United States Government Accountability Office

GAO Report to Congressional Committees

HURRICANES 

KATRINA AND RITA 

Unprecedented 

Challenges Exposed 

the Individuals and 

Households Program 

to Fraud and Abuse; 

Actions Needed to 

Reduce Such 

Problems in Future 

September 2006 

 

GAO-06-1013 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2006

HURRICANES KATRINA AND RITA

Unprecedented Challenges Exposed the 

Individuals and Households Program to 

Fraud and Abuse; Actions Needed to 

Reduce Such Problems in Future 

Highlights of GAO-06-1013, a report to 

congressional committees 

In 2005, Hurricanes Katrina and 

Rita caused unprecedented

damage. FEMA’s Individuals and 

Households Program (IHP),

provides direct assistance

(temporary housing units) and

financial assistance (grant funding

for temporary housing and other 

disaster-related needs) to eligible

individuals affected by disasters.

Our objectives were to (1) compare 

the types and amounts of IHP 

assistance provided to Hurricanes

Katrina and Rita victims to other 

recent hurricanes, (2) describe the 

challenges FEMA faced by the 

magnitude of the requests for

assistance following Hurricanes 

Katrina and Rita, and (3) determine

the vulnerability of the IHP 

program to fraud and abuse. GAO 

determined the extent to which the 

program was vulnerability to fraud 

and abuse, by conducting statistical 

sampling, data mining and 

undercover operations. 

What GAO Recommends

GAO is recommending that FEMA 

address the potential for fraud and 

abuse in the IHP by ensuring that 

payments go to recipients at valid

addresses; establishing procedures 

to avoid duplicate lodging 

payments; increasing

accountability over debit cards; 

and identifying and recouping 

payments based on improper and 

potentially fraudulent applications. 

FEMA substantially agreed with

our recommendations; however 

DHS disagreed with our estimate of

the extent of improper and 

potentially fraudulent payments. 

For Hurricanes Katrina and Rita, FEMA received more than 2.4 million 

applications for IHP assistance and distributed $7.0 billion as compared to 

the six hurricanes that hit the United States in the prior two years and 

totaled about 1.5 million applications and about $1.5 billion in assistance, 

respectively. Temporary housing assistance and expedited assistance 

accounted for much of the increase in IHP expenditures as compared to 

prior years. Overall, however, although the number of applications was 

much higher, the percentage approved for non-housing assistance was 

notably lower for Hurricanes Katrina and Rita than in 2003 and 2004. 

The magnitude of Hurricanes Katrina and Rita posed challenges in providing 

assistance to an unprecedented number of victims many of whom were 

widely dispersed across the country. To address these challenges, FEMA 

developed new approaches and adapted existing approaches to quickly 

provide assistance and improve communication with victims. Despite these 

efforts, management challenges in staffing and training and program 

restrictions limited the effectiveness and efficiency of the disaster assistance

process. FEMA has proposed a number of initiatives to address these 

problems, but it is too early to determine whether these efforts will 

effectively address the problems identified. 

GAO identified the potential for significant fraud and abuse as a result of 

FEMA’s management of the IHP in response to Hurricanes Katrina and Rita. 

Flaws in the registration process resulted in what GAO estimated to be 

between $600 million and $1.4 billion in improper and potentially fraudulent 

payments due to invalid registration data. In addition, duplicate payments 

were made and FEMA lacked accountability over $2,000 debit cards that 

were given to disaster victims. 

Disaster Recovery Center where disaster victims applied for Individual and Households 

Program benefits after Hurricane Katrina in St. Bernard Parish, Louisiana. 

Source: GAO.

www.gao.gov/cgi-bin/getrpt?GAO-06-1013.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William Jenkins

(202) 512-5555 jenkinswo@gao.gov and 

Greg Kutz, (202)512-7455 kuntzg@gao.gov.. 
Contents 

Letter 1

Results in Brief 3

Background 6

IHP Assistance to Victims of Hurricanes Katrina and Rita Far

Surpassed Assistance to Victims of 2003 and 2004 Hurricane 

Seasons 12

FEMA Responded to the Challenges of Hurricanes Katrina and Rita 

with New Approaches, yet Reported Ongoing Management 

Challenges Hindered Implementing IHP 23 

GAO Audit and Investigative Work Reveals Potential for Fraud and 

Abuse Related to IHP Applications and Debit Card Use 33 

Conclusions 37

Recommendations for Executive Action 38 

Agency Comments and Our Evaluation 41 

Appendix I Scope and Methodology 47 

Appendix II Comments from the Department of Homeland 

Security 50 

Appendix III Federal Disaster Assistance and Individuals and 

Households Program Benefits, Structure and 

Processes 54 

Appendix IV Issues Reported Related to FEMA’s IHP Disaster 

Assistance Provided for Katrina 67 

Appendix V GAO’s June 14, 2006 Testimony on Fraud and Abuse 

of FEMA’s Individual Assistance program 69 

Appendix VI GAO Contact and Staff Acknowledgments 99 

Page i GAO-06-1013 Federal Emergency Management Agency
Glossary 100 

Related GAO Products 103 

Tables 

Table 1: IHP Disaster Assistance Benefits 9 

Table 2: Comparison of Applications (as of September 2006), 

Approvals and Grant Awards for Hurricanes Katrina and 

Rita and Named Hurricanes That Came Ashore in the 

United States in 2004 (as of August 2006) and 2003 (as of 

April 2006) 13 

Table 3: Total Number of IHP Applicants Approved, Ineligible, 

Pending and Applicant Filing Appeals for Named 

Hurricanes That Came Ashore in 2003 (as of April 2006), 

2004, and Hurricanes Katrina,and Rita in 2005 (as of 

August 2006) 18 

Table 4: IHP Challenges and New Approaches 24 

Table 5: IHP Challenges and Adaptations of Traditional 

Approaches 25

Table 6: Recent Assessments of FEMA’s Performance in Response 

to Hurricanes Katrina and Rita 26 

Figures 

Figure 1: Disaster Recovery Center Where Disaster Victims Apply 

for Individual and Households Program Benefits, St. 

Bernard Parish, Louisiana 10 

Figure 2: FEMA Individuals and Households Program Inspection 

Notice on a Home in St. Bernard Parish Damaged by 

Hurricane Katrina 11 

Figure 3: FEMA’s Expenditures for IHP Housing Assistance Grant 

Awards for Named Hurricanes That Came Ashore in 2003 

(as of April 2006), 2004, and Hurricanes Katrina and Rita 

in 2005 (as of August 2006) 15 

Figure 4: FEMA’s Expenditures for IHP Other Needs Assistance 

Grant Awards for Named Hurricanes That Came Ashore in 

2003 (as of April 2006), 2004, and Hurricanes Katrina and 

Rita in 2005 (as of August 2006) 16 

Page ii GAO-06-1013 Federal Emergency Management Agency
Figure 5: Total Number of Inspections Completed and the Total 

Cost of the Inspections for Named Hurricanes That Came 

Ashore in 2003 (as of April 2006), 2004, and Hurricanes 

Katrina and Rita in 2005 (as of August 2006) 20 

Figure 6: Number and Percentage of FEMA Referrals to SBA for 

Disaster Loans and the Number of SBA Disaster Loan 

Applicants Sent Back to FEMA for ONA for the Named 

Hurricanes That Came Ashore in 2003 (as of April 2006), 

2004, and Hurricanes Katrina and Rita in 2005 (as of 

August 2006) 22 

Figure 7: Conceptual Framework for FEMA’s Individuals and 

Households Program as Part of Federal Disaster 

Assistance 54

Figure 8: Disaster Declaration Process 62 

Figure 9: Cover of FEMA’s Applicant’s Guide to the Individuals and 

Households Program 64 

Abbreviations 

DHS Department of Homeland Security 

EP&R Emergency, Preparedness and Response 

FEMA Federal Emergency Management Agency 

HUD Department of Housing and Urban Development 

IHP Individuals and Households Program 

NPSC National Processing Service Center 

ONA Other Needs Assistance 

SBA Small Business Administration 

SSN Social Security Number 

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Page iii GAO-06-1013 Federal Emergency Management Agency
United States Government Accountability Office

Washington, DC 20548 

September 27, 2006 

Congressional Committees 

Making landfall in late August 2005, Hurricane Katrina was the costliest 

hurricane, and one of the deadliest, in U. S. history. In its May 2006 Report, 

the Senate Committee on Homeland Security and Governmental Affairs 

estimated Hurricane Katrina was responsible for over $150 billion in 

damages and over 1,500 deaths, with thousands more reported missing. 

Hurricane Katrina devastated much of the Gulf Coast; the storm surge 

caused major or catastrophic damage along the coastlines of Alabama, 

Mississippi, and Louisiana. About 80 percent of New Orleans, the largest

city affected, was flooded when levees protecting the city broke. 

Hurricane Katrina ultimately affected 90,000 square miles, an area almost 

as large as the United Kingdom. 

Hurricane Rita caused further devastation, making landfall on the Gulf 

Coast in September 2005. The most intense Gulf of Mexico hurricane ever

recorded, Rita caused an estimated $9.4 billion in damages—making it the 

ninth costliest storm in the U.S. history. The storm killed 7 people directly, 

and at least another 55 during evacuations and from indirect effects, such

as carbon monoxide poisoning. 

The Robert T. Stafford Disaster Relief and Emergency Assistance Act1

(“the Stafford Act”) grants the principal authority for the President to 

provide assistance in mitigating, responding to, and preparing for disasters 

and emergencies such as earthquakes, hurricanes, floods, tornadoes, and 

terrorist acts. The mission of the Federal Emergency Management Agency 

(FEMA), within the Department of Homeland Security (DHS), which 

administers the Stafford Act, is to reduce loss of life and property and 

protect the nation from all types of hazards, through a comprehensive, 

risk-based emergency management program. Section 408 of the Stafford 

Act, 42 U.S.C. § 5174, is the general authority for the President to provide 

assistance to individuals and households. This section encompasses 

housing assistance as well as “other needs” assistance, which includes 

medical, dental, funeral, personal property, transportation, and other 

financial assistance for certain needs arising from a major disaster. These 

 1

 42 U.S.C. §§ 5121-5206. 

Page 1 GAO-06-1013 Federal Emergency Management Agency
two types of assistance are administered by FEMA under the Individuals 

and Households Program (IHP). The IHP provides housing and “other 

needs” assistance (ONA) in the forms of direct assistance (the provision of 

temporary housing units) and financial assistance (grant funding for 

temporary housing and other disaster-related needs) to eligible disaster 

victims. Before providing assistance, FEMA is to conduct inspections of 

disaster victims’ homes to verify damage, ownership, and occupancy. As 

part of the application process, FEMA refers disaster victims who apply 

for assistance and meet established income levels to the Small Business 

Administration (SBA). SBA’s Disaster Loan Program is intended to be a 

primary resource available to aid in disaster victims’ recovery. Applicants 

who are denied loan assistance by SBA or have remaining unmet needs are 

sent back to FEMA for an assistance determination of their eligibility for 

certain types of other needs assistance. 

In light of widespread congressional and public interest in U.S. agencies’ 

performance in providing assistance to hurricane victims, we prepared 

this report under the Comptroller General’s authority to conduct 

evaluations on his own initiative to review the events and aftermath 

surrounding Hurricanes Katrina and Rita. This report discusses (1) how 

the types and amounts of assistance provided to victims of Hurricanes 

Katrina and Rita through the IHP compare to other recent hurricanes, (2) 

the challenges posed by the magnitude of the requests for assistance 

following Hurricanes Katrina and Rita and FEMA’s response to these 

challenges, and (3) the vulnerability of the IHP to fraud, and abuse, in the 

wake of Hurricanes Katrina and Rita.

To describe the types and amounts of benefits FEMA provided to victims 

of Hurricanes Katrina and Rita through IHP in comparison to assistance 

provided in other hurricane disasters, we interviewed agency officials and 

obtained and analyzed data provided by FEMA’s National Processing 

Service Center in Winchester, Virginia. We compared IHP disaster 

assistance provided under Hurricanes Katrina and Rita to assistance 

provided after other hurricane-related disaster declarations occurring in 

calendar years 2003 through 2005, to the extent data were available. We

selected hurricane disaster declarations that occurred either in a single 

state or in multiple-states simultaneously since IHP was implemented in 

fiscal year 2003 and determined that the data were sufficiently reliable for 

the purposes of our review. 

To determine the challenges FEMA faced and the actions FEMA took to 

respond to these challenges, we interviewed FEMA officials and reviewed

and analyzed federal legislation and regulations applicable to FEMA 

Page 2 GAO-06-1013 Federal Emergency Management Agency
disaster assistance programs and relevant FEMA policies, guidance, and 

processes including changes to existing IHP processes, procedures, and 

assistance during and after the hurricanes. We also analyzed IHP budgets, 

staffing, and performance measures, and prior audit reports and 

assessments.

To determine the vulnerability of the program to problems of fraud and 

abuse, our investigators conducted statistical sampling, data mining2

 and 

undercover operations. We interviewed FEMA officials and observed 

contract inspectors assessing damaged residential properties in New 

Orleans. We reviewed IHP processes and procedures for determining 

applicant eligibility for specific types of IHP assistance. Although we did 

identify potentially fraudulent, improper, and abusive IHP applications, 

our work was not designed to identify, and we cannot determine, the full

extent of fraudulent, improper, and abusive IHP registrations. We 

conducted our audit work between January 2006 and September 2006 in 

accordance with generally accepted government auditing standards. We 

conducted our investigative work between October 2005 and September 

2006 in accordance with the standards prescribed by the President’s 

Council on Integrity and Efficiency. Our scope and methodology are 

discussed in greater detail in appendix I. 

For Hurricanes Katrina and Rita, FEMA received more than 2.4 million 

applications for housing and other needs assistance and awarded 

$7.0 billion in financial assistance to applicants, as compared to the 2004 

hurricane season when FEMA received 1.4 million applications and 

awarded $1.4 billion in total grants. Two categories of assistance—

temporary housing assistance and expedited assistance accounted for 

much of the significant increase in IHP expenditures for Hurricanes 

Katrina and Rita as compared to prior years. FEMA also provided a much 

greater amount of assistance for Hurricanes Katrina and Rita than in prior 

years for specific types of ONA benefits that are primarily provided only 

after applicants apply for and are denied an SBA disaster loan, indicating

that the percentage of lower income applicants may have been a 

significant portion of total applicants. While the approval rate for housing 

assistance was greater than in previous years, the approval rate for ONA 

Results in Brief 

 2

 Data mining involves obtaining large databases of transactions and related activity and 

using software to search or “mine” data looking for suspicious transactions or patterns of

activity. 

Page 3 GAO-06-1013 Federal Emergency Management Agency
was notably lower for Hurricanes Katrina and Rita than the two previous 

hurricane seasons; 41 percent as compared to 65 percent in 2003 and 50 

percent in 2004. 

Hurricanes Katrina and Rita posed numerous, unprecedented challenges 

to IHP implementation. These challenges related to the sheer volume of 

applications combined with the temporary relocation of hurricane victims. 

FEMA responded to the challenges of Hurricanes Katrina and Rita by 

developing new approaches and adapting existing approaches to 

implement IHP. For example, FEMA used a new approach to provide 

Public Assistance funding to transition victims from short-term lodging, 

including shelters, hotels and motels to travel trailers and mobile homes, 

and finally to apartments to address longer-term housing needs until it 

could develop a strategy for implementing its Individual Assistance 

program. FEMA also provided transitional housing (financial) assistance 

for the first time that was intended to advance an amount equal to 3 

months of housing costs calculated using the national average fair market 

rent for a two-bedroom apartment. To provide more access to disaster 

victims dispersed across the United States, FEMA enhanced its existing 

Internet systems capacity, doubling the number of applicants who could 

be on line simultaneously and opened additional call centers by working 

with the Internal Revenue Service and the private sector, among others. 

Despite these and other initiatives to address challenges in the aftermath 

of the hurricanes, reported ongoing management challenges and 

limitations hindered FEMA’s implementation of the IHP. We, as well as six 

federal reports we reviewed, identified a lack of planning and trained staff 

to process initial applications, respond to applicant questions, and conduct 

inspections, as well as programmatic restrictions on the uses of funds that 

limited FEMA’s flexibility in using IHP assistance in the most efficient and 

effective manner. In May 2006, FEMA announced a number of initiatives to

address some of its ongoing management challenges, but it is too early to

determine whether these efforts will effectively address these concerns. 

