Office of Inspector General 

DEPARTMENT OF HOMELAND SECURITY 

Audit of FEMA’s Individuals and 

Households Program in Miami-Dade 

County, Florida, for Hurricane Frances 

OIG-05-20 May 2005 

Office of Audits 
Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by 

the Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector General 

Act of 1978. This is one of a series of audit, inspection, and special reports prepared by the OIG as 

part of its DHS oversight responsibility to promote economy, effectiveness, and efficiency within the 

department. 

This report assesses the strengths and weaknesses of the department’s Individuals and Households 

Program. It is based on interviews with employees and officials of relevant agencies and institutions, 

direct observations, and a review of applicable documents. 

The recommendations herein have been developed to the best knowledge available to the OIG, and 

have been discussed in draft with those responsible for implementation. It is our hope that this report 

will result in more effective, efficient, and economical operations. We express our appreciation to all 

of those who contributed to the preparation of this report. 

 

Richard L. Skinner 

Acting Inspector General 
Contents 

 

 Introduction......................................................................................................................................3 

 

 Results in Brief ................................................................................................................................3 

 

 Background......................................................................................................................................4 

 

Purpose, Scope, and Methodology...................................................................................................6 

Results of Audit ...............................................................................................................................8 

Amendment to Major Disaster Declaration ..............................................................................8 

 

Verification of IHP Disaster Losses for Other Needs Assistance............................................12 

Repairing and Replacing Household Room Items Should Be More Closely Aligned to 

Actual Losses.....................................................................................................................12 

Verification of Personal Property Losses Using Verbal Representations .........................15 

Guidance Needed for Authorizing Assistance to Replace or Repair Automobiles ...........16 

Eligibility Criteria to Determine When to Pay for Funeral Expenses Need Refinement ..18 

Need For Disaster-Related Miscellaneous Items Could be Better Verified ......................21 

Verification of IHP Disaster Losses for Housing Assistance ..................................................23 

Expedited Rental Assistance Not Provided Based on Proven Need..................................23 

Controls Over Rental Assistance Eligibility Need Improvement......................................25 

Controls Over Home Repair and Replacement Assistance Need Improvement................27 

Oversight of Inspections Needs Improvement.........................................................................28 

Contractor’s Review of Inspection Work ..........................................................................28 

FEMA’s Review of Inspection Data..................................................................................29 

Inspectors’ Independence...................................................................................................30 

Appendices 

 

 

 Appendix A: Description of the Saffir-Simpson Hurricane Scale .............................................32 

 Appendix B: The President’s Declaration of a Major Disaster for Hurricane Frances..........34 

Appendix C: Detailed Breakdown of IHP in Miami-Dade Approved and Audited Costs ........35 

Appendix D: Room Items That May Be Funded Under the ONA Component of the IHP .......36 

Page 1 
Contents 

Appendix E: FEMA’s Automobile Replacement Awards Versus Blue Book Values ..............38 

Appendix F: Data Queries Performed by FEMA Inspections Services Branch........................39 

Appendix G: Recommendations ................................................................................................41 

Appendix H: Management Comments.......................................................................................43 

Appendix I: Major Contributors To This Report......................................................................58 

Appendix J: Report Distribution...............................................................................................59 

Abbreviations 

 

 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

EP&R Emergency Preparedness and Response 

EA Expedited Assistance 

FEMA Federal Emergency Management Agency 

IHP Individuals and Households Program 

MPH Miles Per Hour 

NEMIS National Emergency Management Information System 

OIG Office of Inspector General 

ONA Other Needs Assistance 

PDA Preliminary Damage Assessments 

U.S. United States 

SBA U.S. Small Business Administration 

Page 2 
OIG

Department of Homeland Security 

Office of Inspector General 

Introduction 

In 2004, the State of Florida was affected by an unprecedented four hurricanes 

in two months causing widespread damage and destruction. The inclusion of 

Florida’s Miami-Dade County in the declaration for Hurricane Frances and 

subsequent awards of approximately $31 million by the Federal Emergency 

Management Agency (FEMA) under its Individuals and Households Program 

(IHP) has been the subject of public scrutiny from Federal, State, and local 

elected officials, the U.S. Congress, and the news media. In particular, they 

questioned whether conditions in Miami-Dade warranted a Presidential 

disaster declaration and whether the level and type of IHP assistance provided 

to Miami-Dade County residents was justified. 

The purpose of our audit was to determine whether FEMA had sufficient 

evidence to support the county’s eligibility for IHP assistance and whether 

adequate program controls existed to ensure that funds were provided only to 

eligible applicants, for eligible expenses. 

Results in Brief 

The administration of the IHP has two key control points: (1) the disaster 

declaration and related amendment process, which is designed to assess 

damages and losses and determine and document the need for a major disaster 

declaration and FEMA assistance; and (2) the inspection of damages and 

verification of losses reported by individuals and households to determine 

whether the losses are disaster-related and eligible for FEMA assistance. Our 

review of the IHP in Miami-Dade disclosed shortcomings in both areas. 

Page 3 
Specifically: (1) FEMA designated Miami-Dade county eligible for 

Individual Assistance programs without a proper preliminary damage 

assessment; (2) funds provided for repairs and replacement of household room 

items were not based on actual disaster-related damages or losses; (3) the 

verification of some personal property damages or losses were based on 

undocumented verbal representations; (4) guidance and criteria for replacing 

and repairing of automobiles and the reimbursement of expenses for funerals 

and other items were generally lacking; (5) some Expedited Rental Assistance 

applicants received, but may not have had a need for such assistance; and (6) 

rental assistance awards were made to some applicants without reasonable 

assurance of eligibility. 

Further, FEMA’s oversight of inspections needs improvement. Specifically: 

(1) contractors were not required to review inspections prior to submission; 

(2) edit checks for inspection errors were made after payment rather than 

before; and (3) no provisions existed for inspectors to recuse themselves from 

inspections that may present possible conflicts of interest. 

The policies, procedures, and guidelines used in Miami-Dade County for the 

IHP were also used throughout the State of Florida, casting doubt about the 

appropriateness of IHP awards made to individuals and households in other 

counties of the state as a result of the four hurricanes, particularly those 

counties that had only marginal damage. Further, according to FEMA 

officials, most of the procedures were used for disasters in other states making 

the conditions and recommendations broadly applicable to FEMA’s 

implementation of the IHP nationwide. 

Background 

In response to Hurricane Frances, FEMA was placed in a unique situation 

because weather forecasters had predicted hurricane force winds and 

substantial damage to the coastal communities of eastern Florida, including 

Miami-Dade County. However, these predictions were not realized in the 

county and the disaster-related impact upon residents was not documented by 

damage assessments. These factors, along with the previous and subsequent 

hurricanes, strained inspection resources, tested program controls, and made 

the IHP more susceptible to fraud, waste, and abuse. 

