Sneak Preview: FEMA Is Advised To Properly Staff Fraud Branch

(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Homeland Security (DHS) Federal Emergency Management Agency (FEMA) by the end of the year plans to evaluate the staffing and workforce requirements of its Fraud Prevention and Investigation Branch (FPIB) to ensure that FPIB has the personnel to effectively identify fraud risks in FEMA’s disaster assistance programs, in response to a recommendation by the DHS Office of Inspector General (OIG).

Through its Public Assistance and Individual Assistance programs, FEMA provides federal dollars from the Disaster Relief Fund each year for response and recovery activities related to declared disasters. For example, in 2017, FEMA obligated $14.6 billion for recovery from major disasters, including several major hurricanes.

With the pressure to distribute vast amounts of funds quickly for recovery, FEMA’s disaster assistance programs are susceptible to fraud. FEMA’s Fraud and Internal Investigations Division (FIID) promotes employee training to help identify and prevent fraudulent losses of FEMA funds and assets, as well as recoup such losses. As one of the offices under FIID, FPIB reviews the indicators of fraud, waste and abuse in the applications that disaster victims submit. It also investigates allegations of fraud. It investigated more than 8,800 fraud complaints from 2010 to 2017, leading to the recoupment of more than $51 million and preventing the fraudulent loss of another $67 million.

A May 2011 OIG audit reported weaknesses in FPIB’s fraud prevention efforts, such as insufficient resources and limited authority over FEMA programs. Although FEMA took steps to meet several of the recommendations from the 2011 audit, FEMA opted not to realign FPIB to a higher and more visible level in its structural hierarchy, as was recommended.

In a recently released follow-up audit, OIG found that FEMA has taken other steps to stress the importance of disaster assistance program fraud prevention. For example, it has standardized its system of querying claims and has applied additional business rules to flag potential fraudulent applications. However, OIG explained that FEMA must take additional, proactive steps to create and sustain a culture of fraud prevention and awareness. Specifically, FEMA must: (1) staff FPIB adequately to execute its mission effectively; (2) implement an effective process to monitor and discourage staff noncompliance with fraud prevention and awareness training requirements; and (3) establish a clear and consistent process for reporting suspected fraud.

(The full version of this story has now been made available to all for a limited time here.)

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