NCPA - National Center for Policy Analysis

States Misspent $500 Million In Federal Emergency Aid

June 21, 2000

The Federal Emergency Management Agency is demanding that states and local communities return nearly a half-billion dollars in disaster relief funds to the federal government because the funds were misspent. Auditors say the money wasn't deserved because, in some cases, work was not completed as promised or the recipients got paid twice -- once by the government and once by insurers.

  • FEMA charges the state of Virginia misspent $3.4 million to clear three feet of snow from its roads after blizzards in 1996.
  • The sheriff's office in New Orleans has returned $56,000 for flood cleanup work performed by prisoners working for free.
  • California was required to repay $1.4 million received to control a wildfire that duplicated money recovered in a civil lawsuit.
  • A former Florida parks official was indicted after authorities couldn't locate federally-purchased palm trees his agency was supposed to replant after a hurricane.

In all, FEMA has been able to return to the U.S. Treasury $1.3 billion in federal disaster aid since April 1996. That includes some of the $442 million worth of reimbursements recovered by auditors, as well as funds set aside for particular disasters but never spent.

Source: Larry Margasak (Associated Press), "Government Orders States to Give Back $500 Million," Washington Times, June 21, 2000.


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