FEMA Clueless On $18M In Wasted Storm Recovery Funds

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A watchdog told the Federal Emergency Management Agency (FEMA) in multiple reports to recover $18 million in misspent Hurricane Sandy disaster assistance but four years after the devastating storm hit the U.S. Eastern Seaboard, officials can’t say if the funds were ever returned.

The $18 million in wasted federal relief funds were identified in a Daily Caller News Foundation Investigative Group review of four Inspector General (IG) reports analyzing FEMA recovery efforts over a four-year period that followed the hurricane.

Coastal areas of New Jersey and New York bore the brunt of the damage. The agency awarded more than $25 billion in disaster aid to localities, primarily to New Jersey and New York, after the October, 2012, storm — the second-costliest hurricane in U.S. history.

“FEMA’s financial records do not provide readily available information specifically to link funds that have been de-obligated or offset to OIG recommendations,” FEMA spokeswoman Stephanie Moffett told TheDCNF.

The unrecovered funds may only be a small part of a much-bigger mess because the $18 million doesn’t include an additional $250 million in suspected duplicate payments FEMA sent to 29,000 Sandy disaster relief applicants who already had insurance. The FEMA IG reported the duplicate payments in 2015 but didn’t explicitly direct FEMA to recover them.

FEMA officials claim to have recovered more than $7 million in duplicate payments from 1,916 Sandy applicants, and the same officials also argue they have addressed 61 of the IG’s 79 total Sandy-related recommendations.

The agency tracks each financial transaction, but not recovered funds as a whole, and returns any disaster aid it recovers to its disaster relief fund.

FEMA, which spends an average of $10 billion on disaster assistance grants each year, has a long history of waste and fraud in managing relief grants, as well as a built-in resistance to recognizing the problem, according to its watchdog.

A December, 2016, IG report said FEMA “has not sufficiently held grant recipients financially accountable for improperly spending disaster relief funds,” questioning $457 million out of $1.55 billion in disaster relief funds it reviewed from 2015.

But FEMA rejected that claim, saying the IG didn’t sufficiently take into account its complicated processes. (RELATED: FEMA Spars With Investigators Over Allegations The Agency Wasted $3 Billion)

Waste and fraud is all but inevitable when the federal government hastily throws billions of dollars at disaster relief, Heritage Foundation DHS policy analyst David Inserra told TheDCNF.

“I think there’s a recognition there than when so much money is being handed out to so many recipients across the country, that there’s a potential for waste for fraud for abuse, those kinds of things,” Inserra said.

But that, Inserra said, reveals the heart of the problem: the federal government spends too much money — without enough scrutiny — on disaster relief.

States and localities funded the bulk of disaster relief dollars until Congress passed the Stafford Act in 1988, making it easier to obtain federal money, and forcing the federal government to pay 75 percent of the bill in any state of emergency.

The Stafford Act and its related regulations incentivized states to be less prepared for natural disasters, and encouraged them to rely too greatly on federal government aid, Inserra said.

“Basically it just came down to, we are over-federalizing disasters, even if it’s a tornado in just one state,” he said.

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