In addition to the hurricanes that affected Florida in 2004, FEMA had to 

respond to and assist victims of other major disasters during the year. FEMA 

indicated that during the Florida disasters, its Recovery Division was 

simultaneously delivering aid to individuals and households in 15 states and 

Page 4 
two territories. According to FEMA, the upsurge of disaster activity during 

the year proved well above its standing operational capabilities necessitating 

the hiring and training of additional staff and contract personnel. A more 

detailed description of FEMA’s disaster efforts for 2004 can be found in 

Appendix H, FEMA’s response to our draft audit report. 

Hurricane Charley, declared on August 13, 2004, made landfall as a Category 

IV1

 storm hitting the southwestern part of Florida and crossing the state in a 

northeastern direction. Frances, a Category II hurricane, declared on 

September 4, 2004, struck central Florida from the Atlantic Ocean and 

proceeded in a northwesterly direction. Declared on September 13, 2004, 

Ivan, a Category III hurricane, impacted the state’s western edge, and 

Hurricane Jeanne, declared on September 26, 2004, also a Category III storm, 

followed a path similar to Hurricane Frances. 

The combined damage caused by those hurricanes affected, in varying 

degrees, most if not all counties in the state. As a result, the President 

declared all four hurricanes major disasters under the Robert T. Stafford 

Disaster Relief and Emergency Assistance Act (Stafford Act), Public Law 93-

288, as amended. The designation of a major disaster by the President 

authorizes FEMA to provide federal assistance to designated counties in a 

declared state. As of March 4, 2005, FEMA had approved approximately 

$1.13 billion in disaster funding to individual applicants and households 

affected by the four hurricanes in Florida. Nearly $31 million of this amount 

was awarded to individuals and households in Miami-Dade County as a result 

of Hurricane Frances. FEMA received 19,236 applications for IHP assistance: 

12,868 approved, 5,616 disapproved, 728 withdrawn, and 24 pending. 

In addition to the nearly $31 million awarded under the IHP in Miami-Dade 

County, FEMA awarded $182,586 to cover emergency protective measures 

and debris removal. Also, the U.S. Small Business Administration (SBA) 

approved 126 loans valued at $1.3 million to individuals and businesses in 

Miami-Dade County, and insurance companies approved about $43.5 million 

in payments in Miami-Dade County for insurance claims made as a result of 

Hurricane Frances. 

The IHP provides financial and direct assistance to eligible individuals and 

households who have uninsured expenses or needs and are unable to meet 

those expenses or needs through other means. For Hurricane Frances, the 

1

 See Appendix A for a description of the Saffir-Simpson Hurricane Scale that rates a hurricane’s intensity. 

Page 5 

 
maximum amount of IHP assistance an individual or household could receive 

was $25,600.2

 

The IHP has two major components: Housing Assistance and Other Needs 

Assistance (ONA). As of February 28, 2005, residents of Miami-Dade 

County received approximately $13 million under the Housing Assistance 

component for temporary rental assistance, home repairs, and home 

replacement. Under the ONA component, a cost-shared partnership between 

FEMA and the State, applicants received approximately $18 million for 

personal property items and funeral and medical expenses.3

 States may 

choose to administer IHP’s ONA provision or to have FEMA administer the 

program.4

 For Hurricane Frances, Florida elected to have FEMA administer 

the program. Though Florida chose not to administer ONA, it retained 

influence over the program by determining which household items would be 

eligible for reimbursement, recommended pricing for automobile repair and 

replacement, as well as award levels for funeral assistance. 

 

FEMA’s Headquarters Recovery Division is responsible for developing 

policies, regulations, and guidance governing the IHP. FEMA used contract 

inspectors to verify personal and real property losses and damages of 

individuals and households and its own staff to verify reported disaster-related 

deaths and medical and dental needs. FEMA’s Inspections Services Branch in 

Berryville, Virginia, oversees the contract for inspectors. These contract 

inspectors visit applicants’ homes to verify disaster-related damages to real 

and personal property. Inspectors upload their findings to FEMA’s processing 

system, the National Emergency Management Information System (NEMIS) 

that can reportedly determine eligibility in over 90 percent of cases based 

upon a series of business rules coded in its software. FEMA caseworkers 

process cases that cannot be automatically processed, determining an 

applicant’s eligibility for disaster assistance. 

Purpose, Scope, and Methodology 

Our audit addressed the Presidential disaster declaration for Hurricane Frances 

that was amended to include Miami-Dade County as eligible for the full 

complement of FEMA’s Individual Assistance programs, including the IHP. 

2

 The maximum grant amount is adjusted annually to reflect changes in the Consumer Price Index. See 68 Federal 

Register 59413 (October 15, 2003). 

3

 Under the ONA component of the IHP, a State must provide a 25% match. 4

 44 Code of Federal Regulations 206.120 

Page 6 

 
The purpose of our audit was to determine whether FEMA had sufficient 

evidence to justify including Miami-Dade County among the counties eligible 

for IHP assistance, and whether adequate program controls existed to ensure 

that funds were provided only to eligible applicants, for eligible expenses. 

Based on the provisions of Title 44 of the Code of Federal Regulations (CFR), 

along with related FEMA policy and guidance, we evaluated the basis for 

FEMA’s controls over and funding decisions reached in each major 

expenditure category. We tested the appropriateness of awards totaling 

$936,979, or 3 percent of the nearly $31 million awarded under the IHP to 

Miami-Dade County residents (see Appendix B). 

We conducted site visits and interviewed FEMA officials in Washington, DC, 

the National Processing Service Center in Berryville, Virginia, and at the 

Hurricane Frances Disaster Field Office in Orlando, Florida; and FEMA 

contractors located in Falls Church and Herndon, Virginia, and in Los 

Angeles, California. These contractors were responsible for inspecting and 

verifying losses sustained by disaster applicants and for developing prices for 

replacing or repairing items that may have been damaged, lost, or destroyed as 

a result of the disaster. In addition, we interviewed officials from the National 

Oceanic and Atmospheric Administration’s National Weather Service. 

The audit covered the period September 4, 2004, to February 28, 2005. In an 

effort to make the audit as current as possible, certain activities were reviewed 

through March 7, 2005. 

We performed the audit between January and March 2005, under the authority 

of the Inspector General Act of 1978, as amended, and according to generally 

accepted government auditing standards. We did not, however, evaluate the 

controls in NEMIS or the validity and reliability of its data. Such an 

evaluation would have required extensive planning and testing of NEMIS’ 

application controls, and would have significantly delayed completion of our 

fieldwork. Moreover, if performed, the results of the evaluation would not 

have had a significant impact on the findings presented in this report because 

we found a need for improved procedures and controls based on substantive 

tests of specific cases from NEMIS and we did not project our findings to any 

larger universe of files within NEMIS. 

