United States Government Accountability Office

GAO Report to the Committee on Homeland 

Security and Governmental Affairs, 

U.S. Senate 

HURRICANES 

KATRINA AND RITA 

DISASTER RELIEF 

Continued Findings of 

Fraud, Waste, and 

Abuse 

March 2007 

 

GAO-07-300 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2007

HURRICANES KATRINA AND RITA 

DISASTER RELIEF 

Continued Findings of Fraud, Waste, and 

Abuse 

Highlights of GAO-07-300, a report to the 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

The Federal Emergency 

Management Agency (FEMA) 

continues to respond to hurricanes

Katrina and Rita. GAO’s previous 

work identified suspected fraud, 

waste, and abuse resulting from 

control weaknesses associated

with FEMA’s Individuals and 

Households Program (IHP) and the 

Department of Homeland

Security’s (DHS) purchase card

program. Congress asked GAO to

follow up on this previous work to

determine whether potentially 

improper and/or fraudulent 

payments continued to be made.

GAO testified on the results of our

audit and investigative efforts on

December 6, 2006. This report

summarizes the results of our 

follow-up work. 

What GAO Recommends

GAO recommends that DHS direct 

FEMA to take six actions, including

establishing controls to prevent 

duplicate housing benefits to 

FEMA trailer and apartment 

residents and duplicate benefit 

payments for the same damages. 

GAO is also recommending that 

FEMA establish controls to prevent 

benefits to nonqualified aliens. 

FEMA outlined actions it plans to 

take or has taken that are designed

to address each of our six 

recommendations. However, 

FEMA plans to perform additional 

investigations on two of the

findings to determine whether

problems are systemic prior to

implementing recommended 

changes. 

In our December 6, 2006, testimony, GAO stated that FEMA made tens of 

millions of dollars of potentially improper and/or fraudulent payments 

associated with both hurricanes Katrina and Rita. These payments include 

$17 million in rental assistance paid to individuals to whom FEMA had 

already provided free housing through trailers or apartments. In one case, 

FEMA provided free housing to 10 individuals in apartments in Plano, Texas, 

while at the same time it sent these individuals $46,000 to cover out-ofpocket housing expenses. In addition, several of these individuals certified 

to FEMA that they needed rental assistance. 

FEMA made nearly $20 million in duplicate payments to thousands of 

individuals who claimed damages to the same property from both hurricanes 

Katrina and Rita. FEMA also made millions in potentially improper and/or 

fraudulent payments to nonqualified aliens who were not eligible for IHP. 

For example, FEMA paid at least $3 million to more than 500 ineligible

foreign students at four universities in the affected areas. This amount likely 

understates the total payments to ineligible foreign students because it does 

not cover all colleges and universities in the area. FEMA also provided 

potentially improper and/or fraudulent IHP assistance to other ineligible 

non-U.S. residents, despite having documentation indicating their 

ineligibility. 

Finally, FEMA’s difficulties in identifying and collecting improper payments 

further emphasized the importance of implementing an effective fraud, 

waste, and abuse prevention system. For example, GAO previously 

estimated improper and potentially fraudulent payments related to the IHP 

application process to be $1 billion through February 2006. As of November 

2006, FEMA identified about $290 million in overpayments and collected 

about $7 million. 

GAO Improper Payment Estimate and FEMA Reported Overpayments and Collections 

Finally, GAO’s work on DHS purchase cards showed continuing problems 

with property accountability, including items GAO investigated that could 

not be located 1 year after they were purchased. 

www.gao.gov/cgi-bin/getrpt?GAO-07-300.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gregory Kutz at 

(202) 512-7455 or kutzg@gao.gov. 
Contents 

Letter 1

Overview of Testimony 2

Conclusions 5

Recommendations for Executive Action 6 

Agency Comments and Our Evaluation 7 

Appendix I Testimony on Continued Findings of Fraud, Waste, 

and Abuse 11 

Appendix II Comments from the Federal Emergency Management 

Agency 36 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page i GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
United States Government Accountability Office

