally been given out to disaster victims. The claims come to a grand total of $643 million since 2005.
Under federal law, FEMA is required to attempt to recoup the money but some senators are hoping to halt the collection process.
Sen. Mark Pryor, an Arkansas Democrat, has proposed legislation that would allow FEMA to choose to waive debts that were caused by human error.
The Disaster Assistance Recoupment Fairness Act was approved by the Senate Homeland Security Committee Thursday.
After FEMA completes a review, the 160,000 statistic is expected to fall, said a FEMA official with knowledge of the review.
In the mean time, despite the proposed legislation, FEMA started to send out notices to approximately 5,500 disaster victims, totaling $22 million, asking them to pay back the funds wrongfully administered by the agency.
The official said the organization is being careful about sending out the notices so as not to alarm victims.
“We are taking every precaution,” the official said. “We want to make sure we get it right.”
In the past, however, the organization didn’t get it right. Lax requirements for dispensing aid after Hurricane Katrina caused thousands to think they deserved cash from FEMA, when they didn’t.
The errors, according to the agency, were not due to fraud. During the disasters of Hurricanes Katrina, Rita and Wilma, FEMA did not fully verify disaster victims’ information before rewarding aid, one of several factors leading to the wrongful distribution.
The result?
Nearly 14 percent of the aid handed out during 2005 shouldn’t have been.
Because of the accidental handouts victims were able to double dip. Some were cleared for insurance payouts and FEMA money for damages.
FEMA spokeswoman Rachel Racusen claims the agency has taken steps to prevent future errors like the ones that happened in the wake of Hurricane Katrina by training employees and enforcing verification of those who apply for aid.
“Under our current leadership, strong protections have been put in place to greatly reduce the error rate of improper disaster payments,” Racusen said via e-mail.
*Correction: The story initially indicated that the bill would prevent FEMA from taking back the funds. Instead, the bill would give FEMA the option not to take back the funds.