The unprecedented challenges posed by Hurricanes Katrina and Rita 

exposed the IHP to fraud and abuse. The results of our investigative work, 

conducted between October 2005 and September 2006, found that flaws 

existed in the applications process for disaster victims, which left the 

federal government vulnerable to potentially significant fraud and abuse of

IHP expedited assistance payments. We estimated that, as of February 

2006, 16 percent, or approximately $1 billion, in FEMA IHP payments were 

improper and potentially fraudulent due to invalid application data such as 

Social Security Numbers and addresses. The 95 percent confidence 

interval associated with our estimate of improper and potentially 

Page 4 GAO-06-1013 Federal Emergency Management Agency
fraudulent registrations ranges from a low of $600 million to a high of 

$1.4 billion in improper and potentially fraudulent payments. In addition, 

duplicate payments were made to individuals in the same household and 

concurrent payments were made for lodging (i.e., FEMA IHP paid both for 

rental and hotel lodging for the same household). Furthermore, FEMA 

lacked accountability over $2,000 debit cards that were given to disaster 

victims to provide immediate disaster assistance. FEMA also lacked 

controls over proper debit card usage. For example, we found that debit 

cards were used for items or services such as a Caribbean vacation, 

professional football tickets, and adult entertainment. Finally, FEMA had 

not developed a comprehensive strategy for identifying and recouping 

improper payments. 

Based on the findings in our testimony of June 14, 2006,3

 we are 

recommending that the Secretary of DHS direct the Director of FEMA to 

take a number of actions to address the potential for fraud and abuse in 

the IHP, including implementing changes to its systems and processes to 

reject, and immediately inform applicants of, damaged addresses that are 

PO boxes and to identify damaged addresses that are not primary 

residences; establishing address verification procedures to validate that 

the address an applicant claimed as damaged was the applicant’s primary 

residence at the time of the disaster and deal with applications where 

FEMA or other inspectors have concluded that the damaged address was 

bogus; establishing procedures to provide reasonable assurance that 

individuals staying in FEMA or other paid for hotel rooms are not also 

provided IHP rental assistance payments for the time they are in the paid

for hotel rooms; and augmenting procedures for future disasters to 

provide reasonable assurance of accountability over debit card 

distribution. FEMA fully concurred with 9 of our 13 recommendations, 

and responded that it had taken, or is in the process of taking, actions to 

implement these recommendations. Although FEMA stated that it only 

partially concurred with the remaining 4 recommendations related to hotel 

reimbursements to the Red Cross and debit card accountability, FEMA’s 

responses indicate that it substantially agreed with the key objectives of 

the 4 recommendations. 

 3

 GAO, 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). 

Page 5 GAO-06-1013 Federal Emergency Management Agency
While FEMA substantially agreed with our recommendations, FEMA 

questioned the validity of our statistical sampling and resulting projection 

of fraudulent and improper payments. Specifically, FEMA disagreed with 

our estimate that $600 million to $1.4 billion—or 10 to 22 percent—of 

individual assistance payments through February of 2006 were associated 

with potentially fraudulent and improper registrations. FEMA responded 

that it disagreed with our estimate because it was substantially larger than 

FEMA’s historical average of 1 to 3 percent of program fraud. However,

FEMA’s reported fraud rate of 1 to 3 percent is not based on an 

independent, comprehensive statistical sample of the entire population of 

individual assistance payments; instead, the 1 to 3 percent FEMA estimate 

is simply the amount of overpayments that it identifies based on its own 

internal processes and procedures. GAO’s estimate of 16 percent—or 

$1 billion—was based on an independent, random statistical sample of all 

2.6 million claims, totaling $6.3 billion, through February of 2006. 

FEMA’s written comments are presented in appendix II. 

The purpose of the Stafford Act is to provide an orderly and continuing 

means of assistance by the federal government to state and local 

governments in carrying out their responsibilities to alleviate the suffering 

and damage which results from disasters. The Stafford Act originally was 

enacted in 1974 and amended in 1988, 1993, and 2000. The Disaster 

Mitigation Act of 20004

 established the IHP by combining two previous 

disaster grant programs - - the Temporary Housing Assistance and 

Individual Family Grant programs. Under the IHP, these programs were 

replaced by Housing Assistance and Other Needs Assistance. Looking 

specifically at the Housing Assistance component of the IHP, section 408 

of the Stafford Act authorizes five types of assistance, of which four are 

relevant to disaster victims of Hurricanes Katrina and Rita: 5

Background 

 4

 Pub. L. No. 106-390. 

5

 The fifth form of assistance is permanent housing construction in insular and other

remote areas. Section 408 of the Stafford Act authorizes direct assistance to disaster 

victims to construct permanent housing in insular areas and other remote locations, i.e.,

the Virgin Islands, American Samoa, Guam, the Commonwealth of the Northern Mariana

Islands, and in Puerto Rico and other remote locations. This form of housing assistance is

explicitly limited to insular and other remote areas where no alternative housing resources

are available and the other forms of authorized temporary housing assistance are 

“unavailable, infeasible, or not cost effective.” 

Page 6 GAO-06-1013 Federal Emergency Management Agency
(1) Financial assistance to rent temporary housing. FEMA 

may provide financial assistance to individuals or households to 

rent alternative housing accommodations, existing rental units, 

manufactured housing, recreational vehicles, or other readily 

fabricated dwellings.6

(2) “Direct” temporary housing assistance. FEMA may 

provide temporary housing units (e.g., mobile homes and travel 

trailers), acquired by purchase or lease, directly to disaster victims, 

who, because of a lack of available housing resources, would be 

unable to make use of financial assistance to rent alternate housing 

accommodations. In other words, direct assistance would be 

available in situations where rental accommodations are not 

available. By statute, direct assistance is limited to an 18-month 

period, after which FEMA may charge fair market rent for the

housing unless it extends the 18-month free-of-charge period due 

to extraordinary circumstances.7

(3) Repair assistance. Under this authority, FEMA may provide 

financial assistance for the repair of owner-occupied private 

residences, utilities, and residential infrastructure damaged by a 

major disaster. However, the maximum amount of repair 

assistance provided to a household is limited to $5,000, adjusted 

annually to reflect changes in the CPI.

8

(4) Replacement assistance. This form of housing assistance 

authorizes funding to replace owner-occupied private residences. 

The amount of replacement assistance FEMA may provide to a 

household is limited to $10,000, adjusted annually to reflect

changes in the CPI.9

 For a victim to receive this assistance, there 

 6

 42 U.S.C. § 5174(c)(1)(A). 

7

 42 U.S.C. § 5174(c)(1)(B). 

8

 42 U.S.C. § 5174(c)(2)(C). In 2005, the maximum was $5,200. For 2006, the maximum is 

$5,400. 

9

 42 U.S.C. § 5174(c)(3)(B). In 2005, the maximum was $10,500. For 2006, the maximum is 

$10,900. 

Page 7 GAO-06-1013 Federal Emergency Management Agency
must have been at least $10,000 of damage to the dwelling. The 

victim may use the assistance toward replacement housing costs.10

As of September 25, 2006, proposed legislation was pending before 

Congress that would, among other things, eliminate the cap on home 

repair and replacement assistance. 11 

FEMA may provide ONA grant funding for public transportation expenses, 

medical and dental expenses, and funeral and burial expenses. ONA grant 

funding may also be available to replace personal property, repair and 

replace vehicles, and reimburse moving and storage expenses under 

certain circumstances. The maximum financial amount of housing and 

other needs assistance that an individual or household may receive is 

capped at $25,000, adjusted annually to reflect changes in the Consumer 

Price Index.12 Eligibility for IHP assistance is determined when an 

individual or household applies with FEMA and is based on the amount of

property damage resulting from the disaster. 

For disaster victims with financial resources, SBA’s Disaster Loan 

Program is intended to be a primary resource available to aid in their 

recovery. FEMA refers disaster victims who apply for assistance and meet

established income levels to SBA. Applicants who are denied loan 

assistance by SBA or have remaining unmet needs are sent back to FEMA 

for an assistance determination of their eligibility for certain types of ONA 

grant funding. (We reported on SBA’s efforts to provide disaster loans in 

response to the 2005 hurricanes in July 200613 and expect to issue another 

report on SBA’s response later this year.) Table 1 provides an overview of 

IHP benefits and identifies the ONA benefits that are subject to SBA 

disaster loan eligibility. 

 10 44 C.F.R. § 206.117(b)(3). 

11 On July 27, 2006, the Senate Homeland Security and Governmental Affairs Committee 

approved and reported a bill (S. 3721) that, among other things, would make amendments

to Section 408(c) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act 

(42 U.S.C. 5174(c)) to eliminate the maximum amounts of assistance available under the 

IHP for home repair or replacement. This legislation has not yet been approved by the full 

Congress.

12 In 2005, the maximum was $26,200. For 2006, the maximum is $27,200. 

13 GAO, Small Business Administration: Actions Needed to Provide More Timely Disaster

Assistance, GAO-06-860 (Washington, D.C.: July 28, 2006). 

Page 8 GAO-06-1013 Federal Emergency Management Agency
Table 1: IHP Disaster Assistance Benefits

Individuals & 

Households Program

components Types of benefits available

Amount (maximum amount of IHP financial 

assistance is $27,200, adjusted to reflect 

changes in the CPI for 2006) 

Housing Assistance Rental Assistance funds 

Repair Assistance funds 

Replacement Assistance funds 

Direct assistance (manufactured housing, mobile 

homes, or travel trailers provided directly to disaster 

victims) 

Based on area fair market rent

Maximum: $5,400 

Maximum: $10,900 

Does not apply toward financial assistance limit. 

Other Needs Assistance Moving and Storagea 

Personal Property Repair or Replacement (furniture, 

clothing, appliances and essential tools)a

Transportation

• Repairing or replacing vehicles

a

• Financial assistance for public transportation

and any other transportation related costs or 

services 

Expedited Assistance fundsb

Maximums subject to total IHP benefit limit of 

$27,200 

The state establishes ONA award levels related 

to vehicle repairs, vehicle replacement, and 

funeral grants

Maximum $500c

Source: GAO generated based on FEMA data. 

a

FEMA may provide ONA grant funding for these expenses if an applicant is ineligible for a Small 

Business Administration (SBA) disaster loan. 

b

The expedited assistance process is not specifically authorized in the Stafford Act. However, FEMA 

previously has asserted, and we have agreed, that it has legal authority under the Act to implement 

expedited, or fast track, procedures. On July 24, 2006, FEMA changed the administration of 

expedited assistance to under the provisions of the ONA component. Prior to the change, expedited 

assistance was under the provisions of the housing assistance component. 

c

FEMA changed the maximum from $2,000 to $500 on July 24, 2006. 

FEMA manages the IHP primarily through a decentralized structure of 

permanent and temporary field offices staffed mostly by contract and 

temporary employees. The offices include permanent locations at the 

FEMA Recovery Division in FEMA Headquarters, regional offices, National 

Processing Service Centers, and temporary locations at Joint Field Offices, 

Area Field Offices, and Disaster Recovery Centers. Once the President 

declares a major disaster that is eligible for federal assistance, victims in 

declared counties must first apply for it with FEMA, by phone, over the 

Internet, or in person at a disaster recovery center. Figure 1 shows disaster 

victims waiting to speak with temporary disaster staff in October 2005 at a

Disaster Recovery Center in St. Bernard Parish, Louisiana. 

Page 9 GAO-06-1013 Federal Emergency Management Agency
Figure 1: Disaster Recovery Center Where Disaster Victims Apply for Individual and

Households Program Benefits, St. Bernard Parish, Louisiana 

Source: GAO.

Once a FEMA representative records personal information from a disaster 

application and provides the applicant with a FEMA application number, 

FEMA’s National Emergency Management Information System

automatically determines potential eligibility for designated categories of 

assistance.14 FEMA refers disaster victims who apply for moving and 

storage, personal property repair or replacement, and/or vehicle repair or 

replacement related grant funding assistance and meet established income 

levels to SBA. Applicants who are denied loan assistance by SBA or have

remaining unmet needs are sent back to FEMA for an assistance 

determination of their eligibility for certain types of ONA grant funding. To 

confirm that the home and personal property sustained damages as 

reported in a disaster assistance application, FEMA is to meet with 

disaster victims at their homes to conduct individual inspections to verify, 

 14 The National Emergency Management Information System also interfaces with SBA’s 

information systems to refer applicants (based on self-declared income and number of

individuals in household) to SBA for loans. 

Page 10 GAO-06-1013 Federal Emergency Management Agency
ownership, occupancy, and damage. Figure 2 shows a FEMA inspection 

notice on a home in St. Bernard Parish damaged by Hurricane Katrina. 

Figure 2: FEMA Individuals and Households Program Inspection Notice on a Home in St. Bernard Parish Damaged by

Hurricane Katrina 

Source: GAO.

Based on the results of the inspection and determinations made by staff at 

the National Processing Service Centers, FEMA approves or denies 

housing and/or other needs assistance. (Applicants may be eligible for 

either or both types of assistance.) If the applicant qualifies for a grant, 

FEMA sends the applicant a check by mail or deposits the grant funds in 

the applicant’s bank account. If an applicant is denied, he or she may 

appeal the decision by contacting a service center and providing additional 

information or clarification. Recipients of IHP assistance must recertify 

their continuing need for assistance every 30 to 90 days, depending on the

Page 11 GAO-06-1013 Federal Emergency Management Agency
type of assistance. Additional details about federal disaster assistance and

IHP including the types of and eligibility for benefits, how the program is 

structured and implemented and the process for applying for and receiving

program assistance are provided in appendix III. 

Because of the magnitude of the hurricanes and the extent of the resulting

damage, the total number of applications for, and benefits provided 

through IHP in 2005 for Hurricanes Katrina and Rita far exceeded the

combined total of the 2 years since the program was established in 2003.15

Two categories of assistance—temporary housing assistance and 

expedited assistance---- accounted for much of the significant increase in 

IHP expenditures for Hurricanes Katrina and Rita as compared to prior 

years. FEMA also provided a much greater amount of assistance for 

Hurricanes Katrina and Rita, than in prior years, for specific types of ONA 

benefits that are primarily provided only after applicants apply for and are 

denied an SBA disaster loan, indicating that the percentage of lower 

income applicants may have been a significant portion of total applicants. 

While the approval rate for housing assistance was greater than in 

previous years, the approval rate for ONA was notably lower for 

Hurricanes Katrina and Rita than the 2 previous hurricane seasons; 

41 percent as compared to 65 percent in 2003 and 50 percent in 2004. 

Accordingly, the percentage of applicants FEMA identified as ineligible for 

housing assistance was lower while the percentage of ineligible applicants 

for ONA was higher for Hurricanes Katrina and Rita (44 percent) than for 

named hurricanes that came ashore in 2004 (31 percent). To establish a 

basis for eligibility, FEMA had to conduct a much greater number of 

inspections and accordingly, the related cost of those inspections were 

greater with Hurricanes Katrina and Rita than in 2003 and 2004 combined. 

Although FEMA referred more applicants to SBA for disaster loans for 

Hurricanes Katrina and Rita than in the prior 2 years, SBA returned about 

the same percentage of disaster loan applicants to FEMA for ONA 

consideration. 

IHP Assistance to 

Victims of Hurricanes 

Katrina and Rita Far 

Surpassed Assistance 

to Victims of 2003 and 

2004 Hurricane 

Seasons 

 15 GAO selected hurricane disaster declarations based on the criteria of (1) the disaster 

occurring since IHP was implemented in fiscal year 2003 and (2) the disaster declaration

occurred either in a single state or in multiple-states simultaneously. 

Page 12 GAO-06-1013 Federal Emergency Management Agency
FEMA received far more IHP applications, approved more requests for 

Housing and Other Needs Assistance, and awarded more grant money in 

2005-2006 for Hurricanes Katrina and Rita than for all the hurricanes that 

resulted in a disaster declaration in 2004 (Ivan, Charley, Frances, and 

Jeanne) and 2003 (Isabel and Claudette) combined. Table 2 shows the 

number of applicants approved for both categories of IHP assistance and

the grant award totals—as of August 2006, for Hurricanes Katrina and Rita

and named hurricanes that came ashore in the United States in 2004.