Washington, DC 20548 

March 15, 2007 

The Honorable Joseph I. Lieberman 

Chairman 

The Honorable Susan M. Collins 

Ranking Minority Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

On December 6, 2006, we testified before the Senate Committee on 

Homeland Security and Governmental Affairs on the continued findings of 

fraud, waste, and abuse associated with disaster relief for hurricanes 

Katrina and Rita.1

 In addition to the December 6 testimony, in several prior 

hearings, we testified that significant control weaknesses in the Federal

Emergency Management Agency’s (FEMA) Individuals and Households 

Program (IHP) and in the Department of Homeland Security’s (DHS) 

purchase card program left the government vulnerable to significant fraud,

waste, and abuse.2

 As we previously reported, the Robert T. Stafford 

Disaster Relief and Emergency Assistance Act (Stafford Act)3

 provides the 

basis for IHP. IHP is a major component of the federal disaster response 

efforts designed to provide financial assistance to individuals and 

households that have, as a direct result of a major disaster, necessary 

expenses and serious needs that cannot be met through other means. The 

Stafford Act allowed registrants to receive financial assistance up to a cap 

of $26,200 for disasters occurring in 2005. In early October 2006, FEMA 

reported to Congress that it had delivered approximately $7 billion in IHP 

aid for hurricanes Katrina and Rita. This IHP amount included expedited

 1

GAO, Hurricanes Katrina and Rita Disaster Relief: Continued Findings of Fraud,

Waste, and Abuse, GAO-07-252T (Washington, D.C.: Dec. 6, 2006).

2

GAO, Expedited Assistance for Victims of Hurricanes Katrina and Rita: FEMA’s

Control Weaknesses Exposed the Government to Significant Fraud and Abuse, 

GAO-06-403T (Washington, D.C.: Feb. 13, 2006); Hurricanes Katrina and Rita Disaster 

Relief: Improper and Potentially Fraudulent Individual Assistance Payments Estimated

to Be Between $600 Million and $1.4 Billion, GAO-06-844T (Washington, D.C.: June 14,

2006); and Purchase Cards: Control Weaknesses Leave DHS Highly Vulnerable to 

Fraudulent, Improper, and Abusive Activity, GAO-06-957T (Washington, D.C.: July 19, 

2006). Work on GAO-06-957T was performed jointly with the DHS Office of Inspector 

General. 

3

42 U.S.C. §5121–5206. 

Page 1 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
assistance, temporary housing assistance, repair and replacement of real 

and personal property, and other miscellaneous categories. 

Our December 6, 2006, testimony detailed our findings related to 

additional work we had performed since June 2006. Specifically, the 

testimony addressed our findings related to potentially improper and/or 

fraudulent (1) rental assistance payments FEMA made to registrants at the 

same time it was providing free housing via trailers and apartments; 

(2) duplicate assistance payments to individuals who claimed damages to

the same property for both hurricanes Katrina and Rita; and (3) IHP 

payments to nonqualified aliens who did not qualify for IHP. For purposes 

of the testimony, potentially improper and/or fraudulent payments 

referred to payments made by FEMA based on potentially improper and/or 

fraudulent registration data submitted by IHP registrants. The testimony 

also discussed (1) the importance of fraud prevention, and (2) the results 

of our investigation into property bought by FEMA using DHS purchase 

cards, which was subsequently lost or stolen. This report summarizes the 

findings detailed in our December 6, 2006, testimony and makes specific 

recommendations for corrective action. Our December 6, 2006, testimony 

is reprinted in appendix I.