Consistent with government auditing standards, our audit procedures provided 

due diligence to situations involving potential fraud. Our efforts in this area, 

however, were not to pursue fraud matters to legal resolution or to project the 

extent of fraud. All matters involving fraud are referred to the OIG’s Office 

of Investigations where such matters are pursued in coordination with the 

Page 7 
appropriate U.S. Attorney’s Office. As of March 2, 2005, the OIG’s Office of 

Investigations, working with the U.S. Attorney’s Office for the Southern 

District of Florida, arrested 14 individuals for making false claims. Other 

investigations are ongoing. 

Results of Audit 

Amendment to the Major Disaster Declaration 

FEMA designated Miami-Dade County eligible for Individual Assistance 

programs, which included the IHP, without a documented assessment of 

damages or analyses of the impact Hurricane Frances had on the area. As a 

result, individuals and households, not severely affected by the hurricane, 

were eligible to apply for assistance. This situation, along with the previous 

and subsequent hurricanes, strained FEMA’s inspection resources, tested 

program controls, and made the IHP more susceptible to potential fraud, 

waste, and abuse. 

Prior to presenting a request for a major disaster declaration to the President, 

FEMA has established procedures to perform Preliminary Damage 

Assessments (PDAs) in coordination with State and local officials. PDAs are 

conducted 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. These assessments are used as a basis for the State’s Governor to 

prepare a request for Federal assistance and by FEMA to document the 

recommendation made to the President in response to a Governor’s request. 

While FEMA typically conducts PDAs prior to providing its recommendation 

to the President on whether a major disaster declaration under the Stafford Act 

is warranted, Federal regulation 5

 allows Governors to make expedited 

requests without a PDA for catastrophes of unusual severity and magnitude. 

However, in the case of Miami-Dade, the President’s declaration specified 

that additional assistance would be subject to a PDA. Further, even in cases 

where PDAs are not necessary, federal regulation6

 requires FEMA to later 

assemble and document an estimate of the amount and severity of damages 

and losses. Additionally, Federal regulation7

 requires that requests for 

5

 44 CFR 206.33(d) 

6

 44 CFR 206.36(d) 

7

 44 CFR 206.40(c) 

Page 8 

 
additional designations after a declaration be accompanied by appropriate 

verified assessments and commitments by State and local governments. 

Governor’s Request

In anticipation of the impact of Hurricane Frances, Florida’s Governor 

submitted a disaster declaration request on September 2, 2004, to FEMA’s 

Region IV requesting that all 67 counties in the state be declared eligible for 

Public Assistance and that 18 counties8

 be declared eligible for the full 

complement of Individual Assistance programs, including the IHP. The 

request was made one day prior to Frances making landfall and was based on 

predictions by the National Hurricane Center that those counties were likely to 

experience substantial damage from storm surge and hurricane force winds. 

Recommendation of FEMA’s Region IV and the Under Secretary

On September 2, 2004, using information contained in the Governor’s request, 

FEMA’s Region IV made a recommendation to FEMA Headquarters on the 

degree to which assistance should be provided. On September 3, 2004, the 

Emergency Preparedness and Response (EP&R) Under Secretary made his 

recommendation to the President on the degree to which assistance should be 

provided. 

Presidential Declaration

On September 4, 2004, the President declared a major disaster, specifying that 

Public Assistance (Categories A and B only) be made available to all counties 

and Individual Assistance to five counties (Brevard, Indian River, Martin, 

Palm Beach, and St. Lucie). The Presidential declaration also authorized 

FEMA to provide assistance beyond the designated area “...subject to 

completion of Preliminary Damage Assessments.”9

 

FEMA’s Amendment

Effective September 5, 2004, FEMA amended the declaration to make 

Individual Assistance available to residents of Miami-Dade County and the 

other 12 counties that were initially requested by the Governor, but excluded 

in the President’s declaration. According to a typed document in FEMA’s 

declaration file, FEMA’s Recovery Division Director in Headquarters made 

8

 Brevard, Broward, Citrus, Glades, Hernando, Highlands, Indian River, Lake, Martin, Miami-Dade, Okeechobee, 

Orange, Osceola, Palm Beach, Pasco, Polk, St. Lucie, and Sumter counties. 9

 See Appendix B for the President’s declaration. 

Page 9 

 
the decision to add those counties “Based on the path of Hurricane Frances as 

it made landfall on September 5, 2004.” However, the file contained no 

evidence of a preliminary damage assessment as specified in the President’s 

September 4, 2004, declaration. 

According to available records, both the Governor’s request and FEMA’s 

decision to provide Individual Assistance in Miami-Dade County and the 

other counties were based on the anticipated path of the hurricane and 

projected damages. However, according to the National Oceanic and 

Atmospheric Administration’s National Weather Service, Miami-Dade 

County did not incur any hurricane force winds, tornados, or other adverse 

weather conditions that would cause widespread damage. Weather data 

indicated that the strongest sustained winds were 47 miles per hour (mph), 

which is considered by the National Weather Services to be tropical storm 

force winds.10 The strongest peak gusts of winds were 59 mph. Additionally, 

the highest recorded accumulation of rainfall between September 3 and 5, 

2004, was 3.77 inches in North Miami Beach. No substantial rainfall 

accumulation occurred, and the National Weather Service did not report any 

flooding for Miami-Dade County during this timeframe. 

Although Hurricane Frances did not affect Miami-Dade County as predicted, 

local residents obviously sustained some degree of damage. According to 

FEMA officials, the affected areas in Miami-Dade County were 

predominately low-income neighborhoods that contained some of the State’s 

oldest housing stock. These dwellings were not built to more recent State and 

local building codes established after Hurricane Andrew, which may have 

made them more susceptible to greater damages from Frances. 

In addition, as of March 3, 2005, the Florida Office of Insurance Regulation 

reported 11,807 property claims and payments of $43.5 million in MiamiDade County as a result of Hurricane Frances. The type of property damage 

was not available, but the office reported that structural real property damage 

accounted for 92% of the payments statewide. Also, as of March 7, 2005, the 

U.S. Small Business Administration (SBA) had approved 126 loans totaling 

$1.3 million for home damages.11 

Nevertheless, such damages did not necessarily warrant federal assistance. 

Assessing damage is a critical function and component in determining 

whether an area should be included within a major disaster declaration. It 

serves to document the extent, type, and location of damages and whether the 

10A Category I Hurricane has winds of 74 to 95 mph— Tropical Storm have winds ranging from 39-73 mph. 

11 The SBA may make loans available without a Presidential disaster declaration. 

Page 10 

 
costs of repairs are beyond the capability of State and local governments to 

warrant federal assistance. In the absence of such a damage assessment, the 

inclusion of Miami-Dade County in the amended declaration was 

questionable. By including the county in the declaration, millions of 

individuals and households became eligible to apply for the IHP, straining 

FEMA’s limited inspection resources to verify damages and making the 

program more susceptible to potential fraud, waste, and abuse. 