16 The 

table also shows the number of applications received by FEMA—as of 

September 2006. The number of applicants and both categories of IHP 

assistance for the 2003 named hurricanes were provided by FEMA as of 

April 2006.17

IHP Applications, Benefits 

and Related Inspection 

Workload Were Greater for 

Hurricanes Katrina and 

Rita than in 2 Preceding 

Years 

Table 2: Comparison of Applications (as of September 2006), Approvals and Grant Awards for Hurricanes Katrina and Rita 

and Named Hurricanes That Came Ashore in the United States in 2004 (as of August 2006) and 2003 (as of April 2006) 

Total applications

 for FEMA assistance

Housing assistance 

approvalsb

ONA 

 approvalsb

Total

 grant awards

Hurricanes Katrina and Ritaa2.4 million 1.3 million 556,000 $7.0 billion

2004 1.4 million 382,000 495,000 1.4 billion

2003 179,000 45,000 45,000 158 million

Source: GAO analysis based on FEMA data. 

a

In 2005, FEMA authorized Individual Assistance for disaster declarations in Alabama and Florida for 

Hurricane Dennis; Alabama, Mississippi and Louisiana for Hurricane Katrina; Louisiana and Texas for 

Hurricane Rita; and Florida for Hurricane Wilma. 

b

Individual IHP applicants can be eligible for more than one type of Housing Assistance or ONA 

category; therefore, some individuals may be counted under both assistance categories. 

 16 Hurricanes Katrina and Rita accounted for about 80 percent of the over 3 million 

applications received and about 95 percent of the total IHP assistance distributed for all 

named hurricanes that came ashore in 2005.

17 FEMA data from its National Emergency Management Information System was provided

for the 2003 named hurricanes through April 24, 2006. FEMA data was provided for the 

2004 and 2005 named hurricanes through September 6, 2006. According to a FEMA official, 

changes, if any, to the data for the named hurricanes in 2003 from April to August 2006 

would be minor enough to prove statistically insignificant. 

Page 13 GAO-06-1013 Federal Emergency Management Agency
FEMA data as of August 2006, shows that two categories of assistance—

temporary housing assistance and expedited assistance18 accounted for 

much of the significant increase in IHP expenditures for Hurricanes 

Katrina and Rita as compared to prior years, as shown in figure 3. FEMA 

specifically established a new transitional housing assistance allowance,

as part of temporary housing assistance, to advance to Katrina disaster 

victims an amount equal to the initial 3 months of rental payments based 

on the national average rent for a 2-bedroom apartment. Expedited 

assistance is a pre-inspection disbursement of funds to disaster victims 

based on specific criteria such as the severity of the damage. (See glossary 

for definitions of all housing and other needs assistance categories.) 

Transitional housing assistance that was authorized exclusively for 

Hurricane Katrina, was estimated at about $1.3 billion while expedited 

assistance for both Hurricanes Katrina and Rita totaled an about 

$2.3 billion. By comparison, about $59 million was approved for hurricanes 

in 2004, while no expedited assistance was approved for hurricanes in 

2003. 

 18 On July 24, 2006, FEMA changed the administration of expedited assistance to be under

the provisions of the ONA component. Prior to the change, expedited assistance was under 

the provisions of the housing assistance component. 

Page 14 GAO-06-1013 Federal Emergency Management Agency
Figure 3: FEMA’s Expenditures for IHP Housing Assistance Grant Awards for 

Named Hurricanes That Came Ashore in 2003 (as of April 2006), 2004, and

Hurricanes Katrina and Rita in 2005 (as of August 2006)

0

250,000,000

500,000,000

750,000,000

1,000,000,000

1,250,000,000

1,500,000,000

1,750,000,000

2,000,000,000

2,250,000,000

2,500,000,000

Houses

replaced

Houses

repaired

Expedited

assistanceb Temporary

housinga

Dollars (in millions)

Source: GAO analysis of NEMIS data.

Hurricanes in 2003

Hurricanes in 2004

Hurricanes Katrina and Rita in 2005

a

Temporary housing assistance includes lodging expenses reimbursement and rental assistance. 

Transitional housing assistance is a component of rental assistance.

b

Expedited assistance was not authorized for hurricanes in 2003. On July 24, 2006, FEMA changed 

the administration of expedited assistance to under the provisions of the ONA component. Prior to the 

change, expedited assistance was under the provisions of the housing assistance component. 

In terms of ONA, figure 4 shows that FEMA provided a much greater 

amount of income dependent assistance for Hurricanes Katrina and Rita in

2005 than in prior years. Income dependent assistance requires that 

eligible applicants initially apply for and be denied assistance from the 

SBA Disaster Loan Program19 and includes expenses for personal property, 

moving and storage, and vehicle repair and replacement expenses. For 

Hurricanes Katrina and Rita, personal property assistance accounted for 

 19 SBA applicants may also be referred for ONA if they demonstrate that the SBA assistance 

provided is insufficient to meet all essential disaster related expenses and needs. 

Page 15 GAO-06-1013 Federal Emergency Management Agency
the majority of the income dependent assistance, about $1.8 billion. In 

comparison, for the hurricanes in 2003 and 2004, the combined total 

income-dependent assistance approved was less than $495 million. Lower 

income applicants may have made up a significant portion of those 

receiving ONA benefits because income dependent assistance in the form 

of personal property assistance was nearly 87 percent of the ONA 

approved for victims of hurricanes Katrina and Rita. 

Figure 4: FEMA’s Expenditures for IHP Other Needs Assistance Grant Awards for 

Named Hurricanes That Came Ashore in 2003 (as of April 2006), 2004, and

Hurricanes Katrina and Rita in 2005 (as of August 2006) 

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1,800,000,000

2,000,000,000

Income

dependent

assistanceb

Non-income

dependent

assistancea

Dollars

Source: GAO analysis of NEMIS data.

Hurricanes in 2003

Hurricanes in 2004

Hurricanes Katrina and Rita in 2005

a

Non-Income dependent assistance categories include medical, dental, funeral and other expenses. 

b

Income dependent assistance categories include personal property, moving and storage, and vehicle 

repair and replacement expenses.

Page 16 GAO-06-1013 Federal Emergency Management Agency
As of August 2006, FEMA data shows that for Hurricanes Katrina and Rita 

nearly 2 million applicants applied for Housing Assistance while 

1.3 million applicants requested ONA. About 67 percent of applicants for 

Housing Assistance were approved versus an estimated 41 percent of 

applicants approved for ONA. Although during Hurricanes Katrina and 

Rita more applicants were approved for ONA, the percentage of approved 

applicants was less than for hurricanes in the prior 2 years, whose 

approval rates were higher than 50 percent in each year. Accordingly, the

percentage of applicants FEMA identified as ineligible for housing 

assistance was lower while the percentage of ineligible applicants for ONA 

was higher for Hurricanes Katrina and Rita (44 percent) than for named 

hurricanes that came ashore in 2004 (31 percent). 

Victims of Hurricanes 

Katrina and Rita Seek 

Housing Assistance in 

Numbers Greater than 

Those for Other Needs 

Assistance 

Table 3 shows, by IHP assistance category, the number and percentage of

applicants FEMA considered for IHP assistance as of August 2006 for 

hurricanes in 2004 and Hurricanes Katrina and Rita, and for hurricanes in

2003 as of April 2006. In addition, the table shows the number and percent

of approved, ineligible, and pending IHP applicants. It also shows the 

number and percent of applicants that appealed FEMA decisions regarding 

their IHP assistance, for Hurricanes Katrina, Rita and named hurricanes 

that came ashore in 2003 and 2004. The table does not show the number of 

IHP applicants who withdrew their application during the evaluation 

process.20

 20 The number of applicant cases withdrawn from the IHP consideration is not included in

the table totals; therefore, the table percentages will not equal 100 percent. 

Page 17 GAO-06-1013 Federal Emergency Management Agency
Table 3: Total Number of IHP Applicants Approved, Ineligible, Pending and Applicant Filing Appeals for Named Hurricanes 

That Came Ashore in 2003 (as of April 2006), 2004, and Hurricanes Katrina,and Rita in 2005 (as of August 2006) 

Housing Assistancea

ONA Assistancea

Hurricanes

2003b

Hurricanes

2004c

Hurricanes

Katrina and

Rita 2005d

Hurricanes

2003b

Hurricanes

2004c

Hurricanes

Katrina and

Rita 2005d

Number of applicants 

referred by FEMA to 

IHP 99,754 1,017,610 1,989,871 91,136 762,786 1,349,865

Number of applicants 

Approved 45,856 382,069 1,333,738 45,298 495,938 556,109

Percentage of 

referred applicants 

approved for 

assistance 46% 38% 67% 50% 65% 41% 

Number of ineligible 

Applicants 48,243 582,015 520,385 43,055 234,340 595,213

Percentage of 

referred applicants 

ineligible for 

assistance 48% 57% 26% 47% 31% 44%

Number of pending 

applicants 2 8 70 2 60 2,383

Percentage of 

referred pending 

applicants 0.002% 0.001% 0.004% 0.002% 0.008% 0.002%

Number of applicant 

appealse

23,219 183,338 182,990 4,624 60,941 92,642

Percentage of 

referred applicants 

appealing assistance 

decision 23% 18% 9% 5% 8% 7%

Source: GAO analysis based on FEMA data 

a

Individual IHP applicants can eligible for assistance from more than one type of IHP category; 

therefore, some individuals may be counted under both assistance categories. 

b

Calculations based on data for Hurricanes Isabel and Claudette. 

c

Calculations based on data for Hurricanes Ivan, Charley, Frances, and Jeanne. 

d

Calculations based on data for Hurricanes Katrina and Rita. 

e

Applicants who appealed IHP eligibility decisions were counted in approvals, ineligible, or withdrawn

application totals but not in the pending application category. 

In order to provide the unprecedented level of disaster assistance, FEMA 

had to significantly increase its number of home inspections. As of August 

2006, data reported by FEMA indicates that after Hurricanes Katrina and 

Page 18 GAO-06-1013 Federal Emergency Management Agency
Rita, about 1.9 million inspections21 were completed at a cost of 

approximately $179.6 million, or about $92 per inspection. For the 

hurricanes in 2003 and 2004, FEMA completed about 108,000 and 

1.0 million inspections at a cost of about $8.0 million and $70.3 million or 

about $74 and $75 per inspection, respectively. In August 2006, FEMA 

reported the average time required for completing inspections—the time 

between the application for assistance until submission of an inspection 

report—after Hurricanes Katrina and Rita was about 33 days and 25 days 

respectively. The average time for completing inspections for the 

hurricanes in 2003 was 1 to 2 days and in 2004 the average was 4 to 5 days.

A FEMA official stated that the goal for conducting inspections is a 3-day 

turnaround time. Figure 5 compares the number of inspections completed 

by contractors and the cost of the inspections for the named hurricanes in 

our review. 

 21 For Hurricane Katrina, about 154, 000 inspections were conducted using geospatial 

technology. In lieu of standard inspections, FEMA used satellite images and geospatial 

mapping to determine the depth of water in specific areas in Louisiana and Mississippi. 

Page 19 GAO-06-1013 Federal Emergency Management Agency
Figure 5: Total Number of Inspections Completed and the Total Cost of the 

Inspections for Named Hurricanes That Came Ashore in 2003 (as of April 2006), 

2004, and Hurricanes Katrina and Rita in 2005 (as of August 2006) 

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Applicant total

Hurricanes

Katrina and

Rita 2005

Applicant total

hurricanes

in 2004

Applicant total

hurricanes

in 2003

Inspections completed Dollars

Inspections completed

Costs of inspections

Source: GAO analysis based on NEMIS data.

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

According to a FEMA official, the following factors had an impact on the 

higher per inspection costs for Hurricanes Katrina and Rita: 

• Both of FEMA’s inspection contractors had automatic annual increases 

on a per inspection basis built into their contract. 

• Automatic annual increases from 2004 to 2005 for maintaining on-call 

availability were also included in the contracts. 

• For 2005, FEMA added a new requirement for inspectors to photograph 

disaster damage that added to the cost per inspection. 

• The contractors increased the per inspection cost in December 2005 

when FEMA extended the contract beyond the initial 5-year period of 

performance. 

Page 20 GAO-06-1013 Federal Emergency Management Agency
For Hurricanes Katrina and Rita, FEMA referred about 2.5 million 

applicants to SBA for assistance through its Disaster Loan Program.22 For 

hurricanes in 2003 and 2004, FEMA referred fewer applicants—about 

107,000 and 1.3 million applicants respectively, to the SBA. As of August 

2006, data reported by FEMA show that nearly 10 percent of applicants 

were sent back to FEMA from SBA for ONA consideration. In comparison, 

during hurricanes in 2003 and 2004, SBA sent back to FEMA a comparable

percentage of applicants—about 12 percent and 10 percent respectively, 

which indicates that SBA’s loan denial rate was relatively consistent 

although more applicants were referred for Hurricanes Katrina and Rita 

than in the prior 2 years. Figure 6 shows the number of applicants referred 

to the SBA for loan assistance and the number of applicants the SBA sent 

back to FEMA for ONA in 2003, 2004, and for Hurricanes Katrina and Rita

in 2005. 

Percentage of SBA 

Disaster Applicants Sent 

Back to FEMA’s ONA for 

Hurricanes Katrina and 

Rita Was Comparable to 

Those after Hurricanes in 

2003 and 2004 

 22 As of June 2006, SBA data shows that about $7.3 billion in disaster home loans were 

approved for Hurricanes Katrina and Rita, of which nearly $6.6 billion was attributable 

solely to Hurricane Katrina.

Page 21 GAO-06-1013 Federal Emergency Management Agency
Figure 6: Number and Percentage of FEMA Referrals to SBA for Disaster Loans and

the Number of SBA Disaster Loan Applicants Sent Back to FEMA for ONA for the 

Named Hurricanes That Came Ashore in 2003 (as of April 2006), 2004, and

Hurricanes Katrina and Rita in 2005 (as of August 2006) 

0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

2,250,000

2,500,000

Applicant

totals

Hurricanes

Katrina and

Rita 2005

Applicant

totals

hurricanes

in 2004

Applicant

totals

hurricanes

in 2003

Applicant referrals Percentage

Source: GAO analysis of NEMIS data.

Number of FEMA applicant referrals to SBA 

Number of SBA loan applicants sent back to FEMA

Percentage of SBA loan applicants sent back to FEMA

0

2

4

6

8

10

12

14

16

Page 22 GAO-06-1013 Federal Emergency Management Agency
Faced with unprecedented challenges in the aftermath of Hurricanes 

Katrina and Rita, FEMA devised new approaches and adapted pre-existing

ones to administer the IHP. However, our work and six federal reports we 

reviewed pointed to ongoing management challenges which hindered IHP 

implementation. These management challenges included a lack of 

planning and trained staff, and programmatic restrictions on the uses of 

IHP funds that limited FEMA’s flexibility in using IHP assistance in the 

most efficient and effective manner. In May 2006, FEMA announced 

initiatives to address the problems and recommendations cited in the 

various reports. However, it is too early to assess the success of these 

initiatives. 

Hurricanes Katrina and Rita posed numerous unprecedented challenges 

for FEMA’s administration of the IHP. These challenges arose from the 

sheer number of victims seeking assistance, including many who had lost 

key financial, residential, and other documentation in the storms, and the 

dispersal of these victims throughout the United States. As a result, FEMA 

was also challenged to conduct an unprecedented number of housing 

inspections, often with limited or no access to individuals or, in many 

cases, to the affected homes. To provide benefits quickly to eligible 

victims, communicate with about 2 million applicants scattered across the 

country and conduct inspections, FEMA developed a number of new 

approaches, as summarized in table 4.

FEMA Responded to 

the Challenges of 

Hurricanes Katrina 

and Rita with New 

Approaches, yet 

Reported Ongoing 

Management 

Challenges Hindered 

Implementing IHP 

FEMA Used New 

Approaches to Address 

Hurricanes’ 

Unprecedented Challenges 

Page 23 GAO-06-1013 Federal Emergency Management Agency
Table 4: IHP Challenges and New Approaches 

Challenge New Approach

Provide shelter and housing assistance to 

an unprecedented number of disaster 

victims quickly

FEMA initially used Public Assistance funding until it could develop a longer term strategy 

for implementing its Individual Assistance program to transition victims from short-term 

lodging, including shelters, hotels and motels to travel trailers and mobile homes, and 

finally to apartments to address longer-term housing needs.a

For Katrina, for the first time, FEMA provided $2,000 debit cards in a pilot distribution to 

approximately 11,000 disaster victims in three shelters with large numbers of disaster 

victims. 

Provide assistance to disaster victims 

dispersed across the United States (to 

provide application and eligibility 

information) 

FEMA created new IHP procedures to allow multiple household members separated by 

the disaster to receive rental assistance. As a result of Hurricanes Katrina and Rita, 

thousands of families evacuated to locations across the country and in some 

circumstances required families to temporarily separate. As a result, providing assistance 

to multiple household members was warranted, according to FEMA. 