In our testimony, we stated that our audit and investigative work on FEMA 

disaster relief payments associated with hurricanes Katrina and Rita 

identified additional indications of fraud, waste, and abuse. Specifically, 

we found that FEMA made nearly $17 million in potentially improper 

and/or fraudulent rental assistance payments to individuals after they had

moved into FEMA trailers. For example, after FEMA provided a trailer to a 

household—in January 2006—FEMA provided rental assistance payments 

to the same household in late January, February, and April of 2006 totaling 

approximately $5,500. In addition, FEMA provided potentially improper 

and/or fraudulent rental assistance payments to individuals living in 

FEMA-provided apartments. For example, FEMA made nearly $46,000 in 

rental assistance payments to at least 10 individuals living in apartments at 

the same time that the apartments were being paid for by FEMA through 

the city of Plano, Texas. Seven of 10 in this group self-certified to FEMA 

that they needed rental assistance, despite the fact that they were living in

rent-free housing. Because of limitations in FEMA data, we were not able

to identify the full extent of potentially improper rental assistance 

payments made to individuals in FEMA-provided apartments. 

Overview of 

Testimony

We also found that nearly $20 million in potentially improper and/or 

fraudulent payments went to individuals who, using the same property, 

Page 2 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
registered for assistance for both hurricanes Katrina and Rita. With few 

exceptions, FEMA officials explained that victims of both disasters are 

entitled to only one set of IHP payments for the same damaged property. 

However, FEMA officials told us that to increase the speed with which 

FEMA could distribute disaster assistance, they turned off the system edits 

that should have identified these types of duplicate payments.

Consequently, FEMA paid over 7,000 individuals IHP assistance twice for 

the same property—once for Hurricane Katrina and once for Hurricane 

Rita. These individuals received double payments for expedited 

assistance, rental assistance, and/or housing replacement. For example, 

FEMA records showed that one registrant received two housing 

replacement payments of $10,500 each, despite the fact that he had only 

one property to replace.

Millions of dollars of improper and potentially fraudulent payments also 

went to nonqualified aliens, including foreign students and temporary 

workers. For example, FEMA improperly paid at least $3 million in IHP 

assistance to more than 500 ineligible foreign students at four universities. 

Further, FEMA provided IHP payments that included expedited assistance 

and personal property totaling more than $156,000 to 25 individuals who 

claimed to be foreign workers on temporary visas. FEMA made these 

payments despite having copies of the work visas for several individuals, 

which should have alerted FEMA that the temporary workers were not 

eligible for financial assistance. Social Security Administration records 

also showed many of the individuals used invalid Social Security numbers, 

which could have alerted FEMA about the individuals’ ineligibility. In 

addition, several students and university officials stated that FEMA 

personnel encouraged all students—including international students who 

did not qualify for IHP assistance—that they were eligible for IHP financial

assistance. Because we did not obtain information from all universities in 

the Gulf region and because of unavailability of detailed data on other 

nonqualified legal aliens, we were not able to determine the magnitude of

improper and/or fraudulent payments in this area. 

Our findings also showed that the small amount of money that FEMA has 

been able to collect from improper payments further demonstrates the 

need to have adequate preventive controls. We previously reported that 

inadequate preventive controls related to the IHP application process 

resulted in an estimated $1 billion of potentially improper and/or 

Page 3 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
fraudulent payments through February 2006.4

 In contrast, as of November 

2006, FEMA had detected through its own processes about $290 million in

overpayments. This overpayment amount, which FEMA refers to as 

recoupments, represents the improper payments that FEMA had detected 

and had issued letters requesting repayments. However, through 

November FEMA had only collected nearly $7 million. Collection of only 

$7 million of an estimated $1 billion of fraudulent and improper payments

clearly supports the basic point we have previously made5

 that fraud 

prevention is far more efficient and effective than detection and collection. 

With respect to findings regarding the DHS purchase card program, we 

found weaknesses and breakdowns in accountability for property items 

bought for hurricanes Katrina and Rita relief efforts using government 

purchase cards.6

 For example, FEMA is still unable to locate 48 of the 143 

missing items (e.g., laptop computers, printers, and GPS units) identified 

in our July 2006 testimony. Moreover, 37 items were missing from an 

additional 103 items that we investigated for the July testimony. Thus, over 

a year after they were purchased, FEMA could not locate 85 of the 246 

items (34 percent) that we investigated; we presume these items are now 

lost or stolen. Our investigation also revealed that although FEMA was in 

possession of 18 of the 20 flat-bottom boats it had purchased for hurricane 

relief efforts, FEMA had not received the title to any of these boats. FEMA 

could not provide any information about the location of the remaining two 

boats. 