Recommendations 

We recommend that the Director of FEMA’s Recovery Division: 

1. Ensure that, for future declarations, preliminary damage assessments are 

performed to determine and document the type, extent, and location of 

disaster related damages whenever possible. 

2. Develop clearer guidance defining circumstances where complete PDAs 

may be unnecessary or infeasible. 

FEMA’s Comments and OIG Analysis 

FEMA disagreed that damage assessments were required to be performed to 

document the extent, type, and location of damages prior to designating 

Miami-Dade County. FEMA stated 

“There was no statutory or regulatory mandate to perform detailed 

PDA’s prior to designating Miami-Dade County, or any of the other 

12 counties added at the same time. FEMA’s regulations allow for 

the PDA to be skipped in situations where the event is of such 

unusual severity and magnitude that it does not require field 

assessments to determine the need for Federal assistance.” 

However, the President’s Declaration, together with other supporting 

documentation12, reflects a clear intention that a PDA would be conducted 

prior to adding additional areas. 

FEMA also stated “The OIG’s decision to unilaterally disregard the damageconfirming findings of thousands of inspections is inexplicable, and detracts 

from the credibility of the audit process.” Our report acknowledges that 

12 The audit workpapers include documentation which has not been discussed in the report due to FEMA's assertion that 

the substance is protected by privilege. 

Page 11 

 
considerable damage was incurred in Miami-Dade County. Our point is that 

such damages do not necessarily warrant federal assistance. 

Finally, FEMA contends that OIG has advocated that assistance should have 

been delayed pending completion of comprehensive door-to-door damage 

assessments. While we believe that a PDA was necessary to support a 

declaration for Miami-Dade, we never suggested that a door-to-door 

assessment of damages was needed as part of that assessment. 

Verification of IHP Disaster Losses for Other Needs Assistance 

As of February 28, 2005, FEMA provided $18 million in ONA to MiamiDade County individuals and households in response to Hurricane Frances. 

Program controls for the administration of the ONA need to be tightened and 

accompanied by additional guidelines and criteria to enhance FEMA’s overall 

effectiveness in addressing the disaster-related needs of applicants. 

Unlike IHP’s 100 percent federally funded and administered Housing 

Assistance, ONA is 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 ONA will be administered in any Presidentially 

declared disaster in the coming year. As part of this preplanning, the State 

establishes ONA award levels related to vehicle repairs, vehicle replacement, 

and funeral grants. 

Specifically, improved controls are needed to ensure that assistance provided 

for the repair and replacement of household room items, and some personal 

property damages or losses are disaster-related; and that funding decisions 

based on verbal representations, the replacement and repair of automobiles, 

and funeral expenses are sustainable. 

Repairing and Replacing Household Room Items Should be More Closely 

Aligned to Actual Losses

FEMA awarded $10.2 million to repair or replace household room items for 

Miami-Dade County residents under the ONA component of the IHP. 

However, the procedures used by FEMA to award funds for those items does 

not limit assistance to only disaster-related losses as required by Federal law 

and regulations. 

Page 12 
Section 408 of the Stafford Act authorizes FEMA to provide assistance to 

individuals and households 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, such as loans from the SBA. 

For the purpose of funding grants under this section, Federal regulation13

defines “necessary expenses” as the costs associated with items or services to 

meet a serious need. The regulation defines a serious need as “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.” 

Consistent with the regulation, a disaster-related hardship, injury, or adverse 

condition must be supported by a disaster-related loss and to qualify for ONA, 

the need for assistance cannot be met through other means. However, the 

procedure used by FEMA to replace household room items allowed for 

funding of all items in what FEMA constituted as a full room,14 regardless of 

the actual loss. 

In assessing the replacement of room items, FEMA required its contract 

inspectors to verify and document the applicant’s loss generically by room 

rather than by specific items damaged or lost. Inspectors were also instructed 

to summarize a room’s damage by using one of the three categories, which 

formed the basis for the ONA award. 

• X = damaged, but repairable or cleanable. When an “X” was assigned, the 

applicant received a designated percentage of the value of a full room. 

• Y = damaged, some items repairable, some should be replaced. When a 

“Y” was assigned, the applicant received a larger percentage of the value 

of a full room. 

• Z = damaged, replace all items. When a “Z” was assigned, the applicant 

received the largest percentage of the value of a full room. 

FEMA applied the X, Y, and Z procedure to four areas of a residence: 

kitchen, living room, bedroom, and bathroom. FEMA also determined the 

items that constituted a full room and the items ranged from 9 for a living 

room to 25 for a kitchen.15 The price for a category Z room ranged from $862 

for a bathroom to $2,495 for a bedroom. The above procedure may permit 

13 44 CFR 206.111 

14 See Appendix C for room items that may be funded under the ONA component of the IHP. 

15 Items such as televisions, refrigerators, stoves, and other appliances are not included as room items under the X, Y, 

and Z procedure. 

Page 13 

 
funding to repair or replace items not damaged or destroyed by a major 

disaster and is, therefore, inconsistent with the Stafford Act and is potentially 

wasteful.16 

Both FEMA and contract inspection officials acknowledged that the generic 

room concept resulted in applicants receiving funds for items they did not 

have at the time of the disaster. Moreover, although some inspectors 

voluntarily noted in their reports that individuals and households did not have 

items included in the FEMA constituted rooms, funding for such items was 

still provided to applicants. Even though some inspectors questioned this 

procedure, they had no alternative other than to follow FEMA’s established 

policy. 

Under current procedures, contract inspectors must inspect an applicant’s 

residence to verify damages, losses, and disaster-related needs. Rather than 

treating a room in the aggregate, inspectors should be able to document, with 

minimal effort, the actual items, particularly large and more expensive items 

e.g., bed and chest, damaged as a result of the disaster and support more fully 

an applicant’s eligible disaster-related needs. This additional effort would 

produce significant savings and more closely align the ONA component of the 

IHP with the Stafford Act. 

Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

3. Modify FEMA’s inspection procedures to identify more accurately 

disaster-related losses of household items for which applicants should be 

compensated. 

FEMA’s Comments and OIG Analysis 

FEMA agreed with our recommendation and said that it is reviewing the use 

of the generic room concept. FEMA believes that, with today’s technology, it 

can increase the specificity of the inspection without substantially increasing 

the time required to complete an inspection. 

16 In an audit performed by the OIG for FEMA, Review of Selected Disaster Relief Program Activities Related to 

Hurricane Hugo-Puerto Rico and the U.S. Virgin Islands, Report Number H-09-01, March 1991, FEMA OIG made the 

same observation about the X, Y, and Z procedure. 

Page 14 

 
Based on FEMA’s comments, we consider the recommendation resolved. The 

recommendation can be closed once FEMA completes its analysis and 

implements changes to current procedures. 