For the first time, FEMA established a program to relocate out-of-state disaster victims to 

find temporary housing or reunite with family members sheltered in another state, 

according to FEMA. 

FEMA used new methods such as automated dialing with recorded messages and having

disaster assistance employees go door to door to communicate with disaster victims. 

FEMA worked with the post office to establish mail offices in shelters with large numbers 

of disaster victims. 

Conduct inspections for a large number of 

homes, with limited or no access, and for 

homeowners who may not be available 

during the inspection. 

FEMA used remote sensing (satellite technology or airplane flyovers) to complete 

inspections in areas that were not accessible in five Louisiana Parishes and three 

Mississippi Counties.b

FEMA established a third party inspection option allowing individuals who could not return 

home to designate a representative to meet with a FEMA inspector on their behalf. 

FEMA established a procedure to provide personal property assistance when (1) the 

exterior damage clearly indicated the residence was uninhabitable (2) the applicant was 

unable to return to the area to meet with the inspector and (3) there was no available 

designee for a third party inspection. 

Source: GAO analysis of data from FEMA Recovery Division. 

a

FEMA was still providing short-term lodging assistance to some disaster victims in Texas under the 

Public Assistance program as of August 2006, according to FEMA’s Acting Deputy Director for the 

Recovery Division. In most circumstances, manufactured housing, including mobile homes, travel 

trailers and modular housing are primarily funded under IHP. 

b

Satellite technology was used to conduct inspections in Orleans, Jefferson, St. Bernard, St. 

Tammany, and Plaquemines parishes in Louisiana; and Jackson, Harrison, and Hancock counties in 

Mississippi. This technology was also used in lieu of on-site inspections to expedite payments for 

about 10 percent of the flood insurance claims for Katrina victims. 

In addition, FEMA adapted several of its traditional approaches to respond 

to Hurricanes Katrina and Rita, according to FEMA, as summarized in 

table 5. 

Page 24 GAO-06-1013 Federal Emergency Management Agency
Table 5: IHP Challenges and Adaptations of Traditional Approaches 

Challenge Adaptation to Traditional Approach

Provide shelter and housing assistance to 

an unprecedented number of disaster 

victims quickly

FEMA deployed contract inspectors and computer equipment to facilitate the applications

of disaster victims in mass shelters, in addition to traditional locations at temporary 

disaster relief centers. 

FEMA contracted for expanded mail processing functions to keep pace with the volume of 

incoming and outgoing mail and to ensure that documents needed to complete case 

processing were scanned and indexed into applicant files in a timely manner. 

FEMA revised its procedures to provide financial housing assistance in advance for 

multiple months (rather than on a month-by-month basis)—referred to as transitional 

housing assistance—that was intended to represent 3 months of housing costs calculated 

using the national average fair market rent for a two-bedroom apartment, according to 

FEMA. 

Provide assistance to victims dispersed 

across the United States (to provide 

application and eligibility information) 

FEMA doubled its existing Internet systems capacity related to the number of applicants 

that could be on line at the same time. 

FEMA opened additional call centers by working with Internal Revenue Service and the 

private sector, among others.

FEMA added options to its Interactive Voice Recognition system to allow victims to get 

information without speaking to a caller agent, according to FEMA. 

FEMA extended its tele-registration and call center operations for more than 176 days 

after Hurricane Katrina struck, considerably longer than prior disasters, according to 

FEMA. 

Conduct inspections for a large number of 

homes, with limited or no access, and for 

homeowners who may not be available 

during the inspection. 

FEMA doubled its normal contract inspection workforce, using all of its approximate 4,000 

contract inspectors for Hurricanes Katrina and Rita. 

Source: GAO analysis of data from FEMA Recovery Division. 

Despite New Approaches, 

Reported Ongoing 

Management Challenges 

Hindered Implementing 

IHP 

Each of the assessments of the federal government’s response to 

Hurricanes Katrina and Rita we reviewed identified problems in FEMA’s 

implementation of IHP during and after the storms. Our review and our 

assessment of these reports showed that the agency’s efforts to implement 

the IHP were hindered by a lack of planning, trained staff, and program 

limitations, despite its new and revised approaches for implementing the 

program. A list of these assessments is provided in table 7. In addition, a 

summary of Katrina- and Rita-issues related to the IHP addressed in these 

reports is identified in appendix IV.

Page 25 GAO-06-1013 Federal Emergency Management Agency
Table 6: Recent Assessments of FEMA’s Performance in Response to Hurricanes Katrina and Rita 

Date Title Source

November 15, 2005 Performance and Accountability Report Fiscal Year 2005 Department of Homeland Security 

February 13, 2006 DHS/FEMA Initial Response Hotwash: Hurricane Katrina in 

Louisiana 

Department of Homeland Security 

February 15, 2006 A Failure of Initiative: Final Report of the Select Bipartisan 

Committee to Investigate the Preparation for and Response

to Hurricane Katrina 

House of Representatives 

February 23, 2006 The Federal Response to Hurricane Katrina: Lessons 

Learned 

The White House 

March 31, 2006 A Performance Review of FEMA’s Disaster Management 

Activities in Response to Hurricane Katrina 

Department of Homeland Security Office of 

Inspections and Special Reviews 

May 2006 Hurricane Katrina: A Nation Still Unprepared Report of the Committee on Homeland 

Security and Governmental Affairs 

Source: GAO based on cited reports. 

Regarding planning, the DHS Inspector General reported in March 2006 

that FEMA lacked final plans that specifically addressed the types of 

challenges the agency could be expected to face in catastrophic 

circumstances. 23 For example, because FEMA was unable to immediately 

implement IHP assistance to provide funds to transition victims from

short-term lodging, including shelters, hotels and motels to longer-term 

housing alternatives such as mobile homes or apartments, FEMA officials 

used Public Assistance funds. Normally, public assistance is provided 

(under section 403 of the Stafford Act)24 only for immediate emergency 

sheltering efforts to get assistance to individuals and households quickly. 

Under normal circumstances, IHP funds provided under Section 408 of the 

Act are intended to accommodate the longer-term housing needs of 

evacuees up to 18 months. FEMA officials said that many applicants would 

have waited months to receive their initial assistance if FEMA had 

followed normal IHP processes and procedures under Section 408 and had 

to wait until inspections were completed and IHP information and 

assistance could be communicated to disaster victims who were dispersed 

to all 50 states. However, this use of Public Assistance funds was 

problematic, according to the DHS Inspector General’s report. Because 

 23 Department of Homeland Security Inspector General, A Performance Review of FEMA’s

Disaster Management Activities in Response to Hurricane Katrina, OIG-06-32 

(Washington, D.C.: Mar. 31, 2006). 

24 42 U.S.C. § 5170b. 

Page 26 GAO-06-1013 Federal Emergency Management Agency
application for assistance is not a requirement for the provision of Public 

Assistance under section 403 of the Stafford Act, FEMA did not know 

whether disaster victims were actually eligible for assistance as a direct 

result of the disaster. This increased the potential for duplication with 

other assistance programs since there was no internal mechanism to 

determine whether an evacuee had received assistance from the IHP when 

interim housing may have already been provided. The interim housing 

assistance funded under section 403 was only phased out after FEMA was 

able to identify that an evacuee had received IHP funds. 

FEMA was aware it needed to plan for large disasters but had problems 

getting necessary funding, according to the Senate Homeland Security and

Governmental Affairs Committee’s Katrina Report.25 FEMA requests for 

$100 million for catastrophic planning and an additional $20 million for 

catastrophic housing planning in fiscal year 2004 and fiscal year 2005, 

respectively, were denied by DHS. Our review of FEMA’s implementation 

of IHP showed that FEMA’s reactive approach to planning and 

implementing the IHP on a disaster-by-disaster basis is inadequate to deal 

with the short-term and long-term needs of affected communities, 

particularly for catastrophic disasters when the agency’s resources and 

staff are strained. For example, FEMA failed to pre-identify workable sites 

and land and take advantage of available housing units from other federal 

agencies, according to a February 2006 White House report.26 We have

ongoing work focusing on the federal role in providing housing assistance 

in response to Hurricanes Katrina and Rita. 

In terms of trained staff, FEMA lacked the surge capacity to effectively 

manage the disaster assistance process. Specifically, according to the 

March 2006 DHS Inspector General report, additional trained staff were 

needed to (1) provide initial application services at Disaster Recovery and 

Call/Processing Centers, (2) process applications and respond to questions 

at the National Processing Service Centers, and (3) conduct inspections.27

First, according to the DHS Inspector General, disaster victims 

experienced delays when they contacted Call Centers or were not able to

speak with anyone. Second, disaster victims experienced delays in 

 25 Senate Homeland Security and Governmental Affairs Committee, Hurricane Katrina: A 

Nation Still Unprepared (Washington, D.C.: May 2006). 

26 The White House, The Federal Response To Hurricane Katrina: Lessons Learned

(Washington, D.C.: Feb. 23, 2006). 

27 OIG-06-32; 35, 49 and 50. 

Page 27 GAO-06-1013 Federal Emergency Management Agency
obtaining their eligibility determination, according to FEMA officials 

responsible for managing the IHP. Third, inspections were delayed, in part, 

because FEMA lacked enough contract inspectors to perform inspections, 

according to FEMA. Our analysis found, for example, that inspection times 

for Katrina and Rita took an average of two to five times longer compared 

to named hurricanes in 2004. FEMA uses inspectors that have a 

construction, real estate, or appraisal background, but it is not required, 

according to a FEMA Inspection Services Manager. FEMA requires that 

each inspector be trained on FEMA standards and policies regarding 

program eligibility and that new inspectors undergo background checks. 

In most conventional disasters, experienced inspectors are to accompany 

new inspectors in the field to ensure that they are meeting FEMA 

standards before they are allowed to complete inspections on their own. 

We have work underway assessing trends in FEMA’s resources, including 

staffing, and their impact on FEMA’s capacity to conduct operations and 

plan to report on FEMA’s workforce management efforts later this year. 

According to the March 2006 DHS Inspector General report,28 FEMA was 

not able to dedicate its full staffing strength to Hurricane Katrina for three 

primary reasons. First, at the time of the disaster, FEMA had personnel 

assigned to 38 other disasters not related to Hurricane Katrina. For 

example, Hurricane Ophelia in the Carolinas, Hurricane Rita in the Gulf 

Coast region, and flooding in the Northeast were declared disasters and 

required FEMA resources. Second, an average of 30 percent of FEMA 

Disaster Assistance Employees reported they were unavailable to respond

to Katrina or any other disaster during the August 24, 2005 – September 30, 

2005 time frame. (Disaster Assistance Employees may be unavailable for

such issues as health or family concerns.) Third, FEMA officials said, 

although FEMA was authorized 2,445 staff in August 2005, 389 positions 

were vacant and many of these were key leadership positions. The DHS 

Inspector’s report included recommendations that FEMA (1) develop a 

more comprehensive program to recruit, train, and retain local hires for 

use in augmenting FEMA’s Disaster Assistance Employees and permanent 

staff, (2) provide training to additional NPSC staff and contractors to 

enhance FEMA’s capability to perform evacuee assistance and case 

management activities, and (3) develop a disaster workforce plan for 

permanent, temporary, and reserve staff that is scalable events regardless 

 28 OIG-06-32, 88. 

Page 28 GAO-06-1013 Federal Emergency Management Agency
of cause, size, or complexity.29 FEMA concurred with the 

recommendations. 

Throughout our review FEMA officials cited their concerns regarding the 

lack of agency and contractor staffing resources needed to effectively 

implement the program during a catastrophic event. Concerns regarding 

training and staffing for disaster response management are long-standing. 

In 2003, in our report on major performance and accountability challenges

for FEMA,30 we noted that FEMA faced challenges to enhance its disaster 

assistance training and resource planning. According to the report, FEMA 

developed a program in 1999 for evaluating the knowledge, skills, and 

abilities of its staff—both permanent and temporary—who are deployed to

respond to a disaster. FEMA expected the program would ensure its 

employees would have basic qualifications to perform their jobs, but, 

according to FEMA officials, the program was not implemented because of

budget constraints. We also reported that 48 percent of FEMA’s workforce 

would be eligible to retire in the next 5 years and this would pose a 

challenge for having staff with the skills needed to perform core functions. 

Finally, FEMA officials cited legislative and regulatory limitations that 

restricted FEMA’s flexibility in implementing the IHP in the aftermath of 

Hurricane Katrina. For example, 

• FEMA’s Federal Coordinating Officer for Louisiana cited the statutory 

program’s maximum of $5,000 for home repair as one limitation, noting 

that if the $5,000 is not sufficient to fix the home, then FEMA may have 

to provide a trailer for temporary housing. He testified that 

manufactured housing is not cost-effective and can cost up to $90,000 

to $100,000 per mobile home for a group site (including total costs for 

site preparation, hauling and installation, and cost of home). He 

suggested that in some situations if FEMA were able to give disaster 

victims the maximum amount of IHP financial assistance,31 it would be 

more cost-effective because it would allow many of these families to 

find permanent housing. However, the Acting Deputy Director for 

 29 OIG-06-32; 81 and 82. 

30 GAO, Major Management Challenges and Program Risks: Federal Emergency

Management Agency, GAO-03-113 (Washington, D.C.: Jan. 2003). 

31 The maximum amount of housing and other needs assistance that an individual or

household may receive is statutorily capped at $25,000, and is adjusted annually to reflect

changes in the Consumer Price Index (CPI). The 2006 maximum is $27,200. 

Page 29 GAO-06-1013 Federal Emergency Management Agency
FEMA’s Recovery Division told us that FEMA only uses manufactured 

housing as a last resort, and in the post-Katrina and Rita environment, 

housing and the infrastructure that supports the community was 

destroyed. As a result, FEMA did not have any alternative other than to 

provide manufactured housing. 

• FEMA officials were unable to use a large supply of federally 

controlled housing units that could have been made available for 

occupancy by disaster victims with only minor repairs because

reimbursement for repairs to existing available housing units are not 

authorized under the current program regulations, according to the 

White House report on Hurricane Katrina.32 As a result, FEMA had to 

provide alternative temporary housing such as trailers and other 

manufactured housing units, at considerably greater cost, while leaving 

other potentially available housing vacant. 

A bill, the Natural Disaster Housing Reform Act of 2006, was introduced 

May 16, 2006, in the House of Representatives that would provide the 

federal government with more flexibility in the provision of short- and 

long-term housing after a major disaster. 33 For example, the bill would 

allow the President to offer disaster victims manufactured modular 

housing under the IHP if it could be provided at a lower cost than other 

readily fabricated dwellings. It would also extend repair assistance under 

the IHP, currently available only for owner-occupied residences, so that 

renters could repair existing rental units to make them habitable as 

alternate housing accommodations. The bill also proposes that the 

President may provide financial assistance or direct assistance to 

individuals or households to construct permanent or semi-permanent 

housing in any area in which the President declared a major disaster or 

emergency in connection with Hurricane Katrina of 2005 during the period 

beginning on August 28, 2005, and ending on December 31, 2007. Under 

the IHP, permanent housing construction is only available for disaster 

victims who reside in insular areas or other remote locations.34

 32White House report (Washington, D.C.: 2006), 117. 

33 H.R. 5393. 

34 See 42 U.S.C. § 5174(c)(4). 

Page 30 GAO-06-1013 Federal Emergency Management Agency
In an effort to address the problems and recommendations cited in the 

various reports, FEMA announced plans on May 24, 2006, to implement a 

number of new approaches to enhance logistics, emergency 

communications, situational awareness, housing and victim management. 

According to FEMA, the improvements related to IHP include plans to 

increase the number of trained staff and revise new policies and 

procedures. However, at the time of our review, many of these initiatives 

were in the planning or at the early implementation stage. As a result, it 

was too early to assess their potential impact on future program 

implementation. Specifically, FEMA reported plans to: 

Initiatives to Improve IHP 

Are Ongoing, but Their 

Impact Is Unknown 

• Hire a training coordinator to develop a more comprehensive training 

program to prepare existing and new personnel for Disaster Recovery 

Center assignments. According to FEMA’s Acting Deputy Director for 

the Recovery Division, they were still searching for qualified applicants 

for the training coordinator position as of August 2006. 

• Train 3,000 disaster “generalist” surge cadre employees for ready 

deployment during the height of the 2006 hurricane season and 

increase its capacity to deploy and communicate with the increased 

number of disaster employees. According to FEMA, these surge 

employees are to form a “generalist” pool of disaster workers and be 

trained in a number of basic functions cutting across traditional 

program areas including Community Relations, Individual Assistance, 

Public Assistance and Logistics. As of August 2006, FEMA said 

approximately 1,836 employees had completed the training.35

• Develop greater contract and contingency surge capabilities to expand 

application intake capacity of up to 200,000 per day (during the weeks 

following Hurricanes Katrina and Rita, FEMA recorded more than 

100,000 applications a day) and expand its Internet-based application 

capability by improving accessibility to reduce application wait times 

and FEMA Helpline information delays following a major disaster. 

