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FEMA Spars With Investigators Over Allegations The Agency Wasted $3 Billion

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Thomas Phippen Associate Editor
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Federal Emergency Management Agency (FEMA) officials say the agency was treated unfairly when the Office of the Inspector General (OIG) reported that $3 billion in disaster recovery grant funds may have been wasted.

An OIG audit of $1.55 billion in FEMA disaster relief grants released Wednesday suggested the agency “has not sufficiently held grant recipients financially accountable for improperly spending disaster relief funds.” But FEMA believes that claim doesn’t take into account the complexity of the agency’s work.

OIG found that $457 million out of FEMA’s total $1.55 billion disaster recovery grants awarded in 2015 were unallowable costs, and said the agency could save billions by managing grants better. (RELATED: FEMA Wasted About $3 BILLION In Grants Last Year)

“The report falls short in recognizing the complexity and scope of the work that FEMA does and fairly portraying the Agency’s successes and challenges,” Craig Fugate, administrator of FEMA, told The Daily Caller News Foundation.

Fugate said his agency tried several times to address the claims in the OIG’s report to no avail.

“The OIG did not attempt to address our input despite numerous offers to provide FEMA subject matter experts to work through any issues or questions expressed by the OIG in the report,” Fugate said.

OIG claims that nearly 30 percent of the grants audited included wrongful costs like duplicate payments, improper contract costs and unauthorized expenditures, and the agency could save $30 billion by addressing the weaknesses in grant oversight.

FEMA said the auditors created an “exaggerated figure” of how much money the agency could save “based on incorrect assumptions.”

The audit “could mislead the public to conclude that FEMA is not exercising appropriate stewardship over grant funds,” FEMA said in its response to the audit.

FEMA representatives did not respond to the OIG’s finding that $457 million in grant money was wasted, but the agency said it had made progress in how they manage grant programs.

“The report also falls short in recognizing the positive impact of the work FEMA has done to improve its policies and procedures related to disaster grants and programs,” Fugate said to TheDCNF. “FEMA has reviewed how it works with communities to provide Public Assistance grants; developed a multi-year effort to modernize the grants management process; evaluated trends and root causes for Public Assistance appeals; and refined Public Assistance and Hazard Mitigation policies to clarify definitions, insurance requirements, and to provide guidance on procurement requirements.”

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