Verification of Personal Property Losses Using Verbal Representations

FEMA awarded $720,403 to 228 applicants for personal property items based 

upon the applicants’ verbal representations of their losses. In situations where 

personal property items have been discarded because they may present a 

health or safety hazard, or are otherwise unavailable for physical inspection, 

FEMA guidelines17 permit inspectors to record disaster-related losses if the 

item lost can be reasonably verified through other means.18 In those cases, 

inspectors are required to document the applicant’s file with the comment “PP 

Verbal.” However, the guidelines do not require inspectors to document the 

specific items that were not available for inspection, the verbal representations 

made, or the evidence used to verify the loss. Moreover, our review of 27 “PP 

Verbal” files disclosed that this information was not documented. In those 

cases, the appropriateness of FEMA’s funding decisions cannot be verified.19 

Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

4. Modify the IHP Inspection Guidelines to require inspectors to specify in 

the “PP Verbal” file the specific item(s) that was not available for 

inspection, the verbal representations made, and the evidence used to 

verify the loss. 

FEMA’s Comments and OIG Analysis 

FEMA agreed that documentation of items discarded could be improved and 

said it will research alternative approaches to augment documentation of “PP 

verbal” items. 

17 IHP Inspection Guidelines, DR-1545-FL, Revised August 6, 2004. 

18 The decision to approve funding for IHP assistance is made by FEMA Individual Assistance programs staff based 

upon recommendations made by FEMA contract inspectors as a result of information they obtained during inspections. 

19 Two applicants who received assistance based on “PP Verbal” were among the 14 individuals indicted by the U.S. 

Attorney for filing false claims with FEMA. 

Page 15 

 
Based on FEMA’s comments, we consider the finding resolved. The finding 

can be closed once FEMA completes the planned research and implements 

changes to current procedures. 

Guidance Needed for Authorizing Assistance to Replace or Repair 

Automobiles

Contract inspectors were not required to validate how damages to automobiles 

were disaster-related. Additionally, for the approvals we reviewed, the 

amount authorized for automobile replacement, particularly for older vehicles, 

in our opinion, was generally far in excess of the market replacement costs or 

an amount needed to acquire comparable transportation. 

Funding for automobile repairs and replacement was based upon award 

amounts established by the State during annual ONA pre-planning and 

approved by FEMA staff. The guidelines20 FEMA developed contain general 

conditions of eligibility for automobile repair and replacement assistance. 

According to the guide, the automobile must be properly registered and 

comply with State laws regarding liability insurance, and the applicants must 

not be able to meet their needs through other sources, such as comprehensive 

insurance. Also, verification of needs must be performed by a contract 

inspector on site or by a licensed mechanic. 

The FEMA guidelines indicate that inspectors are to record only disaster 

damages. The guide, however, does not require the inspector or mechanic to 

document the type of damages sustained, or how the disaster caused the 

damages, a condition that must be met to be eligible for IHP assistance. 

We reviewed 21 of the 771 approvals made for automobile replacements and 

repairs. Those approvals, 18 for automobile replacement at $6,500 each and 3 

for repairs totaling $6,878, resulted in ONA payments of $123,878. Case files 

for 13 replacement approvals did not have any documentation or explanations 

to indicate the type of damage sustained or to establish a relationship between 

the damage and the disaster. The file simply noted that the automobiles were 

destroyed. 

Contract inspectors, and in one case a mechanic, did provide an explanation 

for their recommended approval of automobile replacement in the remaining 

five cases. The files indicated that two automobiles were destroyed by 

floodwaters, two by water in the motor, and one by an electrical fire. 

20 Other Needs Assistance Reference Guide, dated September 24, 2004. 

Page 16 

 
However, the contract inspectors and mechanic did not document the basis for 

their conclusions, e.g., diagnostic analysis or evidence of a high water level. 

In addition, the National Weather Service had no reports of flooding in the 

area where the four recipients lived—Opa-Locka, Homestead, and Miami. In 

regard to the automobile with the electric fire, the inspector provided no 

explanation of how the hurricane may have contributed to the fire. 

In accordance with the State’s established replacement value for eligible 

disaster-damaged vehicles, FEMA and the State provided $6,500 for each 

automobile destroyed. For 15 of the automobiles, the retail “blue book” value 

totaled $56,140; however, FEMA and the State awarded $97,500 for those 

automobiles21. In our opinion, FEMA should consider working with the 

States to establish a more reasonable replacement value for destroyed 

automobiles. 

We also question the decisions to fund automobile repair costs of $6,878 for 

three applicants. The first applicant received $3,416 based on an estimate 

obtained from a mechanic to replace an engine, thermostat, coolant, oil, and 

filter. However, the mechanic’s estimate stated that the repairs were based 

upon what the customer told the service advisor to repair and not upon the 

mechanic’s assessment of needs. The other two applicants received $3,462 

based entirely on estimates for replacing upholstery and brakes. Information 

contained in the FEMA inspection files did not indicate how the disaster 

necessitated a need for the repairs. 

Recommendations 

We recommend that the Director of FEMA’s Recovery Division: 

5. Develop eligibility criteria for funding automobile damage that can be tied 

to damages sustained as a result of a disaster; 

6. Modify guidelines to require contract inspectors to document verified 

automobile damages to allow FEMA to justify awards based on disasterrelated needs; and 

7. Work with the States to establish a more reasonable replacement value for 

destroyed automobiles based on the cost to acquire a comparable vehicle. 

 

21 See Appendix D for FEMA awards and related blue book values for automobile replacements in Miami-Dade County. 

Page 17 

 
 FEMA’s Comments and OIG Analysis 

FEMA agreed with our finding regarding a need for improved criteria and 

documentation for automobile repairs and replacement. FEMA said that steps 

have already been initiated to address these issues in future software upgrades. 

Based on these comments, we consider recommendations 5 and 6 resolved. 

The recommendations can be closed once FEMA completes the planned 

actions. 

Recommendation 7, however, is unresolved. FEMA said that the purpose for 

providing transportation assistance is not to reimburse applicants for the blue 

book value of their automobiles, but to provide them with the means to obtain 

necessary replacement transportation. FEMA also indicated that states differ 

widely on the appropriate amount to be awarded to their citizens for 

replacement of automobiles and since a consensus has never been reached on 

this matter, assistance levels are established with states during annual ONA 

preplanning sessions. 

We acknowledge FEMA’s concerns with using blue book value to provide 

automobile replacement assistance as such a value, particularly for older 

automobiles, may not always be sufficient for an applicant to acquire 

replacement transportation. Accordingly, we have deleted any reference to 

market value in the recommendation. On the other hand, older vehicles can 

generally be replaced with a comparable vehicle for less than the $6,500 

replacement threshold established in Florida or the $6,183 nationwide 

average. Therefore, we believe FEMA should work with the states to 

establish more realistic replacement values. 

