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Nearly $40 Million in FEMA Sandy Aid Possibly 'Improper or Fraudulent'

A GAO report says $39 million may have been wasted, but also says the level of questionable payments is far lower than after Katrina and Rita.

Almost $40 million of the aid provided by FEMA to Hurricane Sandy may have been "improper or fraudulent," but that figure represents a huge improvement over the percentage of FEMA aid deemed questionable after Hurricane Katrina and Hurricane Rita, according to a watchdog report released Friday.

The Government Accountability Office (GAO), an independent federal agency that conducts audits for Congress, identified $39 million in possible improper payments, or 2.6 percent of the $1.6 billion disbursed by FEMA for Sandy relief via its Individuals and Households Program to 183,000 survivors. Estimates of the questionable payments after Katrina and Rita, which hit the Gulf Coast in 2005, ranged from 10 to 22 percent of $7 billion in FEMA aid, or as much as $1.4 billion. GAO identified payments as potentially improper or fraudulent, according to the report, "if they had characteristics indicating … that ineligible recipients or duplication of assistance could be involved."

Rep. Michael McCaul (R.-Texas), who called for the report as chairman of the House Homeland Security Committee, called the level of possible waste “reckless and simply unacceptable,” and said FEMA needed to be more vigilant. "I am encouraged they have taken positive steps since Hurricane Katrina to reduce their volume of improper payments after a disaster, but it isn’t enough," said McCaul.

FEMA officials who reviewed the GAO findings said that at least $6.1 million of the $39 million were not improper or fraudulent, according to the report, "but did not provide evidence to support their conclusion for each payment."