FEMA gets guff about policies designed to curb financial waste
Officials from at least two Gulf Coast states plan to ask the Federal Emergency Management Agency to rescind a recently announced set of reforms designed to rein in waste, fraud, and abuse in the agency's disaster assistance programs. State officials contend the reforms, which were announced Monday – a full month and a half into hurricane season – caught them off guard. FEMA has scheduled a conference call today with the states on the proposed reforms.
"Historically, FEMA doesn't make major changes until it's at least talked to the states and tried to assess the impact," says Mark Smith of the Louisiana Office of Homeland Security and Emergency Preparedness. "That hasn't been done yet, and these changes need to be stopped in their tracks."
The most high-profile – and controversial – change announced this week involves "expedited assistance," a FEMA program used during severe disasters that gives victims emergency funds to be spent for items like food, water, and gas immediately after a disaster. Last year, FEMA handed out $2,000 debit cards to cover such expenses after Hurricane Katrina, but this year, it plans to give out just $500 per family in cash or direct deposits to bank accounts. The program will begin only after states sign an agreement to pay for 25 percent of the total aid tab. And Choicepoint, the data-services company, will verify the identity and eligibility of every applicant, a safeguard not in place last year.
Smith says his state will use the conference call to highlight the difficulty of meeting the 25 percent requirement, which would have cost Louisiana $375 million if it had been in place after Katrina.
"If you look at the condition of the state of Louisiana and the overall loss of revenue in oil and gas and fishing industry dollars, it's pretty severe – and it's not over," Smith says. "So any additional cost is a huge challenge." Other gripes include the $500 ceiling, which Smith says "isn't a whole lot of money when you've lost everything."
FEMA will increase financial controls in other areas, including the payment of housing assistance. The agency plans to pay apartment owners directly, instead of handing out checks to families that can be used to pay rent. Victims checking into federally financed hotel rooms will have to prove their identity with photo identification. Democratic Sen. Mary Landrieu of Louisiana has questioned whether FEMA's controls are too stringent.
"The solution is not to penalize future victims, as they are now proposing," she said in a statement, "but to tighten management, monitoring, and enforcement."
Still, FEMA contends the reforms are necessary. This spring, auditors found that between $600 million and $1.4 billion in the funds distributed after Hurricanes Katrina and Rita were inappropriately spent. Some people who claimed to be victims used the $2,000 debit cards to purchase nonessentials like an all-inclusive vacation in the Dominican Republic, adult erotica, and the services of a divorce lawyer in Houston.
"If you put $2,000 in someone's hands, that's a lot of money," FEMA chief David Paulison said Monday. He emphasized that the smaller amount of money will make victims "more likely to spend it on those necessities they really need." Since the expedited assistance program is "an internal policy," Paulison added, "we can be flexible with it," adjusting the payments higher for more serious disasters.
FEMA also contends that Hurricane Katrina, a more severe disaster than most, forced it to up the amount of money doled out as expedited assistance: During 2004, when three hurricanes pummeled Florida, the agency gave each family $300 or $500 in immediate aid.