Eligibility Criteria to Determine When to Pay for Funeral Expenses Need 

Refinement

Unlike other classes of ONA that are well-suited for rapid processing through 

FEMA’s automated system, funeral cases are manually processed and 

coordinated among Regional office officials, NPSC caseworkers, State 

officials, and victims’ families. In Miami-Dade, FEMA caseworkers 

authorized payments of $15,743 for three funerals, which we concluded were 

insufficiently documented to establish the deaths as disaster-related. This 

occurred because FEMA did not have criteria for determining whether deaths 

are disaster-related and eligible for funding. 

Page 18 
Federal regulation22 authorizes FEMA to provide financial assistance for 

funeral items or services to meet the disaster-related necessary expenses and 

serious needs of individuals and households. Those expenses are generally 

limited to the cost of funeral services, burial or cremation, and other related 

funeral expenses. However, to be eligible for funeral assistance, the death 

must be a “direct result” of the disaster.23 

The ONA guide specifies sources to use when determining whether the loss of 

life was disaster-related, e.g., hospitals, police and fire departments, coroner 

offices, and the local media reports. However, the guide does not provide any 

criteria or examples of circumstances that would constitute a “disasterrelated” death eligible for FEMA funding. Additionally, in the case of the 

three funerals funded in Miami-Dade, documentation did not demonstrate that 

the deaths were a direct result of the disaster. 

Death from Heart Attack. FEMA awarded $7,500 to cover the funeral of a 

man who had died of a “critical coronary atherosclerosis,” or heart attack. 

Documents in FEMA files indicate that the man was found dead at his 

residence after Hurricane Frances impacted Florida. The Medical Examiner 

reported that the victim died of natural causes. However, FEMA staff 

administering the ONA concluded that his death was disaster-related. 

FEMA files contained a note from a physician who treated the deceased for 

hypertension, gout, and arthritis. According to the physician’s note, the 

deceased’s hypertension might have been exacerbated from the stress of the 

recent hurricane. However, in our opinion, this statement in itself does not 

support the conclusion that the death was disaster-related and, therefore, 

eligible for FEMA funding. 

Death from Automobile Accident. FEMA awarded $3,743 to cover funeral 

expenses of a resident killed while driving. According to the Florida Traffic 

Crash Report, the victim lost control of his vehicle, crossed over several lanes, 

and the vehicle landed on its roof inside a canal. 

The report identified one contributing cause of the accident—the victim 

exceeded the State speed limit. The report also identified wet and rainy 

conditions, but made no mention of Hurricane Frances, which passed through 

the area before the accident. Months after the incident, FEMA staff received a 

memorandum from the police official that investigated the accident. 

According to the memorandum, “...the weather condition during Hurricane 

22 44 CFR 206.119 

23 Other Needs Assistance Reference Guide, dated September 24, 2004, page 36. 

Page 19 

 
Frances and wet roadways could have contributed to...[the victim]...losing 

control of his vehicle....” Again, while the death cannot be established as a 

“direct result” of the disaster, caseworkers authorized the funeral award based 

upon the police official’s statement. In our opinion, FEMA officials did not 

have sufficient evidence to conclude that the victim’s death was disasterrelated. 

Death from Drowning. FEMA paid $4,500 for funeral expenses of a victim 

who drowned in a pool. According to documentation in the FEMA file, the 

morning after the victim was reported missing and after searches by neighbors 

and police, the victim was found deceased in a pool. The Medical Examiner 

concluded that the death was accidental, without noting any circumstances 

that would indicate that the death was disaster-related. FEMA officials 

concluded that the death might have been caused by the disaster. Again, in 

our opinion, FEMA officials did not have sufficient evidence to conclude that 

the victim’s death was disaster-related. 

The Miami-Dade and Broward County Medical Examiners advised us that 

their investigation of deaths during Hurricane Frances disclosed that none 

were disaster-related. However, in contrast, the Miami-Dade Medical 

Examiner determined that, during Hurricane Andrew in 1992, 15 deaths were 

a direct result of the hurricane and another 15 natural deaths were indirectly 

related to the storm. The results of the Medical Examiner’s investigation were 

published in May 1997.24 This publication reflected deaths directly related to 

the storm resulting from collapsed homes and roofs, caved in walls, and 

falling debris. The report also reflected the nature of indirect deaths— 

cardiovascular related—many occurring after the storm. 

The publication contained a table reflecting the circumstances of direct and 

indirect deaths that FEMA could use to develop eligibility criteria for funeral 

expenses. Under current FEMA guidelines, only funerals from deaths that are 

a direct result of a disaster can be funded. 

FEMA staff at the Disaster Field Office reviewed information on each death 

and approved the assistance. However, the files contained insufficient 

documentation to support the basis for approval. 

24 “Mortality from Hurricane Andrew” published in the Journal of Forensic Science, May 1997. 

Page 20 

 
Recommendations 

We recommend that the Director of FEMA’s Recovery Division: 

 8. Develop criteria and guidelines for determining “disaster-related deaths.” 

 9. Require staff to document their analysis of each request for funeral 

expense assistance in order to support approval or disapproval of such 

assistance. 

FEMA’s Comments and OIG Analysis 

FEMA said that variations in State medical examiner and coroner procedures 

have prevented them and the states from establishing national policy on 

disaster related deaths, but its guidelines were specific about sources to be 

checked to validate disaster-related deaths. FEMA also said that funeral 

grants represent a very small percentage of ONA applications and that the 

effectiveness of controls in place was evidenced by the fact that it denied 70 

percent of funeral related requests during the 2004 Florida hurricane season. 

However, FEMA said that it would continue to research ways to improve its 

eligibility determination process, as well as improve the quality of applicants’ 

case file documentation. Although FEMA indicated an intent to address the 

issues, it did not describe specific actions. Therefore, we consider the 

recommendations unresolved until FEMA develops and implements an action 

plan. 

Need for Disaster-Related Miscellaneous Items Could be Better Verified 

FEMA awarded $192,592 for miscellaneous items to applicants in MiamiDade County based only upon the verification that such items were 

purchased—not whether a disaster-related need existed. 

Federal regulation25 allows for funding of items that are not specified in other 

ONA categories that are unique disaster-related necessary expenses and 

serious needs of individuals and households. For Hurricane Frances, the 

State, with FEMA’s approval, identified six unique items for funding: a 

generator, heating fuel, a wet/dry vacuum, an air purifier, a chainsaw, and a 

dehumidifier. 

25 44 CFR 206.119 

Page 21 

 
FEMA’s guidelines26 provide that assistance for miscellaneous items will be 

awarded based upon site inspection verification or submitted documentation. 

The guidelines require the miscellaneous items to be: (1) purchased or rented 

after the incident starting date; (2) purchased or rented within 30 days after the 

incident starting date; and (3) used in overcoming the affects of the disaster. 

FEMA caseworkers used these guidelines. 

