By SCOTT AMEY
The Federal Emergency Management Agency (FEMA) is operating a program that waives erroneous disaster payments in the vast majority of cases. FEMA errors resulted from manual processing errors, duplication of payments, failure of personnel to verify loss, and other mistakes.
According to a Department of Homeland Security Inspector General report, the Disaster Assistance Recoupment Fairness Act of 2011 (DARFA) waivers are being granted in nearly all cases. As of June 22, 2012, FEMA adjudicated 7,439 cases totaling $37,094,697 that were initially identified for recoupment. Of that amount, FEMA has granted waivers for applicants in approximately 96 percent of the cases it has reviewed. Specifically, FEMA has granted 7,160 waivers and denied 279 waivers totaling $35,497,327 and $1,594,129, respectively. Additionally, FEMA has expended an estimated $2,589,076 on the program, including planning and implementing provisions of the waiver process, training employees, and conducting waiver activities. For those who weren’t math majors, that means that the government debt waiver program is costing $1 million more than the amount of all program recoveries.
DARFA (see Sec. 565) authorizes FEMA to waive debt owed to the government because of an improper disaster assistance payment if the payment was caused by an error by FEMA, was not the fault of the debtor, and the collection would be against equity and good conscience. A waiver is also dependent on the debtor having a household income of less than $90,000 per year. A household with an annual income of more than $90,000 whose case meets the other qualifying criteria is eligible for a partial waiver. Waivers cannot be granted in cases of fraud by the debtor. The law applies to improper disaster payments made between August 28, 2005 and December 31, 2010.
Improper payments are a major problem for the federal government, but reforms, like the “do not pay list,” are helping. The waiver of millions of dollars in improper payments and FEMA’s inability to recover even when the recipient is found guilty of fraud shows that FEMA needs changes to its claims, payment, and recovery systems to ensure that taxpayer dollars are not wasted. Say what you want about the disaster assistance program, but more should be done to ensure that FEMA is not sending out erroneous checks and that disaster victims receive what they need to restart.
Scott Amey is the general counsel for the Project On Government Oversight.