According to FEMA officials, the objective of expanding its capabilities 

is to have private-sector contracts in place and resources ready to 

handle calls within 48 hours of a disaster declaration. In the past, 

FEMA had to augment its application intake surge capabilities each 

hurricane season especially during 2004 and 2005 a step usually taken 

under urgent and compelling needs, through emergency contracts, and 

 35According to FEMA, approximately 1,000, of the 3,000 disaster employees were lost 

through attrition, but FEMA was attempting to recruit additional employees. 

Page 31 GAO-06-1013 Federal Emergency Management Agency
by using Internal Revenue Service personnel. FEMA plans to award the 

contract for this initiative in 2007 and, in the interim period, plans to 

continue to utilize IRS personnel and redirect existing FEMA staff to 

augment application intake capabilities. 

• Implement a pilot program in the 2006 hurricane season to use Mobile 

Registration Intake Centers that can be deployed to emergency shelter 

locations or impacted neighborhoods without power or phone service 

and provide on-site capability to quickly apply for FEMA assistance. 

These units would be capable of providing the public access to the 

FEMA disaster assistance program via phone and the internet. FEMA 

currently has five vehicles each equipped with 20 telephones and 20 

personal computers. As of August 2006, FEMA was in the planning 

stage of upgrading each vehicle’s capacity to support 40 telephones and 

40 personal computers and has the ability to expand this effort by using 

tents with tables and equipment set up near the vehicles. FEMA’s 

intention is to evaluate the pilot program at the end of the 2006 

hurricane season to determine if they should expand this capability. 

• Increase contractor staffing capacity for housing inspections from 

7,500/per day/per contractor to 20,000/per day/per contractor. FEMA 

anticipates that this added capacity will increase the speed and 

accuracy of home inspections. FEMA intends to implement the related 

requirements with the award of its new inspection contracts tentatively 

scheduled for the end of December 2006. 

• Clarify program policies on the appropriate use and authorization of 

emergency sheltering funds (Stafford Act, section 403 assistance) and 

individual housing assistance funds (Stafford Act, section 408 

assistance) for the disaster victims. As part of this initiative, FEMA 

plans to have a draft policy in place for issuing authorization codes to 

evacuees for lodging and hotels for the 2006 hurricane season. In 

addition, FEMA plans to have a policy for Expedited Assistance that 

defines the conditions that must be met before initiating the program. 

FEMA issued a strategy for mass sheltering and housing assistance on

July 24, 2006, and plans to develop more detailed policies and 

procedures to implement the strategy.

36

 36 Federal Emergency Management Agency, Mass Sheltering and Housing Assistance, July 

24, 2006, Recovery Strategy RS-2006-1. 

Page 32 GAO-06-1013 Federal Emergency Management Agency
As we recently reported, 37 one of the major challenges FEMA faced after 

Hurricanes Katrina and Rita was balancing the need to quickly deliver 

benefits and services to needy and eligible victims while minimizing 

occurrences of fraud and abuse. As we testified in June 2006, an estimated 

16 percent, or approximately $1 billion, in FEMA IHP payments were 

improper and potentially fraudulent due to invalid application data.38 (A 

copy of our testimony is provided in app. IV.) Additionally, we found that 

FEMA made improper or potentially fraudulent IHP payments to 

applications containing names and Social Security Numbers of individuals

who were incarcerated at the time of disaster, and paid hotel room 

charges for applicants who were also receiving rental assistance 

concurrently. We also determined that FEMA had little accountability over 

debit card distribution and lacked proper controls over debit card usage. 

An estimated 16 percent of payments totaling approximately $1 billion 

were improper and potentially fraudulent due to invalid applications. The 

95-percent confidence interval surrounding the estimate of 16 percent 

ranges from 12 percent to 21 percent. The 95-percent confidence interval 

surrounding the estimate of $1 billion ranges from $600 million to 

$1.4 billion.39 The estimated amount included payments for expedited 

assistance, rental assistance, housing and personal property repair and 

replacement, and other necessary and emergency expenses. These 

payments were made to (1) applications containing Social Security 

Numbers (SSN) that were never issued or belonged to other individuals, 

(2) applicants who used bogus damaged addresses, and (3) applicants who 

had never lived at the declared damaged addresses or did not live at the

declared damaged address at the time of disaster. These payments were 

GAO Audit and 

Investigative Work 

Reveals Potential for 

Fraud and Abuse 

Related to IHP 

Applications and 

Debit Card Use 

Invalid Applications 

Provide the Potential for 

$1 Billion in Potentially 

Improper Payments 

 37 GAO, Catastrophic Disasters: Enhanced Leadership, Capabilities, and Accountability 

Can Improve the Nation’s Preparedness, Response, and Recovery, GAO-06-618 

(Washington, D.C.: Sept. 6, 2006). 

38 GAO-06-844T , p. 4 

39 Because we followed a probability procedure based on random selections, our sample is 

only one of a large number of samples that we might have drawn. Since each sample could

have provided different estimates, we express our confidence in the precision of our 

particular sample’s results as a 95 percent confidence interval (e.g., plus or minus 5 

percentage points). This is the interval that would contain the actual population value for 

95 percent of the samples we could have drawn. As a result, we are 95-percent confident 

that each of the confidence intervals in this report will include the true values in the study 

population. Also, the 16 percent of payments that was improper and potentially fraudulent

excluded payments that were returned to the U.S. government by the time of our review. 

Page 33 GAO-06-1013 Federal Emergency Management Agency
also made to applications containing information that was duplicative of 

other applications already recorded in FEMA’s system. The duplicative 

payment failures refer to instances where FEMA made payments to more 

than one application with the same damaged property and current 

addresses, and the payment selected was associated with the second or 

later application. For example, one applicant submitted an application for

the same current and damaged address that was used on another 

application, and both received payments for $2,358 of rental assistance on 

each application in September 2005. Effective preventive controls for 

duplicate applications would have detected that the two applications 

shared the same damaged and current address and acted to prevent the 

duplicate payments. 

Our projection likely understated the total amount of improper and 

potentially fraudulent payments because our work was limited to issues 

related to misuse and abuse of identity, damaged property address 

information, and duplicate payments. Our estimate did not account for 

improper and potentially fraudulent payments related to issues such as 

identity theft, and whether the applicants received rental assistance they

were not entitled to, received housing and other assistance while incurring 

no damage to their property, and/or received FEMA assistance for the 

same damages already settled through insurance claims. 

Our forensic audit and investigative work found that improper and 

potentially fraudulent payments occurred mainly because FEMA did not 

validate the identity of all applicants, the physical location of the declared 

damaged address, and ownership and occupancy of all applicants at the 

time of application. For example, in one case an applicant received $7,328

for expedited and rental assistance even though the applicant had moved 

out of the house a month prior to Hurricane Katrina. Examples of other 

improper and potentially fraudulent payments included a FEMA payment 

of $2,000 to an individual who provided a damaged address that did not 

exist, and payment of $2,358 in rental assistance to another individual who 

claimed his damaged property was inside a cemetery. We also found that

FEMA made approximately $5.3 million in payments to applicants who 

provided a post office box address as their damaged residence. For 

example, FEMA paid an applicant $2,748 who had listed a post office box 

in Alabama as the damaged property. Follow-up work with local postal 

officials revealed that the post office box listed on the application had 

been used by individuals linked to other potential fraud schemes. 

Page 34 GAO-06-1013 Federal Emergency Management Agency
Our undercover work provided further evidence of the weaknesses in 

FEMA’s management of the disaster assistance process. For example, 

FEMA provided nearly $6,000 in rental assistance to one of GAO’s 

undercover applicants who had applications that declared a bogus 

property as the damaged address. These payments continued to be 

provided even though verification with third-party records indicated that 

the GAO undercover applicant did not live at the damaged address, and 

after the Small Business Administration had reported that the damaged 

property could not be found. In another example, a FEMA inspector 

assigned to inspect a bogus property was not able to find the house 

despite numerous attempts to verify the address through the phone book,

the post office, and a physical inspection. Nevertheless, in early 2006 

FEMA provided GAO a check for $2,000 for presumed losses sustained by

this property. 

Without verifying the identity and primary residence of applicants prior to 

IHP payments, it is not surprising that FEMA also made expedited and 

rental assistance payments totaling millions of dollars to over 1,000 

applications containing information belonging to prison inmates. In other 

words, payments were made to applications using the names and SSNs of 

individuals who were not displaced as a result of the hurricanes, but rather 

were incarcerated at state prisons of the Gulf Coast states (that is, 

Louisiana, Texas, Florida, Georgia, Mississippi, and Alabama), or in federal 

prisons across the United States when the hurricanes hit the Gulf Coast. 

For example, FEMA paid over $20,000 to an inmate who had used a post 

office box as his damaged property.

Duplicative Housing 

Assistance 

Our data mining work also found potentially wasteful and improper rental 

assistance payments to individuals who were staying at hotels paid for by 

FEMA. In essence, the government paid twice for these individuals’ 

lodging—first by providing a hotel at no cost and, second, by making 

payments to reimburse these individuals for out-of-pocket rent. For 

example, FEMA paid an individual $2,358 in rental assistance, while at the 

same time paying about $8,000 for the same individual to stay 70 nights—

at more than $100 per night—in a hotel in Hawaii. In this particular case,

the duplicate payments were not only wasteful, but they were improper 

because the applicant did not live at the damaged property at the time of 

the hurricane. Another applicant stayed more than 5 months—at a cost of

$8,000—in hotels paid for by FEMA in California, while also receiving

three rental assistance payments for the two separate disasters totaling 

more than $6,700. 

Page 35 GAO-06-1013 Federal Emergency Management Agency
These instances occurred because FEMA did not require hotels to collect 

FEMA application numbers and SSNs from residents staying in FEMA-paid 

for rooms. Without this information, FEMA could not verify if the 

applicants were staying in government provided hotels before sending 

them rental assistance. Without the ability to identify all IHP applicants 

who had already received hotel lodging, FEMA provided duplicate housing 

benefits to a number of applicants. Because the hotels and FEMA did not 

collect application identification numbers, we were unable to quantify the 

magnitude of individuals who received these duplicate benefits. However, 

the tens of thousands of dollars that were wasted in the previous examples 

are illustrative of the wasteful spending we found through data mining. 

Lack of Accountability 

over Debit Cards 

Finally, we found that FEMA did not institute adequate controls to ensure 

accountability over the debit cards. Specifically, FEMA initially paid 

$1.5 million for over 750 debit cards that the government could not 

determine actually went to help disaster victims. Based on our numerous 

inquiries, upon identification of several hundred undistributed cards J.P. 

Morgan Chase refunded FEMA $770,000 attributable to the undistributed 

cards. Further, we continued to find that debit cards were used for items 

or services such as a Caribbean vacation, professional football tickets, and 

adult entertainment, which do not appear to be necessary to satisfy 

disaster-related needs as defined by FEMA regulations.40 In commenting on 

our draft report, FEMA partially concurred with our recommendation to 

increase accountability over debit cards, acknowledging the challenges 

inherent in the use of debit cards and stating that the agency has no 

current plans to use debit cards. FEMA said the agency will continue to 

evaluate the report’s recommendations to determine whether any further 

use may be warranted. 

Fraud and error in this program is not new and FEMA has struggled for 

some time with the issue of balancing expeditious assistance with 

minimizing fraud and improper payments. For example, FEMA’s and later 

DHS Office of Inspector General reported problems with the FEMA’s 

previous disaster assistance program —the Individual and Family Grants 

 40 44 C.F.R.¶ 206.111. 

Page 36 GAO-06-1013 Federal Emergency Management Agency
program—in 2001 and 2004.41 These previous reports identified problems 

related to a lack of inspections to verify property damage, relaxed 

requirements to document whether an applicant was eligible for advance 

payment of a grant, increasing the likelihood of fraud for the program. 

More recently, in May 2005, DHS’s Office of Inspector General reported 

shortcomings in FEMA’s administration of IHP and its oversight of 

inspections in response to Hurricane Francis.42 For example, FEMA 

designated a county eligible for Individual Assistance programs without a 

proper preliminary damage assessment and FEMA’s contractors were not 

required to review inspections prior to submission. 

Katrina and Rita were two of the most intense hurricanes ever recorded 

during the Atlantic hurricane season. The widespread devastation they 

wrought presented unprecedented challenges to all levels of government 

and voluntary organizations to help the hundreds of thousands of victims 

evacuate, relocate, and get food, shelter, medical care, and other 

assistance. As we and others have reported, the unprecedented geographic 

scope of the damage, the number of victims who had to be relocated, and 

the extent of the devastation clearly overwhelmed both government and 

nongovernment relief agencies, resulting in widespread dissatisfaction 

with the effectiveness of the preparation and response to the disaster. 

Conclusions 

FEMA’s processes and systems for registering hurricane victims for 

assistance, determining eligibility for IHP assistance, and managing the 

IHP were simply overwhelmed, and FEMA was unable to effectively 

manage the enormous challenge that the disasters posed for the IHP. 

GAO’s audit and that of others found a number of problems with the 

program, including a lack of appropriately trained personnel that limited 

FEMA’s effective surge capacity, an inability to effectively identify 

ineligible and duplicate applications, and consequently the payment of 

millions of dollars of assistance to ineligible persons. GAO’s audit and 

investigative work found that FEMA did not have an effective fraud 

 41 FEMA Office of Inspector General Inspections Division, FEMA’s Delivery of Individual 

Assistance Programs New York- September 11, 2001 (Washington, D.C.; Dec. 2002); DHS 

Office of Inspector General Office of Audits, The Federal Emergency Management 

Agency’s Individual and Family Grant Program Management at the World Trade Center

Disaster, OIG-04-449 (Washington, D.C.: Sept. 2002). 

42 DHS Office of Inspector General Office of Audits, Audit of FEMA’s Individuals and 

Households Program in Miami-Dade County, Florida, for Hurricane Frances, OIG-05-20 

(Washington, D.C.: May 2005). 

Page 37 GAO-06-1013 Federal Emergency Management Agency
prevention program in place prior to the landfall of Hurricanes Katrina and 

Rita. The consequences were that tens of thousands of individuals 

received an estimated $600 million to $1.4 billion in potential improper or 

fraudulent payments through February 2006. The actual amount may be 

higher because our work excluded such issues as identify theft, insurance 

fraud, and individuals who had no uninsured losses who may have 

received benefits. 

In any major disaster FEMA faces the demand to get assistance to eligible

victims, many of whom may have lost everything, expeditiously while also 

ensuring that assistance does not go to those who are ineligible. FEMA 

recognizes that the problems it encountered in managing the IHP in the 

wake of Hurricanes Katrina and Rita need to be addressed and has 

announced several initiatives to address those problems. The effect of 

those efforts cannot yet be determined, and not all of them were 

scheduled to be in effect for the 2006 hurricane season. We believe it is 

possible to have effective fraud prevention controls in place while also 

getting money to eligible victims quickly. Such controls are far more 

effective in ensuring that IHP funds are used properly than efforts to 

recoup funds paid to those who were ineligible for assistance. 

Recoupment actions are expensive and may recover only pennies on the 

dollar because the assistance has already been spent. 

We recommend that the Secretary of the Department of Homeland 

Security (DHS) direct the Director of FEMA to take the following actions 

to address the improper and potentially fraudulent payments within the 

IHP based on the findings in our testimony of June 14, 2006. Many of the 

recommendations below are preventive and thus, are intended for the 2007 

hurricane season and other future disasters that include IHP assistance 

payments. However, whenever appropriate, we have identified

recommendations we believe should also be implemented for the 

remaining aspects of assistance for Hurricanes Katrina and Rita. 

Recommendations for 

Executive Action 

For all recommendations below, FEMA should fully field test all changes

to provide assurance that all valid applicants are able to apply for and 

receive IHP payments. Also, for all recommendations, FEMA must ensure

that there are adequate manual processes in place to allow applicants who 

are incorrectly denied assistance to appeal the decision and receive aid. In

addition, we are reemphasizing the importance of implementing the six 

Page 38 GAO-06-1013 Federal Emergency Management Agency
recommendations we made previously in our June report.43 The 

recommendations in this report are designed to prevent further payments

from being made on improper and potentially fraudulent Katrina and Rita 

applications, to the extent possible recoup Katrina and Rita payments 

already identified as fraudulent and improper, and address weaknesses so 

that, in future disasters, FEMA can identify fraudulent and improper 

applications prior to making payments.44

To obtain reasonable assurance that applicants are prevented from 

receiving assistance based on invalid damaged addresses, we recommend 

that the Secretary of Homeland Security direct the Director of FEMA to 

take the following three actions: 

• Implement changes to its systems and processes to reject damaged 

addresses that are PO boxes. 