For Hurricane Frances, FEMA used the on site inspection process to verify 

that applicants purchased items during the time of the disaster. FEMA 

Inspections Services Branch officials said contract inspectors followed 

procedures in the IHP Inspection Guidelines. However, those guidelines do 

not contain the requirement that items must be used to overcome the affects of 

the disaster. Thus, the inspection process was limited to verifying that 

applicants only acquired the items within specified timeframes. 

We reviewed the files of three applicants who received $836 each as 

reimbursement for acquiring a generator. Although not documented in 

FEMA’s grant file, one could reasonably conclude that the generators were 

needed to provide power to their primary residences. However, the applicants 

received rental assistance from FEMA to reside somewhere other than their 

primary residence as well as being reimbursed for the generators. Without 

properly validating and documenting an applicant’s need for miscellaneous 

items, FEMA is reimbursing applicants for items that may not have been 

acquired in support of a disaster-related need. 

Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

10. Modify inspection guidelines to require contract inspectors to justify that 

funding recommendations for miscellaneous items are based upon 

disaster-related needs. 

FEMA’s Comments and OIG Analysis 

FEMA agreed with the recommendation and said that it had implemented in 

September 2004 a new policy for funding miscellaneous items. The new 

policy requires that items be purchased within a specific timeframe following 

a disaster declaration, meet a verified need, and be based on FEMA’s 

standardized pricing system. FEMA also said that it and its state partners 

would continue to review and improve the related inspection procedures. 

26 Other Needs Assistance Reference Guide, dated September 24, 2004, page 39. 

Page 22 

 
The guidelines FEMA referred to in its comments were used by FEMA 

caseworkers, not the contract inspectors. For Hurricane Frances, contract 

inspectors made on-site visits to inspect miscellaneous items and used IHP 

Inspection Guidelines. On these visits, the inspectors verified that applicants 

bought the miscellaneous items, not whether the items were acquired to meet 

a disaster related need. This was not required by the IHP guidelines. 

We consider this recommendation resolved. It can be closed once FEMA 

modifies its guidelines for contract inspectors to require a determination of a 

disaster-related need in line with its September 2004 guidance for 

caseworkers. 

Verification of IHP Disaster Losses for Housing Assistance 

As of February 28, 2005, FEMA awarded $13.1 million to Miami-Dade 

applicants for rental assistance and home repair and replacement. However, 

the implementation of the Housing Assistance component of the IHP was 

hampered by several procedural omissions and generally weak guidelines for 

performing inspections and documenting results. 

Expedited Rental Assistance Not Provided Based on Need

FEMA implemented a rarely used procedure within the Housing Assistance 

component of the IHP called Expedited Assistance (EA), and awarded 

approximately $1 million to 1,431 Miami-Dade residents. Under EA, 

applicants were provided a one-time monthly rental assistance payment of 

$726. Unlike for other rental assistance applicants, on site inspections to 

verify needs were not performed in advance of EA. To qualify, according to 

FEMA instructions,27 applicants had to meet certain criteria during 

registration. 

FEMA provided $82,764 in EA to 114 applicants who were not, or may not 

have been eligible. Those applicants reportedly had insurance, did not report 

a need for housing, or reported that their homes were not damaged. 

Sixty-four applicants, who received $46,464 of Expedited Assistance, had 

homeowners insurance that generally covers temporary housing assistance in 

the event their homes are damaged and declared unsafe. Federal regulation28

27 A memorandum, dated September 6, 2004, from the National Processing Service Center Coordination Team to Benefit 

Processing Staff. 

28 44 CFR 206.110(a) and (h) 

Page 23 

 
prohibits FEMA from funding applicants who are able to meet their needs 

through other means and prohibits duplication of benefits. For those 

applicants with insurance coverage, according to Federal regulation29

temporary housing assistance shall be provided only when payment of 

insurance benefits have been significantly delayed, benefits are not sufficient 

to cover housing needs, or when housing is not available in the private market. 

However, documentation was not available to show that any of these 

conditions existed to justify EA payments to the insured applicants in MiamiDade County. 

FEMA instructed the recipients of EA to file claims with their insurance 

companies and report back to FEMA on any unmet needs within twelve 

months. However, five months after the disaster was declared, none of the 

recipients had reported back to FEMA. In addition, FEMA had no procedures 

to identify those recipients who were fully compensated by their insurance 

company for rental costs and were not eligible for FEMA assistance. 

Twenty-six applicants, who received $18,876 of EA, reported that they did not 

meet the criteria for such assistance. However, during registration, FEMA 

erroneously recorded in the applicant files that they were eligible. While 

caused by a system error that was subsequently corrected, those applicants 

were not eligible for EA and should not have received funding. 

Finally, 24 applicants reported that their homes were not damaged. Those 

applicants received assistance, totaling $17,424, because the EA criteria did 

not require damage to their primary residence as a condition for eligibility. 

FEMA amended the EA criteria to require damage to an applicant’s primary 

residence as a condition for receiving EA under the Hurricane Ivan 

declaration. 

Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

11. Recoup the $36,300 paid to individuals who did not report a need for 

rental assistance or damage to their home. 

FEMA’s Comments and OIG Analysis 

FEMA agreed to review all 114 cases of applicants who were not, or may not 

have been, eligible for assistance and initiate recoupment action, as 

29 44 CFR 206.101 (d) 

Page 24 

 
appropriate. Based on FEMA’s comments, we consider the recommendation 

resolved. The recommendation can be closed once FEMA completes its 

review and recoupment actions. 

Controls Over Rental Assistance Eligibility Need Improvement

In our opinion, sufficient criteria were not in place to reasonably assure that 

the $9 million of rental assistance provided to 4,985 Miami-Dade County 

residents was made to eligible applicants. To prevent this from occurring 

under future disaster declarations, FEMA needs to improve its guidelines for 

performing inspections, documenting the basis for unsafe home 

determinations, and recognizing deferred maintenance conditions. 

According to Federal regulation30 rental assistance may be provided only 

when an applicant’s primary residence has been made unlivable or the 

applicant has been displaced as a result of the disaster. 

During home inspections, contract inspectors are required to verify the 

primary residence of an applicant, determine whether damages to the 

applicant’s primary residence were caused by the disaster, and determine 

whether the disaster made the applicant’s home unsafe. FEMA, however, did 

not require the inspectors to document, in sufficient detail, the basis for their 

unsafe determinations. 

For example, we found that 4,308 applicants who received rental assistance 

did not indicate a need for shelter at the time of registration or the $8.2 million 

they eventually received. However, the inspectors determined, reportedly 

during on-site visits, that their homes were unsafe. For the 60 applicant files 

that we reviewed, the inspectors reported that the homes were unsafe based on 

general conditions, i.e., sanitation, windows, doors, roof, etc. The inspectors 

did not explain those conditions nor did they indicate how or why such 

conditions made the home unsafe. Moreover, no evidence indicated that those 

applicants sought other accommodations or resided elsewhere during the two 

months they received rental assistance. Thus, sufficient evidence was not 

available to support the determinations that those applicants were in need of 

and were eligible for rental assistance. 