In response to our December testimony, FEMA acknowledged weaknesses 

in the processes and systems that resulted in ineligible individuals 

receiving assistance. FEMA stated that in the 15 months since Hurricane 

Katrina, FEMA has made great strides in correcting its deficiencies. 

Examples of improvements FEMA has informed us that it put into service 

include an upgraded registration application that FEMA expects will 

prevent duplicate registrations and an identity verification process so that 

all registrations for assistance are subjected to the same stringent criteria.

 4

To develop this estimate we followed a probability procedure based on random selections. 

We express our confidence in the precision of our particular sample’s results as a 95 

percent confidence interval. The 95 percent confidence interval surrounding the estimate 

of $1 billion ranges from $600 million to $1.4 billion.

5

GAO, Individual Disaster Assistance Programs: Framework for Fraud Prevention,

Detection, and Prosecution, GAO-06-954T (Washington, D.C.: July 12, 2006).

6

These property items were purchased by FEMA between June and November 2005. 

Page 4 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
FEMA believes that the stringent controls it instituted this past year 

improve its safeguards and will help eliminate processing errors and 

fraudulent abuse. FEMA further stated that it will consider and evaluate 

any new findings that can assist in improving its processes and 

procedures. 

Based on the findings in our testimony of December 6, 2006, we are 

recommending that the Secretary of Homeland Security direct the Director

of FEMA to take a number of actions to reduce the potential for fraud and

abuse. Recommendations include developing controls to prevent duplicate 

rental assistance benefits, increasing controls to prevent ineligible 

nonqualified aliens from receiving payments, and enabling controls to 

prevent duplicate payments to the same individual across multiple 

disasters. FEMA concurred with all recommendations and responded that 

it had taken, or is in the process of taking, actions to implement these 

recommendations. However, in its response FEMA indicated that on two 

of the recommendations it planned to perform investigations to determine 

the extent of the problems identified prior to implementing the 

recommendations. 

Ineffective preventive controls for FEMA’s IHP have resulted in 

substantial fraudulent and improper payments. The additional examples of

potentially fraudulent and improper payments, totaling tens of millions of 

dollars, that we highlighted in our December 2006 testimony further show 

that our estimate of $1 billion in potentially improper and/or fraudulent 

payments through February is likely understated. In addition, we did not 

include in this total potentially improper and/or fraudulent payments to 

individuals who received disaster assistance from FEMA even though they 

also received insurance payments for damaged property. With respect to 

property bought with government purchase cards, FEMA’s inability to find 

items 1 year after they were purchased, including laptop computers, 

printers, and GPS units, shows that FEMA property accountability 

controls are ineffective and possibly resulted in the loss or theft of 

government property. 

Conclusions 

We have previously provided 25 recommendations to DHS and FEMA to 

improve management of IHP and the purchase card program. FEMA and 

DHS had fully concurred with 19 recommendations, and substantially or 

partially concurred with the remaining 6 recommendations. DHS and 

FEMA also reported that they have taken actions, or plan to take actions, 

to implement all our recommendations. While we have not performed 

work to determine whether FEMA’s actions adequately address our 

Page 5 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
recommendations, if properly implemented, our recommendations from 

previous and current work should allow DHS and FEMA to rapidly provide 

assistance to disaster victims while at the same time providing reasonable

assurance that disaster assistance payments are accurate and properly 

authorized. As we have stated in prior reports addressing IHP improper 

and fraudulent payments, these recommendations only address specific 

weakness identified in this report and are only part of a comprehensive 

fraud prevention program that should be in place. Further, FEMA should

ensure that there are adequate manual processes in place to allow 

registrants who are incorrectly denied assistance to expeditiously appeal

the decision and receive aid. Also, FEMA should fully field test all changes

to provide assurance that valid registrants are able to apply for and receive

IHP payments. 

We recommend that the Secretary of Homeland Security direct the 

Director of FEMA to take the following six actions to address weaknesses 

identified in the administration of IHP. 