• Provide applicants immediate feedback that PO boxes are not valid 

damaged addresses. 

• Implement a process to identify damaged addresses that are not 

primary residences, such as commercial mail drops. 

To provide reasonable assurance that payments are only made based on a 

valid damaged address that was the applicant’s primary residence, we 

recommend that the Directors of DHS and FEMA take the following two 

actions: 

• Include, in the design of the address verification process recommended 

in our prior report, procedures to validate that the address an applicant

claimed as damaged was the applicant’s primary residence at the time 

of the disaster. 

• Develop and implement processes and procedures to deal with 

applications where FEMA or other inspectors have concluded that the 

damaged address was bogus. Within this process, FEMA should 

• Develop timely information sharing procedures between inspectors 

working for FEMA and other agencies to provide assurance that 

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

Control Weaknesses Exposed the Government to Significant Fraud and Abuse, 

GAO-06-655 (Washington, D.C.: June 2006). 

44 Because we have not tested all aspects of potential fraud, waste and abuse related to the 

IHP, the recommendations in this and our prior report do not represent a comprehensive 

fraud prevention program. 

Page 39 GAO-06-1013 Federal Emergency Management Agency
applicants who submitted damaged addresses that inspectors 

identified as bogus are not provided disaster assistance. 

To prevent and/or detect prisoners from improperly receiving IHP 

payments in the future we recommend that the Director of FEMA explore 

information sharing agreements with federal and state officials in charge 

of maintaining custody over prisoners that could be used to identify 

ineligible applications. 

To reduce duplicate payments, we recommend that FEMA 

• Expand the data fields used in the duplicate detection process at the 

time of application to restrict applications to one per eligible 

household, unless warranted by other circumstances, such as 

households displaced to separate locations. 

To prevent concurrent payments for lodging (i.e., rental assistance, hotels,

etc.) for which FEMA is financially responsible, we recommend that the 

Director of FEMA take the following two actions: 

• Establish procedures requiring that individuals apply with FEMA prior 

to receiving no cost disaster lodging accommodations from federal 

agencies or the Red Cross. 

• Develop procedures to provide reasonable assurance that individuals 

staying in FEMA or other no cost lodging are not also provided IHP 

rental assistance payments for the time they are in the paid for hotel 

rooms. 

To increase accountability over debit cards, we recommend that the 

Director of FEMA take the following three actions: 

• Finalize a full reconciliation to link each issued Katrina debit card 

recorded by the bank (JP Morgan Chase) to a specific IHP application, 

• Require that the bank refunds the government for any unaccounted for 

funds related to distribution of Katrina-related debit cards, and 

• Augment procedures for future disasters to provide reasonable 

assurance that accountability over debit card distribution occurs at 

each custody transfer in the distribution process. 

To identify and recoup payments based on improper and potentially 

fraudulent Katrina and Rita applications, we recommend that the Director 

of FEMA develop a comprehensive strategy—for current and future 

Page 40 GAO-06-1013 Federal Emergency Management Agency
disasters—to identify the types of improper applications discussed in this 

report and refer them for either collections or additional investigations. 

On September 18, 2006, FEMA provided written comments on a draft of 

this report (see appendix II). FEMA fully concurred with 9 of 13 

recommendations, and substantially concurred with the remaining 

4 recommendations. However, FEMA disagreed with our estimate of 

fraudulent and improper payments. FEMA noted that our estimate of 

16 percent was substantially higher than their historical estimate of 

1 to 3 percent. However, FEMA’s reported fraud rate of 1 to 3 percent is 

not based on an independent, comprehensive statistical sample of the 

entire population of individual assistance payments; instead, the 

1 to 3 percent FEMA estimate is simply the amount of overpayments that it 

identifies based on its own internal processes and procedures. 

Agency Comments 

and Our Evaluation 

FEMA fully agreed with 9 of the 13 recommendations, and stated that it

had taken or plans to take actions to specifically respond to these 

9 recommendations. While we did not evaluate the extent to which the 

implementation of these changes would address the weaknesses we 

identified with FEMA’s oversight of IHP payments, if they are properly 

implemented the changes should address our concerns. FEMA also 

partially concurred with four recommendations related to debit cards and 

hotel accommodations. Regarding our 3 recommendations on debit cards, 

FEMA stated that the agency has no current plans to use debit cards and 

will continue to evaluate the report’s recommendations to determine 

whether any further use may be warranted. In response to our 

recommendation that FEMA establish procedures requiring that 

individuals apply with FEMA prior to receiving no cost disaster lodgings

accommodations from federal agencies or the Red Cross, FEMA stated 

that the agency has implemented a protocol to ensure that disaster victims 

register and obtain an authorization code as a prerequisite for the use of 

hotels/motels as transition shelters. While FEMA cannot impose this 

protocol on the Red Cross, FEMA stated that it planned to affirm eligibility 

prior to reimbursing the Red Cross. Our objective in making this 

recommendation is to prevent duplicate housing benefits from being 

provided to registrants. Thus, if FEMA’s new process affirms the eligibility 

of registrants prior to reimbursing Red Cross, FEMA’s processes would 

address the objective of this recommendation. 

While FEMA substantially agreed with our recommendations, it disagreed

with the methodology we used to conduct our work, which formed the 

basis for many of the 13 recommendations. Specifically, in light of FEMA’s

repeated representations that 1 to 3 percent of its IHP payments are 

Page 41 GAO-06-1013 Federal Emergency Management Agency
fraudulent or improper, FEMA took exception to our estimate that 10 to 22 

percent of the payments were based on registrations containing fraudulent 

or inaccurate information. However, it is important to note that FEMA’s 

estimate of 1 to 3 percent fraud is not based on an independent, 

comprehensive statistical sample of the entire population of individual 

assistance payments; instead, it is based on the historical amount of IHP 

payments that FEMA places in its internal recoupment process, which 

includes overpayments identified through case reviews, system checks, 

and hotline tips. FEMA officials have acknowledged that their estimate is 

not based on an in-depth statistical analysis for eligibility or any other type 

of fraud. 

Further, our estimate is likely understated because it only focused on 

payments made to invalid registrations. Our estimate excluded substantial 

potential fraudulent and improper payments caused by such actions as 

identity theft, insurance fraud, duplicate government payments for 

lodging, or payments without evidence of property damage. In responding 

to our draft report, FEMA also commingled the results of our statistical 

sampling with other findings of fraudulent and improper payments that 

were not included in our estimate. For example, the reported fraudulent 

and improper payments related to individuals who stayed at FEMA-paid 

hotels and received rental assistance payments were not included in our 

statistical sample and resultant estimate of 16 percent of fraudulent and 

improper payments. 

FEMA also questioned whether some payments we categorized in our 

statistical sample results as potentially fraudulent and improper, such as 

those relating to separated households, were in fact valid payments. 

Specifically, FEMA stated that without a “knowledgeable” case by case 

analysis, our estimate was not accurate. We disagree. We were aware of 

FEMA’s separated household’s policy and did not count any payments as 

duplicates if they related to families that were displaced to different 

locations. In addition, for our statistical sample we performed a detailed

case by case analysis on sample items that included using all available 

audit and investigative tools, background information, and NEMIS data to 

ensure conclusions reached were accurate. For example, we visited 

damaged addresses and spoke with IHP applicants, landlords, neighbors, 

and postal officials. 

FEMA also stated that it has been unable to validate our results because 

we had not provided evidence related to our estimate for their review. We 

have not provided details of our sample failures to FEMA because the 

cases of fraudulent and improper payments are in the process of being 

referred to the Katrina Fraud Task Force for investigation and potential 

Page 42 GAO-06-1013 Federal Emergency Management Agency
prosecution, as has been the standard process for other fraud cases 

identified though data mining. Based on agreements with the Katrina 

Fraud Task Force, which includes the Department of Homeland Security 

Inspector General, all fraud cases will continue to be referred directly to 

the Katrina Fraud Task Force to ensure investigations and prosecutions 

are not jeopardized. 

FEMA also raised concerns with the registrants we reported who had 

received duplicate lodging assistance. FEMA commented that such a 

determination can only be made after a knowledgeable case by case 

analysis determined the appropriateness of payments. Our methodology 

used to identify data mined examples of the duplicate lodging payments 

consisted of comparing hotel receipt information and FEMA’s own 

payment data to confirm that the subject received multiple rental 

assistance payments at the same time FEMA paid for their hotel room. 

We are sending copies of this report to the Secretary of the Department of 

Homeland Security, and the Director of Federal Emergency Management 

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

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

http://www.gao.gov. Please contact either William Jenkins at (202) 512-

8757 or jenkinswo@gao.gov or Greg Kutz at (202) 512-7455 or

kutzg@gao.gov if you or your staffs have any questions concerning this 

report. Key contributors to this report are listed in appendix VI. Contact 

Page 43 GAO-06-1013 Federal Emergency Management Agency
points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. 

William O. Jenkins, Jr. 

Director, Homeland Security and Justice 

Greg D. Kutz 

Managing Director 

Forensic Audits and Special Investigations 

Page 44 GAO-06-1013 Federal Emergency Management Agency
List of Congressional Committees

The Honorable Susan M. Collins 

Chairman 

The Honorable Joseph I. Lieberman 

Ranking Minority Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Tom Davis 

Chairman 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform 

House of Representatives 

The Honorable Michael G. Oxley 

Chairman 

The Honorable Barney Frank 

Ranking Minority Member 

Committee on Financial Services 

House of Representatives 

The Honorable Harold Rogers 

Chairman 

The Honorable Martin Olav Sabo 

Ranking Minority Member 

Subcommittee on Homeland Security 

Committee on Appropriations 

House of Representatives 

The Honorable Michael McCaul 

Chairman 

The Honorable Bob Etheridge 

Ranking Minority Member 

Subcommittee on Investigations 

Committee on Homeland Security 

House of Representatives 

The Honorable Don Young 

Chairman 

Committee on Transportation and Infrastructure 

House of Representatives 

Page 45 GAO-06-1013 Federal Emergency Management Agency
The Honorable Bill Shuster 

Chairman 

Subcommittee on Economic Development, Public Buildings and 

 Emergency Management 

Committee on Transportation and Infrastructure 

House of Representatives 

The Honorable Michale G. Oxley 

Chairman 

The Honorable Barney Frank 

Ranking Minority Member 

Committee on Financial Services 

House of Representatives 

The Honorable Anthony Weiner 

House of Representatives 

Page 46 GAO-06-1013 Federal Emergency Management Agency
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To evaluate the Federal Emergency Management Agency’s (FEMA) 

disaster assistance provided in response to Hurricanes Katrina and Rita 

through the Individuals and Households Program (IHP), we assessed (1)

how the types and amounts of assistance provided to victims of 

Hurricanes Katrina and Rita compare to other recent hurricanes, (2) the 

challenges posed by the magnitude of the requests for assistance following

Hurricanes Katrina and Rita, and FEMA’s response to these challenges, 

and (3) the vulnerability of the IHP to fraud and abuse and management 

issues in the wake of Hurricanes Katrina and Rita and FEMA’s reported 

actions to address any identified problems. 

To describe the type and amount of IHP assistance FEMA provided for 

Hurricanes Katrina and Rita in comparison to assistance provided in other

hurricane disasters, we interviewed agency officials. We obtained and 

analyzed data provided by officials from FEMA’s National Processing 

Service Center in Winchester, Virginia, and compared IHP disaster 

assistance provided under Hurricanes Katrina and Rita to assistance 

provided after other hurricane-related disaster declarations occurring in 

calendar years 2003 through 2005, to the extent information was available 

from FEMA’s National Processing Service Center’s National Emergency 

Management Information System. (FEMA provided data for IHP benefits 

paid as of August 2006, and for IHP applications received as of September 

2006 for both the named hurricanes that came ashore in 2004 and 

Hurricanes Katrina and Rita. The 2003 named hurricane data was provided 

by FEMA as of April 2006. A FEMA official told us that changes to the data

for named hurricanes in 2003 from April to August 2006 would be minor 

enough to prove statistically insignificant.) We selected these hurricanes 

for comparison because they constituted a cross section of disaster 

declarations that (1) occurred within the period in which IHP was 

implemented, and (2) represented hurricane disaster declarations that 

occurred in a single state and those that occurred in multiple states 

simultaneously. We assessed the accuracy and reliability of the system by 

interviewing agency officials knowledgeable about the data system and by 

obtaining from the agency written responses regarding (1) the agency’s 

methods of data collection and quality control reviews, (2) practices and 

controls over data entry accuracy, and (3) any limitations of the data. We 

determined that the data were sufficiently reliable for the purposes of our 

engagement.

To determine the programmatic challenges FEMA faced during Hurricanes 

Katrina and Rita and agency efforts to address those challenges, we 

interviewed FEMA headquarters officials from the Recovery Division and 

staff from the agency’s Individual Assistance and Public Assistance 

Page 47 GAO-06-1013 Federal Emergency Management Agency
Appendix I: Scope and Methodology 

Branches, FEMA staff from the National Processing Service Center and 

contract Inspection Services located in Virginia, and Joint Field Office 

officials in New Orleans, Louisiana. We observed contract inspectors 

assessing damaged residential properties in New Orleans. We also 

reviewed and analyzed federal legislation and regulations that are 

applicable to FEMA disaster assistance programs prior to and after the 

implementation of IHP and relevant FEMA policies, guidance, and 

processes. We reviewed and analyzed the agency’s IHP budget, staffing, 

and performance measures. We also reviewed prior audit reports and 

assessments related to FEMA’s implementation of the IHP. 

To assess the vulnerability of the IHP to fraud and abuse and management 

issues in the wake of Hurricanes Katrina and Rita and FEMA’s reported 

actions to address any identified problems, we estimated the number of 

improper and potentially fraudulent payments based on statistical 

sampling of payments to examine whether the associated applications 

contained invalid Social Security Numbers (SSN), bogus addresses, invalid 

primary residence, and duplicate information with another application. 

Invalid SSNs refer to instances where the SSNs did not match with the 

name provided; the SSNs belonged to deceased individuals; or the SSNs 

had never been issued. Bogus addresses refer to instances where audit and 

investigative work we performed indicate that the damaged address did 

not exist. Invalid primary residences are related to applications where the 

applicant had never lived at the damaged address, or did not live at the 

damaged address at the time of the hurricanes. Duplicate information 

refers to instances where the applications contained information that is 

duplicative of another application that received a payment and was earlier 

recorded in FEMA’s system. Because we followed a probability procedure 

based on random selections, our sample is only one of a large number of 

samples that we might have drawn. Since each sample could have 

provided different estimates, we express our confidence in the precision 

of our particular sample’s results as a 95-percent confidence interval (e.g.,

plus or minus 5 percentage points). This is the interval that would contain

the actual population value for 95-percent of the samples we could have 

drawn. As a result, we are 95-percent confident that each of the 

confidence intervals in this report will include the true values in the study 

population. Also, the 16 percent of payments that was improper and 

potentially fraudulent excluded payments that were returned to the U.S. 

government by the time of our review. We also reviewed IHP processes 

and procedures for determining applicant eligibility for specific types of 

IHP assistance and analyzed prior audit reports and assessments. We also 

obtained information from FEMA’s Acting Deputy Director of Recovery on

the status of FEMA’s efforts to address the problems identified. Because 

Page 48 GAO-06-1013 Federal Emergency Management Agency
Appendix I: Scope and Methodology 

we have not tested all aspects of potential fraud, waste and abuse related

to the IHP, the recommendations in this and our prior report do not 

represent a comprehensive fraud prevention program. 

We conducted our audit work between January 2006 and September 2006 

in accordance with generally accepted government auditing standards. We 

conducted our investigative work between October 2005 and September 

2006 in accordance with the standards prescribed by the President’s 

Council on Integrity and Efficiency. 

