Billions of Dollars in FEMA COVID Relief Funds Went to “Large, Organized Fraud Schemes”
The famously incompetent government agency created by Jimmy Carter to provide the nation with disaster relief is involved in yet another scandal for doling out billions of dollars in COVID-19 aid that ended up being spent on fraudulent and wasteful causes that clearly did not qualify for the funding. It marks the latest of many transgressions at the Federal Emergency Management Agency (FEMA), which received nearly $100 billion in supplemental appropriations plus additional disaster relief funding to support its doomed pandemic response and recovery effort. Instead, the agency, which operates under the Department of Homeland Security (DHS), executed the cash giveaway without bothering to implement effective controls, resulting in “large, organized fraud schemes,” according to a recently published audit conducted by the DHS Inspector General.
More than $13.5 billion in pandemic recovery awards went to ineligible recipients and unallowable or unsupported costs, investigators found. The disaster relief money flowed to the illicit causes because FEMA failed to implement controls to ensure the funding went to eligible recipients, follow its own policies aimed at ensuring pandemic funding was used for allowable costs and maintain consistent data collection and management processes to inform decisions and allocate resources. For instance, FEMA’s Lost Wages Assistance (LWA) and Funeral Assistance programs awarded ineligible recipients around $3.7 billion in potentially fraudulent or duplicate payments because it relied on state workforce agencies for the management of the programs despite repeated warnings from the Department of Labor (DOL) and the DHS IG that self-certifications are high risk and may lead to improper payments. Adding insult to injury, FEMA did not require state workforce agencies to report LWA fraud, hindering the efforts of its watchdog to recover stolen funds and combat future fraud.
FEMA’s faulty process for reviewing funeral assistance expenses allowed the disbursement of duplicate payments to multiple parties for the same decedent, investigators found. The disaster relief agency also failed to follow its policies to ensure pandemic funding was used for allowable costs under federal law. “We identified approximately $8.2 billion in unallowable or unsupported costs and an additional $1.5 billion in over-obligated funding that could have been put to better use during the COVID-19 pandemic,” the DHS IG report states. FEMA was also slow to take action to recoup improper payments once they were identified and the beleaguered agency paid applicants beyond the maximum reimbursement amount. In a multitude of instances FEMA applied inconsistent document review guidance, resulting in payments for unallowable costs related to the funeral assistance program. This is why the agency watchdog summarized its latest probe in a sentence that reads: “Key finding: Ineffective Controls Led to COVID-19 Funding Being Susceptible to Fraud, Waste, and Abuse.”
https://www.judicialwatch.org/billions-of-dollars-in-fema-covid-relief-funds-went-to-large-organized-fraud-schemes/
