NCPA - National Center for Policy Analysis


June 15, 2007

The Federal Emergency Management Agency (FEMA) overpaid victims of the Gulf Coast hurricanes and is struggling to reclaim the money from tens of thousands of people it says shouldn't have been given aid, according to a USA Today analysis.

Major findings:

  • In total, FEMA overpaid residents by at least $485 million.
  • Once the money was given, the agency reviewed more than 120,000 aid registrations in which auditors concluded people were paid too much money or should not have been paid at all.
  • Disaster aid records show that FEMA has so far recovered $15.6 million -- about 3 cents for every dollar its auditors have identified as being improperly paid.
  • FEMA also is trying to get back $64 million from other disasters since 2004, collecting about 15 cents on the dollar.

Other audits suggest the overpayments go beyond what FEMA is trying to recover, says USA Today.  The Government Accountability Office estimated that the improper aid payments may total $1 billion.

"FEMA should aggressively pursue cases of fraud and misuse of funds, but I think they have to keep that effort separate from harassing taxpaying, hardworking storm survivors to pay back money FEMA either put in their hands or encouraged them to take," said Sen. Mary Landrieu (D-La.), who heads a disaster recovery subcommittee.

Source: Brad Health, "$485M overpaid to storm victims," USA Today, June 15, 2007.

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