Page 49 GAO-06-1013 Federal Emergency Management Agency
Appendix II: Comments from the Department Appendix II: Comments from the Department of Homeland Security

of Homeland Security 

Page 50 GAO-06-1013 Federal Emergency Management Agency
Appendix II: Comments from the Department 

of Homeland Security

Page 51 GAO-06-1013 Federal Emergency Management Agency
Appendix II: Comments from the Department 

of Homeland Security

Page 52 GAO-06-1013 Federal Emergency Management Agency
Appendix II: Comments from the Department 

of Homeland Security

Page 53 GAO-06-1013 Federal Emergency Management Agency
Appendix III: F

Individua

Structure a

ederal Disaster Assistance and

ls and Households Program Benefits, 

nd Processes 

Page 54 GAO-06-1013

Appendix III: Federal Disaster Assistance and 

Individuals and Households Program 

Benefits, Structure and Processes 

Federal assistance takes many forms—including the direct provision of 

goods and services, financial assistance (through insurance, grants, loans, 

and direct payments), and technical assistance—and can come from 

various sources. The Individuals and Households Program (IHP) is one of 

these individual assistance programs funded through the Stafford Act’s 

Disaster Relief Fund, as illustrated in the conceptual framework for 

federal disaster assistance in the figure 7. 

FEMA’s IHP is Part of 

Overall Federal Disaster 

Assistance 

Figure 7: Conceptual Framework for FEMA’s Individuals and Households Program 

as Part of Federal Disaster Assistance 

Source: GAO. 

Federal Disaster Assistance 

FEMA Disaster Relief Fund 

FEMA’s Individual Assistance 

programs/ services 

Individuals and Households 

Program (IHP)

 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

Congress may provide funding for federal disaster assistance to specific 

agencies for areas in which they retain expertise. For example, the 

Department of Housing and Urban Development administers funds for 

economic redevelopment and infrastructure restoration, the Department 

of Transportation provides assistance for road restoration, and other 

agencies provide assistance for activities such as providing small 

businesses disaster assistance loans and public health or medical services 

that may be needed in the affected area. 

With respect to Stafford Act activities, FEMA administers the Disaster 

Relief Fund, which provides for three major categories of aid under the 

Stafford Act—assistance to state and local governments through public 

and hazard mitigation assistance programs and assistance to individuals

and households. 

• FEMA’s Public Assistance program provides grants to eligible state and 

local governments and specific types of private nonprofit organizations 

that provide services of a governmental nature, such as fire 

departments, emergency and medical facilities, and educational 

institutions, to help cover the costs of emergency response efforts and 

work associated with recovering from the disaster. Public Assistance is 

typically the most costly disaster assistance provided.1

• FEMA’s Hazard Mitigation Grant Program provides grants to states, 

local governments, and Indian tribes for long-term hazard mitigation 

projects after a major disaster declaration. The purpose of the program 

is to reduce the loss of life and property in future disasters by funding 

mitigation measures during the recovery phase of a natural disaster. 

• FEMA’s Individual Assistance Program includes among other things, a 

crisis counseling program, disaster legal services, and direct and 

financial assistance through the IHP. The purpose of the crisis 

counseling program is to help relieve any grieving, stress, or mental 

health problems caused or aggravated by the disaster or its aftermath. 

FEMA also provides free legal counseling through an agreement with 

the Young Lawyers Division of the American Bar Association for low-

 1

 The Stafford Act sets the federal share for the public assistance program at no less than 

75 percent of eligible costs of a disaster, with state and local governments paying for the

remaining portions. FEMA may determine that a higher federal percentage would be

provided, as was the case of Hurricanes Katrina and Rita. 

Page 55 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

income individuals regarding cases that will not produce a fee.2 FEMA 

provides direct (temporary housing units) and financial assistance 

(grant funding for temporary housing and other disaster-related needs) 

to individuals and households through the IHP to meet necessary 

expenses and serious needs of eligible disaster victims who, as a direct 

result of a major disaster, have uninsured or under insured necessary 

expenses and serious needs and are unable to meet such needs through 

other means. 

FEMA’s IHP Provides 

Housing and Other Needs 

Assistance to Disaster 

Victims Who Meet 

Eligibility Requirements 

Under the IHP, there are two programs which are referred to as the 

Housing Assistance program and the Other Needs Assistance (ONA) 

program. The Housing Assistance program provides financial assistance 

for such things as rental housing, home repair assistance (up to $5,000), 

and home replacement assistance (up to $10,000).

3

 In addition, for disaster 

victims for whom rental accommodations are not available under the 

Housing Assistance program, FEMA may provide “direct assistance” in the

form of temporary housing units (e.g., mobile homes and travel trailers), 

that FEMA has acquired by purchase or lease. The ONA program also 

includes financial assistance for medical, dental, funeral, personal 

property, transportation, and other disaster-related expenses that are not 

compensated by other means. The IHP is not intended to fully compensate 

disaster victims for all losses from damage to real and personal property 

that resulted from the disaster or to provide sufficient funds to restore 

damaged property to its condition before the disaster. Rather, IHP is 

intended to provide assistance in covering expenses not covered by other 

means, such as insurance claims and payments or the victim’s own savings 

and resources. The maximum amount that an individual or household may 

receive is statutorily capped at $25,000, adjusted annually to reflect 

changes in the Consumer Price Index.4

 In addition to the financial cap, IHP 

assistance is also limited to 18 months beginning on the date the President

declares a major disaster.5

 However, the President may extend this 18-

 2

 Cases that may generate a fee are turned over to the local lawyer referral service. 

3

 These individual statutory caps—$5,000 for home repair assistance and $10,000 for home

replacement assistance— are adjusted annually to reflect changes in the Consumer Price 

Index. 

4

 In 2005, the maximum was $26,200. For 2006, the maximum is $27,200. 

5

 42 U.S.C. § 5174(c)(1)(B)(ii). See also 44 C.F.R. § 206.110(e). 

Page 56 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

month period if the President determines that due to extraordinary 

circumstances an extension would be in the public interest.6

Eligibility for IHP assistance is determined when an individual or 

household applies with FEMA and is based on the amount of property 

damage. To qualify for Housing Assistance, a disaster victim must: 

• have experienced losses in an area that has been declared a disaster by 

the President; 

• have uninsured (or underinsured) needs that cannot be met through 

other means; 7

• be a citizen of the United States, a non-citizen national, or a qualified 

alien, or have a qualifying individual who lives with the disaster victim; 

• have been living or usually live in the home in the disaster area at the 

time of the disaster; and 

• be unable to live in the home, cannot get to their home due to the 

disaster, or the home requires repairs because of damage from the 

disaster. 

If a disaster victim is eligible for housing assistance from FEMA based 

upon the above criteria, grant funds can be used for housing assistance 

purposes. Individuals or households who receive the assistance may be 

asked to show receipts to prove that it was used for eligible housing 

expenses. If an individual is unable to find a rental house or apartment 

within a reasonable commuting distance of their damaged home, FEMA 

may provide direct assistance in the form of a travel trailer or mobile 

home. Direct or financial housing assistance from FEMA does not require 

that an applicant file for an Small Business Administration (SBA) disaster

loan and is 100 percent federally funded and administered by the federal

government. While the financial housing assistance is subject to the 

$25,000 cap, the cost of direct housing assistance is not subject to the cap.

In contrast, ONA grants are provided in a cost-shared partnership between 

FEMA and the state. As part of this partnership, FEMA and the state 

engage in annual coordination efforts to determine how the ONA will be 

administered in any presidentially-declared disaster in the coming year. 

 6

 Ibid. 

7

 Loans from the Small Business Administration are considered to be the primary means of 

disaster assistance for disaster victims who have the financial ability to repay such loans.

For some IHP benefits, FEMA may refer applicants above a certain income threshold to

first apply to the Small Business Administration for disaster loan assistance. 

Page 57 GAO-06-1013 Federal Emergency Management Agency
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Individuals and Households Program Benefits, 

Structure and Processes 

For example, the state establishes award levels related to vehicle repairs, 

vehicle replacement, and funeral grants. States may choose the level of 

involvement of state officials in administering the program and assume 

complete, partial, or no responsibility for administering the program. 

Whichever option a state chooses, FEMA provides 75 percent of the grant 

funds, and the state is obligated to provide the balance of ONA grant 

funds. 

To receive ONA grant funds, an applicant must generally meet the 

eligibility requirements for housing assistance, must have necessary 

expenses or serious needs because of the disaster, and must first apply to 

the SBA Disaster Loan Program and either be declined for assistance, or 

demonstrate that SBA disaster assistance is insufficient to meet all 

disaster-related necessary expenses and serious needs. Applicants who do 

not meet a certain income threshold may be excused from the requirement 

to complete the SBA disaster loan application. For example, in 2005, a 

household of four with an income less than $24,188 would not be required

to complete the SBA loan application. 

The types of assistance that may be provided depending on the level of the 

applicant’s income are for personal property, transportation, and 

moving/storage expenses. Eligibility for medical, dental, funeral and 

other/miscellaneous expenses is not dependent on an applicant’s income; 

for these categories applicants are referred directly to ONA for assistance. 

Specifically, FEMA may provide ONA grant funding to replace personal 

property, repair and replace vehicles, and reimburse moving and storage 

expenses if an applicant is ineligible for an SBA disaster loan. To receive

ONA grants, for public transportation, medical and dental, and funeral and 

burial expenses, disaster victims are not required to apply for an SBA loan

to be eligible and income levels are not subject in determining eligibility. 

FEMA’s Decentralized 

Structure for 

Implementing the IHP 

Relies Primarily on 

Contract and Temporary 

Employees 

FEMA manages the IHP primarily through a de-centralized structure of 

permanent and temporary field offices staffed primarily by contract and 

temporary employees. The offices include the FEMA Recovery Division in

FEMA Headquarters, regional offices, National Processing Service 

Centers, Joint Field Offices, Area Field Offices, and Disaster Recovery

Centers. The Stafford Act authorizes FEMA to draw upon temporary 

personnel for disaster operations. 

FEMA’s Recovery Division in Washington, D.C., manages the IHP and as of 

August 2006 had about 15 people to develop and issue policies and 

procedures for implementing the individual assistance programs. Eight 

Page 58 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

members of that staff are specifically responsible for managing the IHP. In

FEMA’s 10 regional offices, one or two full-time employees manage 

individual assistance programs. The regional office staff may participate in

the preliminary disaster assessment after a disaster to determine what 

individual assistance is needed. 

FEMA’s National Processing Service Centers (NPSC) provide centralized 

disaster application service to FEMA customers and help coordinate with 

other assistance programs. The centers are to provide an automated 

“teleregistration” service—a toll-free phone bank through which disaster 

victims apply for IHP assistance and through which their applications are 

processed and their questions answered. The NPSCs are also to assist with 

referrals to other assistance programs, process appeals, recertify existing

rental assistance, assist with recovering funds, and respond to 

congressional inquiries. As of August 2006, a total of 13 permanent FEMA 

employees were working at the NPSCs in the United States and were 

supported by several hundred temporary employees (whose numbers can 

be increased by 2,000 to 3,000 additional temporary employees for 

application processing after a disaster), as well as contract employees. 

FEMA operates four NPSCs in Denton, Texas; Puerto Rico; Winchester, 

Virginia; and Hyattsville, Maryland. 

• The Texas NPSC is in charge of caller services including call centers, 

and the agency’s quality control program. (Although all NPSCs have 

call centers within their offices, the Texas NPSC is in charge of the 

general policies and procedures for those call centers, and also sets up 

arrangements with the IRS and private companies when FEMA needs 

to handle added call volume.) 

• The Puerto Rico NPSC is also a call center, with a specialty in handling 

calls from Spanish speaking applicants. This center has oversight from 

the Texas NPSC. 

• The Virginia NPSC is the central point of contact for the National 

Emergency Management Information System, the main 

database/automated processing system for IHP application and 

benefits determination and processing, the NPSC Coordination Team, 

and the Inspection Management contracts. 

• The Maryland NPSC is responsible for oversight of all mail operations 

and receives management oversight from the Virginia NPSC. 

At FEMA’s Inspections Services Section, located in the Virginia NPSC, as 

of August 2006, one permanent and approximately 35 to 40 temporary 

FEMA employees oversee the work of two firms with standing contracts 

to perform inspection services. Each firm has about 2,000 inspectors who 

Page 59 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

visit applicants’ homes to verify disaster-related damages to real and 

personal property. 

Temporary FEMA field locations are established after a disaster occurs. 

FEMA deploys about 600-700 “reservists” or disaster assistance employees

who are deployed at field offices at the state and local levels to augment 

full time FEMA staff temporarily re-assigned from FEMA headquarters and 

regional offices. 

• The Joint Field Office is to serve as the temporary headquarters for 

disaster response and recovery efforts and is typically located in the 

capital of the state where a disaster occurred or in the high impact 

area. The joint office houses FEMA, state partners, other federal 

agencies, and voluntary agencies. Two key FEMA joint field office 

officials direct and coordinate disaster response and recovery 

operations for program implementation at the local level. The Federal 

Coordinating Officer is responsible for assessing disaster needs, 

establishing the joint office and Disaster Recovery Centers and other 

possible disaster facilities, and coordinating the administration of 

disaster relief. The FEMA operations section chief’s responsibilities 

include managing the Human Services Branch that oversees provision 

of mass care and food, individual assistance, the coordination of 

voluntary agency contributions, and donations. The role of regional 

coordinating structures varies depending on the situation. Many 

incidents may be coordinated by regional structures primarily using 

regional assets. Larger, more complex incidents may require direct 

coordination between the joint office and the national level, with 

regional structures continuing to play a supporting role. The focal point 

for coordination of federal support is the joint field office. 

• FEMA may also establish Area Field Offices whose staff and 

organization is to mirror the joint field office and provide similar 

coordination and oversight in support of the joint office at the local 

level. The area office reports to the joint office. The area office’s 

operational responsibilities are to be delineated by the joint office 

which may establish as many area filed offices as deemed necessary 

and efficient to the response. 

• FEMA Disaster Recovery Centers are offices where applicants may go 

for information about FEMA and other disaster assistance programs. 

Recovery center locations are usually announced in local newspapers 

and on local television and radio stations and are established close to 

the disaster area, often in schools or armories to be readily accessible 

to those in need of assistance. The centers are temporary facilities 

Page 60 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

jointly operated by the state and FEMA where representatives of 

federal agencies, local and state governments, and voluntary relief 

organizations provide guidance regarding disaster recovery and 

literature on services available, including housing assistance and 

individual and household grants information, educational materials, 

crisis counseling, assistance in completing applications and answers to 

questions, resolution to problems, and referrals to agencies that may 

provide further assistance. The number of centers depends on the 

magnitude of the disaster and the size of the area included in the 

declaration.

FEMA’s Process for 

Providing IHP Benefits 

Under the Stafford Act, the federal government provides disaster 

assistance after a presidential disaster declaration. A presidential disaster

declaration results from a legal process involving specific steps taken by 

local, state, and federal governments as generally shown in figure 8. 

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Individuals and Households Program Benefits, 

Structure and Processes 

Figure 8: Disaster Declaration Process 

Source: GAO analysis of FEMA information.

1.

2.

EVENT

State makes request for federal/state 

Preliminary Damage Assessment

PRELIMINARY DAMAGE 

ASSESSMENT

Survey impacted area

Compile information

4. FEMA HEADQUARTERS

Declaration Policy and Processing

FEMA Director’s Office reviews

and makes recommendation

5.

FEMA REGIONAL OFFICE

Regional Summary

Regional Analysis

and Recommendation

Governor’s request (addressed to President) 

is forwarded to regional office for inclusion in 

Regional Summary and Regional Analysis

and Recommendation

Regional Summary, Regional Analysis and 

Recommendation and State’s request for 

Declaration forwarded to FEMA headquarters

3.

Preliminary Damage Assessment

Recommendation forwarded to President

PRESIDENT

Determines whether or

not to declare disaster

After a disaster occurs and the state determines that effective response 

may exceed both state and local resources, a state is to first request a 

Page 62 GAO-06-1013 Federal Emergency Management Agency
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preliminary damage assessment.8 Teams are assembled from individuals 

from FEMA, the Small Business Administration, state emergency 

management, and the local jurisdiction who are to (1) assess the types of 

dwellings affected, (2) assess the probable insurance and income levels of

residents, and (3) estimate the number of individuals affected to determine 

potential funding requirements. After the assessment is complete, the

Governor is to determine if federal disaster assistance is needed and, if it 

is, he or she is to submit a request to the President through the FEMA 

Regional Director who reviews and communicates the request to FEMA’s 

Headquarters within the Emergency Preparedness and Response 

Directorate. The Directorate’s Undersecretary is to then make a 

recommendation to the President, who makes the final decision to declare 

a major disaster, an emergency, or deny the request for federal assistance. 