Recommendations for 

Executive Action 

To prevent rental assistance payments from being provided at the same 

time that FEMA provides free housing (including trailers, mobile homes, 

and apartments), FEMA should 

• develop processes for comparing IHP registrant data with FEMA direct 

housing assistance data to prevent IHP registrants from receiving 

payments for rental assistance covering the time they are living in 

FEMA-provided housing and 

• provide clear guidance to IHP registrants, including rental assistance 

registrants, indicating how the payments are to be used. 

With respect to duplicate assistance payments across multiple disasters, 

FEMA should implement and/or enable controls to prevent duplicate 

payments to the same individual from different disasters for the same 

damage done to the same address. 

To prevent improper payments to nonqualified aliens, FEMA should 

• provide clear guidance and training to FEMA and contractor employees 

on the specific types of aliens eligible for financial disaster assistance, 

and identify nonqualified aliens, and 

• develop processes to identify and deny assistance to nonqualified 

aliens who register for IHP assistance using valid Social Security 

Page 6 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
numbers through data comparisons with agencies that maintain data 

on legal aliens with Social Security numbers. 

With respect to property bought with DHS purchase cards, if FEMA 

cannot locate this property in a reasonable time period, it should work 

with DHS to reconcile its tracking system data and declare these items lost 

or stolen. 

On February 15, 2007, FEMA provided written comments on a draft of this

report in which it outlined actions it plans to take or has taken that are 

designed to address each of our six recommendations. FEMA’s comments 

are reprinted in appendix II. FEMA provided examples of several planned

actions to address identified weaknesses. For example, concerning our 

recommendation to provide clear guidance to victims receiving IHP rental

assistance on how funds should be used, FEMA stated that it is conducting

a comprehensive review of existing communications policies and is 

developing a more effective strategy to ensure that registrants understand 

IHP and its purpose. Additionally, in response to our recommendation to 

develop processes to identify and deny assistance to nonqualified aliens 

who register for IHP assistance, FEMA stated that it is reaching out to 

other federal agencies and commercial vendors in order to enhance 

FEMA’s ability to screen out applications from nonqualified aliens. 

FEMA’s response indicates that it is attempting to address problems we 

identified in IHP. As the federal government prepares for future disasters, 

it will be important for FEMA to establish effective controls to prevent 

fraudulent and improper payments before they occur. 

Agency Comments 

and Our Evaluation 

However, in its responses to our recommendations concerning actions to 

prevent duplicate housing assistance and housing damage repair 

assistance, FEMA also stated it planned to perform additional 

investigations to confirm that the conditions described in our draft report 

are in fact representative of systemic problems before initiating

appropriate corrective actions. Nonetheless, we continue to believe, as 

discussed in our testimony (see app. I), that our work amply demonstrates 

the systemic nature of the problems identified and the need for the 

recommended corrective actions. 

Specifically, with respect to our recommendation on preventing 

individuals from receiving rental assistance payments while residing in 

FEMA-provided housing (apartments and trailers), we continue to believe 

our work demonstrates a systemic problem exists. In fact the $17 million 

in potentially duplicate rental assistance paid to thousands of IHP 

Page 7 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
registrants is conservative and may even understate the extent of the 

problems. In addition, our case studies clearly showed payments that were 

at least improper and potentially fraudulent. Further, our work included 

steps to minimize the possibility that, as FEMA asserted, many of these 

cases could be explained by the fact that rental assistance payments could 

have been made retroactively to cover rental expenses prior to the date of 

payment. Specifically, in arriving at our estimate of the extent of a 

systemic problem in this area, we took the following steps to ensure that 

our reported estimate of the extent of potentially duplicate payments in 

this area did not overstate the problem. 

• We only included payments as potential duplicates when they were 

made to an IHP registrant at the same time that the registrant was 

residing in FEMA-provided housing. We did not consider payments 

made before a registrant moved in to FEMA-provided housing as 

duplicates even though FEMA often makes advance rental assistance 

payments. For example, FEMA provided more than $3 million in rental 

assistance payments to FEMA trailer registrants in the week before 

they moved into FEMA trailers. These payments averaged more than 

$1,700, which indicates they were likely for multiple months of rental 

assistance and could have been duplicate assistance payments because 

they would have covered the time the registrants were in FEMA 

trailers. 

