Fraud and Waste Plague Aftermath of Katrina & Rita
by Jim Kouri, CPP
Hurricanes Katrina and Rita destroyed homes and displaced millions of individuals. While the Federal Emergency Management Agency continues to respond to this disaster, the Government Accountability Office's previous investigation identified significant control weaknesses -- specifically in FEMA's Individuals and Households Program (IHP) and in the Department of Homeland Security's (DHS) purchase card program -- resulting in significant fraud, waste, and abuse.
The GAO's latest investigation addressed whether FEMA provided improper and potentially fraudulent rental assistance payments to registrants at the same time it was providing free housing via trailers and apartments; duplicate assistance payments to individuals who claimed damages to the same property for both hurricanes Katrina and Rita; and IHP payments to non-US residents who did not qualify for IHP.
To address these objectives, GAO analysts data mined and analyzed FEMA records and interviewed city officials, university officials, and foreign students. GAO investigators also traveled to Louisiana and Texas to inspect selected property items and to investigate improper housing payments to individuals living in FEMA-provided housing.
FEMA continued to lose tens of millions of dollars through potentially improper and/or fraudulent payments from both hurricanes Katrina and Rita. These payments include $17 million in rental assistance paid to individuals to whom FEMA had already provided free housing through trailers or apartments.
In one case, FEMA provided free housing to 10 individuals in apartments in Plano, Texas, while at the same time it sent these individuals $46,000 to cover out-of-pocket housing expenses. In addition, several of these individuals certified to FEMA that they needed rental assistance.
FEMA made nearly $20 million in duplicate payments to thousands of individuals who claimed the damages to the same property from both hurricanes Katrina and Rita. FEMA also made millions in potentially improper and/or fraudulent payments to nonqualified aliens who were not eligible for IHP.
For example, FEMA paid at least $3 million to more than 500 ineligible foreign students at four universities in the affected areas. This amount likely understates the total payments to ineligible foreign students because it does not cover all colleges and universities in the area. FEMA also provided potentially improper and/or fraudulent IHP assistance to other ineligible non-U.S. residents, despite having documentation indicating their ineligibility.
FEMA's difficulties in identifying and collecting improper payments further emphasized the importance of implementing an effective fraud, waste, and abuse prevention system.
For example, GAO previously estimated improper and potentially fraudulent payments related to the IHP application process to be $1 billion through February 2006. As of November 2006, FEMA identified about $290 million in improper payments and collected about $7 million. GAO's previous work on the DHS purchase cards also showed significant problems with property accountability.
Of 246 items the GAO investigated that FEMA purchased for hurricane relief efforts using DHS's purchase cards, 85 items--or 34 percent--are still missing and presumed lost or stolen.
Jim Kouri, CPP is currently fifth vice-president of the National Association of Chiefs of Police. He's former chief at a New York City housing project in Washington Heights nicknamed "Crack City" by reporters covering the drug war in the 1980s. In addition, he served as director of public safety at a New Jersey university and director of security for a number of organizations. He's also served on the National Drug Task Force and trained police and security officers throughout the country. He writes for many police and crime magazines including Chief of Police, Police Times, The Narc Officer, Campus Law Enforcement Journal, and others. He's appeared as on-air commentator for over 100 TV and radio news and talk shows including Oprah, McLaughlin Report, CNN Headline News, MTV, Fox News, etc. His book Assume The Position is available at Amazon.Com, Booksamillion.com, and can be ordered at local bookstores. Kouri holds a bachelor of science in criminal justice and master of arts in public administration and he's a board certified protection professional.