FEMA Provides Disaster 

Victims with Multiple 

Means to Apply for 

Assistance 

Once the President declares a disaster and decides to provide federal 

disaster assistance, disaster victims in declared counties must first apply 

for assistance with FEMA, by phone, in person at a disaster recovery 

center, or over the Internet. Typically, an application period is closed 60

days following the date of the disaster declaration.9

 During the application 

process, an individual provides personal information including Social

Security number, current and pre-disaster address, a telephone number, 

insurance information, total household annual income, and a description 

of losses caused by the disaster. After the submission of an application, 

FEMA provides applicants with a copy of their application and a program 

guide, “Help After a Disaster: Applicant’s Guide to the Individuals and 

Households Program.” The document, whose cover is shown in figure 9, is 

also available on the Internet. 

 8

 The requirement for a joint preliminary damage assessment may be waived for those 

incidents of unusual severity and magnitude that do not require field damage assessments

to determine the need for supplemental federal assistance under the Stafford Act, or in

such other instances determined by the Regional Director upon consultation with the State. 

It may be necessary, however, to conduct an assessment to determine unmet needs for

managerial response purposes. 

9

 The Regional Director or his/her designee may extend the application period when the 

State requests more time to collect applications from the affected population. The Regional 

Director or his/her designee may also extend the standard application period when 

necessary to establish the same application deadline for contiguous counties or states. 

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Structure and Processes 

Figure 9: Cover of FEMA’s Applicant’s Guide to the Individuals and Households

Program 

Source: FEMA.

Once a FEMA representative records personal information from a disaster 

application and provides the applicant with a FEMA application number, 

FEMA’s National Emergency Management Information System

automatically determines potential eligibility for designated categories of 

assistance. 

Page 64 GAO-06-1013 Federal Emergency Management Agency
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Structure and Processes 

To confirm that damages occurred to the home and personal property as 

reported in disaster assistance applications, FEMA is to conduct individual 

inspections to verify damage, ownership, and occupancy. Contract 

inspectors are to schedule damage inspection appointments with 

applicants. The inspections usually take about 30 to 60 minutes, according 

to FEMA. Homeowners are not required to be at home at the time of the 

inspection, but a designated representative generally must be present and 

the applicant must be able to provide proof of ownership and occupancy 

to the inspector. This assessment provides a basis to determine how much 

assistance an individual/household should receive for housing repair and 

replacement and for other needs. If an applicant’s home or its contents 

were damaged and the applicant has insurance, they must provide FEMA 

with a letter from the insurance company regarding the settlement of the 

claim before FEMA issues its inspection report. (If the damages are caused 

by flooding and the applicant has flood insurance, FEMA will issue an 

inspection report before receiving a copy of the applicant’s flood 

insurance decision letter because temporary living expenses are not 

covered by flood insurance.) 

According to FEMA, the system reportedly determines eligibility for about 

90 percent of applicants requesting housing assistance, usually within 

10 days of application. FEMA caseworkers are to process the remaining 

applications that cannot be automatically processed, to determine an 

applicant’s eligibility for disaster assistance based on additional 

documentation, for example, documentation of insurance payment; these 

applications may take longer to process.10 If the applicant qualifies for a 

grant, FEMA sends the applicant a check by mail or deposits the funds 

granted in the applicant’s bank account. FEMA will also send a letter 

describing how the applicant is to use the money (for example; repairs to 

their home or to rent another house while the applicant makes repairs). 

Recipients of IHP assistance must recertify their continuing need for 

assistance every 30 to 90 days, depending on the individual circumstances. 

FEMA uses three criteria to recertify the applicant. 

• First, FEMA may provide continued housing assistance (travel trailers 

or rental assistance) during the period of assistance, based on need, 

and generally only when adequate, alternate housing is not available. 

 10 The National Emergency Management Information System also interfaces with SBA’s 

information systems to refer applicants (based on self-declared income and number of

individuals in household) to SBA for loan purposes. 

Page 65 GAO-06-1013 Federal Emergency Management Agency
Appendix III: Federal Disaster Assistance and

Individuals and Households Program Benefits, 

Structure and Processes 

• Second, for rental assistance, the applicant must show that he or she 

used the previous rental assistance to pay rent by sending copies of 

receipts.11

• Third, the applicant must show he or she is working to find permanent 

housing that the applicant can afford. For example, FEMA is to require 

applicants to show they are actively seeking affordable housing, 

maintain a list of addresses they looked at, including the landlord’s 

name and phone number, and specify the reason(s) for not renting the 

units. A FEMA Housing Adviser may verify with landlords that a 

contact was made by an applicant seeking a rental unit. 

Conversely, if FEMA determines that the applicant does not qualify for an

IHP grant, it is to send the applicant a letter explaining why the applicant 

was turned down and gives the applicant a chance to appeal the decision. 

Applicants who are denied housing and other needs assistance under IHP 

have 60 days from the date that FEMA notifies the applicant to appeal the

decision. According to FEMA, common reasons for denial include: 

• Adequate insurance coverage. 

• Damage to secondary home, not a primary residence. 

• Duplicate applications made from the same address. 

• Inability to prove occupancy or ownership. 

• More information is needed before the analysis can be completed. 

 11 For Hurricanes Katrina and Rita, a process was established to allow the first $2,358 rental 

assistance award to be spent on essential needs if the applicant filled out the Declaration of 

Use of Funds. 

Page 66 GAO-06-1013 Federal Emergency Management Agency
Appendix IV: Issues Reported Related to 

FEMA’s IHP Disaster Assistance Provided for Appendix IV Katrina : Issues Reported Related to 

FEMA’s IHP Disaster Assistance Provided for 

Katrina 

Issue 

GAO 

February 

2006a

DHS / 

FEMA 

February 

2006b

House 

Report 

February 

2006c

White

House 

Report 

February 

2006d

DHS 

Inspector

General 

March

2006e

Senate 

Report 

May 2006f

GAO June

2006g

GAO June

2006h

GAO July

2006i

Planning

Inadequate 

planning 

X X X X

Lack of guidance/ 

procedures 

X X X

Inadequate internal 

controls 

X X X X X X

Inability to track 

evacuees 

X

Inefficient method 

for procuring 

manufactured 

housing 

X X

Inadequate 

contractor oversight 

X

Need to coordinate 

with other agencies 

X X X

Trained staff 

Insufficient staffing X X X

Inadequate training X X

Program structure 

Reimbursement for 

repairs to existing 

housing units not 

authorized. 

X

Program is 

cumbersome, 

confusing, and not 

easily administered, 

subject to funding 

caps, cost share 

requirements, and 

time limitations. 

X

Long term needs 

not addressed

X

Source: GAO analysis of assessments cited.

a

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). 

b

DHS/FEMA, Initial Response Hot Wash Hurricane Katrina In Louisiana, DR-1603-LA (New Orleans, 

Louisiana: Feb. 13, 2006). 

Page 67 GAO-06-1013 Federal Emergency Management Agency
Appendix IV: Issues Reported Related to 

FEMA’s IHP Disaster Assistance Provided for 

Katrina 

c

U.S. House of Representatives, A Failure of Initiative: Final Report of the Select Bipartisan 

Committee to Investigate the Preparation for and Response to Hurricane Katrina (Washington, D.C.: 

February 15, 2006) 

d

The White House, The Federal Response To Hurricane Katrina: Lessons Learned (Washington, 

D.C.: Feb. 15, 2006). 

e

Department of Homeland Security Inspector General, A Performance Review of FEMA’s Disaster 

Management Activities in Response to Hurricane Katrina, OIG-06-32 (Washington, D.C.: Mar. 31, 

2006). 

f

United States Senate Committee on Homeland Security and Governmental Affairs, Hurricane 

Katrina: A Nation Still Unprepared (Washington, D.C., May 2006). 

g

GAO, 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). 

h

GAO, Expedited Assistance for Victims of Hurricanes Katrina And Rita: FEMA’s Control Weaknesses

Exposed the Government to Significant Fraud And Abuse, GAO-06-655 (Washington, D.C.: June 16, 

2006). 

i

GAO, Individual Assistance Programs: Framework for Fraud, Prevention, Detection, and Prosecution, 

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

Page 68 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual Appendix V Assistance program : GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 69 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 70 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 71 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 72 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 73 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 74 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 75 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 76 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 77 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 78 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 79 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 80 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 81 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 82 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 83 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 84 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 85 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 86 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 87 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 88 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 89 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 90 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 91 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 92 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 93 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 94 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 95 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 96 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 97 GAO-06-1013 Federal Emergency Management Agency
Appendix V: GAO’s June 14, 2006 Testimony 

on Fraud and Abuse of FEMA’s Individual 

Assistance program 

Page 98 GAO-06-1013 Federal Emergency Management Agency
Appendix VI: 

A

GAO Contact and Staff 

cknowledgments 

Page 99 GAO-06-1013

Appendix VI: GAO Contact and Staff 

Acknowledgments 

William Jenkins, Director, Homeland Security & Justice Issues (202) 512-

8757 (jenkinswo@gao.gov) and Greg Kutz, Managing Director, GAO 

Forensic Audits and Special Investigations, (202) 512-7455 

(kutzg@gao.gov) 

In addition to the contacts named above, the following individuals from 

GAO’s Forensic Audits and Special Investigations and GAO’s Homeland 

Security and Justice Team also made contributions to this report: Kord 

Basnight, James Berry Jr., Gary Bianchi, Valerie Blyther, Matthew Brown, 

Norman Burrell, Willie Commons, Jennifer Costello, Christine Davis, 

Katherine Davis, Paul Desaulniers, Steve Donahue, Dennis Fauber, 

Christopher Forys, Adam Hatton, Aaron Holling, William O. Jenkins Jr., 

Chris Keisling, Jason Kelly, John Kelly, Sun Kim, Stan Kostyla, Crystal 

Lazcano, Tram Le, John Ledford, Jennifer Leone, Barbara Lewis, Gary M. 

Malavenda, Marvin McGill, Jonathan Meyer, Gertrude Moreland, Richard 

Newbold, Kristen Plungas, Jennifer Popovic, John Ryan, Sidney Schwartz, 

Robert Sharpe, Gail Spear, Tuyet-Quan Thai, Patrick Tobo, Matthew 

Valenta, Tamika Weerasingha, and Scott Wrightson. 

GAO Contacts 

Acknowledgments 

 Federal Emergency Management Agency
Glossary

Glossary 

Financial assistance to address the dental costs. 

Financial assistance to address the cost of funeral services, burial, 

cremation, and other funeral expenses related to a death caused by the 

disaster. 

Expedited assistance provides fast track money in the form of $2,000 in 

expedited payments to eligible disaster victims to help with immediate, 

emergency needs of food, shelter, clothing and personal necessities. 

FEMA changed the maximum amount from $2,000 to $500 on July 24, 2006. 

Money to address the cost of funeral services, burial, cremation, and other 

funeral expenses related to a death caused by the disaster. 

Financial assistance provided to replace the primary residence of an 

owner-occupied dwelling if the dwelling was damaged by the disaster and 

there was at least $10,000 of damage (as adjusted annually to reflect 

changes in the CPI). The applicant may either replace the dwelling in its 

entirety for $10,000 (as adjusted annually to reflect changes in the CPI) or 

less, or may use the assistance toward the cost of acquiring a new 

permanent residence that is greater in cost than $10,000 (as adjusted 

annually to reflect changes in the CPI). 

Financial assistance provided for the repairs of uninsured disaster-related

damages to an owner’s primary residence. The funds are to help return 

owner-occupied primary residences to a safe and sanitary living or 

functioning condition. Repairs may include utilities and residential 

infrastructure damaged by a major disaster. 

The ONA Program is designed for those with serious needs who have no 

other source of assistance. The program covers necessary expenses such 

as uninsured personal property, medical and dental expenses and funeral 

expenses. 

Dental Expenses 

Direct Assistance 

Expedited Assistance 

Funeral Expenses 

Home Replacement Grant 

Home Repair Grant 

IHP Other Needs 

Assistance Categories 

Lodging Expenses 

Page 100 GAO-06-1013 Federal Emergency Management Agency
Glossary

Expenses for reasonable short-term accommodations that individuals or 

households incur in the immediate aftermath of a disaster. Lodging 

expenses may include but are not limited to the cost of brief hotel stays. 

Financial assistance to address the cost of medical treatment or the repair

or replacement of medical equipment required as a result of the disaster. 

Financial assistance to address necessary expenses and serious needs 

related to moving and storing personal property to avoid additional 

disaster damage. 

The cost associated with acquiring an item or items, obtaining a service, or 

paying for any other activity that meets a serious need. 

Financial assistance to address the cost of other specific disaster-related 

necessary expenses and serious needs of individuals and households. 

Financial assistance to address the cost of repairing and/or replacing 

disaster damaged items, such as furniture, bedding, appliances, and 

clothing. 

A mechanism used to determine the impact and magnitude of damage and 

the resulting unmet needs of individuals, businesses, the public sector, and 

the community as a whole. 

As part of IHP housing assistance, rental assistance funds address the cost 

renting another place to live. For homeowners, this money may be 

provided in addition to home repair, if needed. 

The requirement for an item, or service, that is essential to an applicant’s 

ability to prevent, mitigate, or overcome a disaster-related hardship, injury 

or adverse condition. 

Medical Expenses 

Moving & Storage 

Expenses 

Necessary Expense 

Other Needs Expenses 

Personal Property 

Expenses 

Preliminary Disaster 

Assessment 

Rental Assistance 

Serious Need 

Page 101 GAO-06-1013 Federal Emergency Management Agency
Glossary

Transitional Housing Assistance is a cash grant of up to $2,358 per 

household intended to cover an initial 3 months of rental payments for 

eligible applicants. Transitional Housing Assistance is a form of rental 

assistance and was implemented for the first time in selected disaster 

areas in Louisiana and Mississippi during Hurricane Katrina. 

Financial assistance for public transportation and any other transportation 

related costs or expense and the cost of repairing and/or replacing a 

disaster damaged vehicle that is no longer usable because of disasterrelated damage. 

Transitional Housing 

Assistance 

Transportation Expenses 

Page 102 GAO-06-1013 Federal Emergency Management Agency
Related GAO Products Related GAO Products 

Small Business Administration: Actions Needed to Provide More Timely

Disaster Assistance. GAO-06-860. Washington, D.C.: July 28, 2006. 

Individual Disaster Assistance Programs: Framework for Fraud 

Prevention, Detection, and Prosecution. GAO-06-954T. Washington, D.C.: 

July 12, 2006.

Expedited Assistance for Victims of Hurricanes Katrina and Rita: 

FEMA’s Control Weaknesses Exposed the Government to Significant 

Fraud and Abuse. GAO-06-655. Washington, D.C.: June 16, 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. 

Hurricanes Katrina and Rita: Coordination between FEMA and the Red

Cross Should Be Improved for the 2006 Hurricane Season. GAO-06-712. 

Washington, D.C.: June 8, 2006. 

Hurricane Katrina: Improving Federal Contracting Practices in 

Disaster Recovery Operations. GAO-06-714T. Washington, D.C.: May 4, 

2006. 

Hurricane Katrina: Planning for and Management of Federal Disaster

Recovery Contracts. GAO-06-622T. Washington, D.C.: April 10, 2006. 

Hurricane Katrina: Comprehensive Policies and Procedures Are Needed 

to Ensure Appropriate Use of and Accountability for International 

Assistance. GAO-06-460. Washington, D.C.: April 6, 2006. 

Hurricane Katrina: Policies and Procedures Are Needed to Ensure 

Appropriate Use of and Accountability for International Assistance. 

GAO-06-600T. Washington, D.C.: April 6, 2006. 

Agency Management of Contractors Responding to Hurricanes Katrina 

and Rita. GAO-06-461R. Washington, D.C.: March 15, 2006. 

Hurricane Katrina: GAO’s Preliminary Observations Regarding 

Preparedness, Response, and Recovery. GAO-06-442T. Washington, D.C.: 

March 8, 2006. 

Page 103 GAO-06-1013 Federal Emergency Management Agency
Related GAO Products 

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.: February 13, 2006. 

Statement by Comptroller General David M. Walker on GAO’s 

Preliminary Observations Regarding Preparedness and Response to 

Hurricanes Katrina and Rita. GAO-06-365R. Washington, D.C.: 

February 1, 2006. 

Hurricanes Katrina and Rita: Provision of Charitable Assistance. 

GAO-06-297T. Washington, D.C.: December 13, 2005. 

Hurricanes Katrina and Rita: Preliminary Observations on Contracting 

for Response and Recovery Efforts. GAO-06-246T. Washington, D.C.: 

November 8, 2005. 

(440473/192191) Page 104 GAO-06-1013 Federal Emergency Management Agency
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