• We conducted field investigations on case studies to ensure that 

conclusions reached were accurate. 

• We excluded from our analysis any payments made to IHP registrants 

living in FEMA-provided apartments. Those payments were excluded

from the analysis because FEMA failed to maintain detailed reliable 

data on individuals living in FEMA-provided apartments. Thus there are 

potentially millions more in duplicate rental assistance payments 

associated with IHP registrants living in FEMA-provided apartments, as 

supported by our case study investigations. 

As discussed in our testimony, our work also clearly demonstrates a 

systemic problem and our recommended corrective action with respect to

controls to prevent duplicate payments to the same individual for the same 

damage across multiple disasters. FEMA stated it was unsure whether all 

payments we identified as duplicates were in fact duplicate payments to 

the same individual for the same damage across multiple disasters. FEMA 

stated that some payments could have resulted from damage from 

Hurricane Katrina, and then future payments were made based on 

different damage caused by Hurricane Rita. 

Page 8 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
However, this assertion is contrary to representations FEMA made to us 

during the course of the audit. Specifically, FEMA told us during the audit 

that with few exceptions, registrants would only be entitled to one 

payment for each damage and/or need. We acknowledge that a registrant 

could have had a house damaged by Hurricane Katrina, and could have 

repaired the damage and moved back into the original house—only to 

have it damaged again by Hurricane Rita. However, this it is an extremely 

unlikely scenario given the severity of the damage caused by Hurricane 

Katrina and the fact that Hurricane Rita occurred shortly after, leaving

very little time for inspectors to inspect and certify housing damage 

between storms, especially given there were more than 7,000 registrants 

we identified. According to our case studies, FEMA performed the first 

inspection of the properties in question after both hurricanes affected the

area. Our case studies also showed that FEMA used two different 

inspectors to look at damaged properties, once for Hurricane Katrina and 

once for Hurricane Rita. Without having an inspection performed before 

Hurricane Rita hit, or having the same inspector review the claim to 

determine what damage was from Hurricane Rita and what damage was 

from Hurricane Katrina, FEMA is not in a position to know whether it paid

for the same damaged items twice. Therefore, we continue to believe our 

work demonstrates a systemic problem for which FEMA should institute 

our recommendation to institute controls that prevent duplicate payments 

to the same individual for the same damage registered for under different 

disasters. 

Page 9 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
We are sending copies of this report to the Secretary of Homeland 

Security, and the Director of the Federal Emergency Management Agency. 

We will also make copies available to others upon request. In addition, this 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. If 

you or your staffs have questions about this report, please contact me at 

(202) 512-7455 or kutzg@gao.gov; or contact John Kelly at (202) 512-6926

or kellyj@gao.gov. Other individuals who made major contributions to 

this report were Gary Bianchi, Jennifer Costello, Jason Kelly, Barbara 

Lewis, Jonathan Meyer, Andrew McIntosh, John Ryan, and Tuyet-Quan 

Thai. 

Gregory Kutz 

Managing Director 

Forensic Audits and Special Investigations 

Page 10 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings Appendix I: Testimony on Continued of Fraud, Waste, and Abuse 

Findings of Fraud, Waste, and Abuse 

Page 11 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights Accountability Integrity Reliability

December 6, 2006

HURRICANES KATRINA AND RITA 

DISASTER RELIEF 

Continued Findings of Fraud, Waste, and 

Abuse Highlights of GAO-07-252T, a testimony to 

the Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

Hurricanes Katrina and Rita

destroyed homes and displaced

millions of individuals. While the

Federal Emergency Management

Agency (FEMA) continues to 

respond to this disaster, GAO’s

previous work identified significant

control weaknesses—specifically

in FEMA’s Individuals and 

Households Program (IHP) and in

the Department of Homeland

Security’s (DHS) purchase card

program—resulting in significant

fraud, waste, and abuse.

Today’s testimony will address

whether FEMA provided improper

and potentially fraudulent

(1) rental assistance payments to 

registrants at the same time it was

providing free housing via trailers

and apartments; (2) duplicate

assistance payments to individuals

who claimed damages to the same

property for both hurricanes

Katrina and Rita; and (3) IHP 

payments to non-U.S. residents

who did not qualify for IHP. This

testimony will also discuss (1) the

importance of fraud identification

and prevention, and (2) the results

of our investigation into property

FEMA bought using DHS purchase

cards.

To address these objectives, GAO

data mined and analyzed FEMA

records and interviewed city

officials, university officials, and

foreign students. GAO also traveled

to Louisiana and Texas to inspect

selected property items and to

investigate improper housing

payments to individuals living in

FEMA-provided housing.

FEMA continued to lose tens of millions of dollars through potentially

improper and/or fraudulent payments from both hurricanes Katrina and Rita.

These payments include $17 million in rental assistance paid to individuals

to whom FEMA had already provided free housing through trailers or 

apartments. In one case, FEMA provided free housing to 10 individuals in

apartments in Plano, Texas, while at the same time it sent these individuals

$46,000 to cover out-of-pocket housing expenses. In addition, several of 

these individuals certified to FEMA that they needed rental assistance.

FEMA made nearly $20 million in duplicate payments to thousands of 

individuals who claimed damages to the same property from both hurricanes

Katrina and Rita. FEMA also made millions in potentially improper and/or 

fraudulent payments to nonqualified aliens who were not eligible for IHP.

For example, FEMA paid at least $3 million to more than 500 ineligible

foreign students at four universities in the affected areas. This amount likely

understates the total payments to ineligible foreign students because it does

not cover all colleges and universities in the area. FEMA also provided

potentially improper and/or fraudulent IHP assistance to other ineligible 

non-U.S. residents, despite having documentation indicating their 

ineligibility.

Finally, FEMA’s difficulties in identifying and collecting improper payments

further emphasized the importance of implementing an effective fraud,

waste, and abuse prevention system. For example, GAO previously

estimated improper and potentially fraudulent payments related to the IHP 

application process to be $1 billion through February 2006. As of November 

2006, FEMA identified about $290 million in improper payments and

collected about $7 million.

GAO Improper Payment Estimate and FEMA Reported Overpayments and Collections

GAO’s previous work on the DHS purchase cards also showed significant

problems with property accountability. Of 246 items we investigated that 

FEMA purchased for hurricane relief efforts using DHS’s purchase cards, 85

items—or 34 percent—are still missing and presumed lost or stolen.

www.gao.gov/cgi-bin/getrpt?GAO-07-252T.

To view the full product, including the scope 

and methodology, click on the link above.

For more information, contact Gregory Kutz at 

(202) 512-7455 or kutzg@gao.gov.

Page 12 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 13 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 14 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 15 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 16 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 17 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 18 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 19 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 20 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 21 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 22 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 23 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

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Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

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Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 26 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 27 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 28 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 29 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 30 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 31 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 32 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 33 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 34 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
 

Appendix I: Testimony on Continued Findings 

of Fraud, Waste, and Abuse 

Page 35 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
Appendix II: Comments from the Federal Appendix II: Comments from the Federal Emergency Management Agency 

Emergency Management Agency 

Page 36 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
Appendix II: Comments from the Federal 

Emergency Management Agency 

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Appendix II: Comments from the Federal 

Emergency Management Agency 

Page 38 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
Appendix II: Comments from the Federal 

Emergency Management Agency 

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Appendix II: Comments from the Federal 

Emergency Management Agency 

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Appendix II: Comments from the Federal 

Emergency Management Agency 

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Appendix II: Comments from the Federal 

Emergency Management Agency 

Page 42 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
Appendix II: Comments from the Federal 

Emergency Management Agency 

(192239) Page 43 GAO-07-300 Hurricanes Katrina and Rita Disaster Relief
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