In addition, three rental assistance applicants, with only minimal damages, 

each received two months of rental assistance. One of the applicants received 

$1,452 for two months of rental assistance because the inspector determined 

30 44 CFR 206.101(f)(1) 

Page 25 

 
that damages of $93 to windows and doors caused the home to be unsafe. 

According to FEMA inspection guidelines, a home should not be determined 

unsafe when only “minimal disaster-related damages” exist. The guidelines, 

however, do not define “minimal damages.” 

Deferred maintenance is another key factor in determining habitability 

(whether a home is unsafe). Habitability, in turn, is the main determinant for 

rental assistance eligibility. FEMA uses the term “deferred maintenance” to 

refer to pre-existing damages to a home caused by a lack of maintenance. 

FEMA reportedly informed contract inspectors that if deferred maintenance 

(and not disaster-related damages) is the primary cause of a home being 

unsafe, inspectors should not record the home as being unsafe for purposes of 

program eligibility. However, FEMA guidance does not require inspectors to 

document their observations of deferred maintenance for consideration with 

respect to funding decisions for rental assistance. 

 Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

12. Modify its home inspection procedures to require contract inspectors to 

document (1) the basis for determinations that homes are unsafe, and (2) 

instances of deferred maintenance, including an evaluation of the severity 

of such conditions for housing eligibility decisions. 

FEMA’s Comments and OIG Analysis 

FEMA agreed that inspection procedures for documenting home unsafe 

determinations need improvement. FEMA also indicated that it has started a 

review in this area and will continue to review and improve its inspection 

procedures. Based on FEMA’s comments, we consider the recommendation 

related to home unsafe resolved. The recommendation can be closed once 

FEMA develops and implements a plan to document the basis for home 

unsafe determinations. 

With regard to deferred maintenance, FEMA indicated that documenting 

conditions of deferred maintenance tends to add little useful data and such 

efforts can be redundant and time-consuming thus delaying the delivery of 

assistance. Further, FEMA does not require inspectors to record incidents of 

deferred maintenance for cases approved or disapproved. We maintain that 

this information should be documented to afford quality control reviews of 

Page 26 
inspectors’ work and support decisions made to fund or deny funding for 

rental assistance. Therefore, we consider the recommendation unresolved. 

Controls Over Home Repair and Replacement Assistance Need 

Improvement

FEMA awarded $2.7 million to repair 2,180 homes and $132,556 to replace 

20 homes in Miami-Dade County. The need for improved guidance for 

unsafe home determinations and deferred maintenance are also necessary to 

ensure proper funding for home repair. In addition, FEMA needs to improve 

guidance on documenting the reasons for home repair and replacement. 

Under Federal regulation31 FEMA can provide financial assistance to 

homeowners to repair or replace their homes. However, to be eligible for 

assistance, an applicant’s home must be their primary residence, be 

determined unsafe based on inspection, and the unsafe condition must be 

disaster-related. 

We reviewed 12 home repair awards for $30,475. Like rental assistance, the 

inspector’s determination of an unsafe home is necessary for an applicant to 

receive home repair assistance. However, inspectors are currently instructed 

to base their unsafe determinations on general conditions, i.e., sanitation, 

windows, etc., and not required to explain how or why such conditions made 

the home unsafe. We made a recommendation in the previous finding to 

address this issue. 

When it is not economically feasible to repair a home or a home is completely 

destroyed, FEMA guidelines require inspectors to record the properties as 

“Destroyed.” Inspectors also were required to indicate the general cause of 

damage, e.g., hail and wind driven rain. However, the guidelines do not 

require inspectors to document or identify the types of damages to homes to 

warrant a “Destroyed” determination, e.g., collapsed wall and floodwater. 

We reviewed 14 home replacement awards for $96,856—ten for boats and 

four for mobile homes. The general cause of damages recorded for ten home 

replacements was “hail and wind driven rain.” The general cause of damages 

for the four remaining home replacements was tornado or wind. Seven of the 

boats reportedly sank and were not available for inspection. For two of the 

three remaining boats, the inspector did not record the basis for their 

“Destroyed” determination. Four mobile homes were reportedly available for 

31 44 CFR 206.117 (b) 

Page 27 

 
inspection, but inspectors did not identify or document specific damages to 

justify their “Destroyed” determination. 

Recommendation 

We recommend that the Director of FEMA’s Recovery Division: 

13. Modify its inspection guidelines to require inspectors to identify and 

document the types of disaster damages sustained to justify a decision that 

homes are destroyed. 

FEMA’s Comments and OIG Analysis 

FEMA agreed that inspectors should provide more information concerning 

destroyed homes and said that this could be implemented through a procedural 

change in the inspection guidelines with no additional cost to FEMA. 

Based on FEMA’s comments, we consider the recommendation resolved. The 

recommendation can be closed once FEMA modifies its guidelines. 

Oversight of Inspections Needs Improvement 

FEMA’s contract agreements with inspection services providers did not 

require the contractors to review inspections results prior to submission to 

FEMA. Additionally, FEMA’s edit checks for inspection errors were made 

after payments to applicants rather than before. More timely reviews in both 

these areas may have prevented approximately $24.4 million32 of ineligible or 

excessive payments that FEMA has made throughout the United States and its 

territories from August 2004 to February 2005. Of those funds, $215,214 was 

provided to applicants in Miami-Dade County. 

Also, no provisions in the contract agreements required inspectors to certify 

their independence and recuse themselves from inspections that may present 

possible conflicts of interest. 

Contractor’s Review of Inspector Work

FEMA awarded two private firms contracts in February 2001 to inspect and 

verify losses and damages reported by applicants for FEMA assistance. These 

32 The $24.4 million in errors was identified by FEMA for disasters declared between August 2004 and February 2005. 

FEMA informed us that it is validating errors and will initiate recoupment where appropriate. 

Page 28 

 
contractors retained individuals, as independent contractors, to perform the 

required inspection services. However, FEMA did not require the contractors 

to review their inspectors’ work prior to submission to FEMA. As a result, 

errors made by inspectors were not identified timely to prevent improper 

payments. 

The need for contractors to have a timely and effective quality assurance 

program is essential. The need for such a program becomes even more 

paramount in a situation such as Florida with four major hurricanes within a 

40-day period. To address these disasters, FEMA required the contractors to 

double the number of inspections completed each day from 7,500 to 15,000. 

To accomplish this, each contractor hired about 1,600 new inspectors, 

increasing their inspection staff from around 400 to approximately 2,000. 

However, the new inspectors were not familiar with FEMA programs, 

received only 8 to 12 hours of basic training on the FEMA inspection process, 

and their work was not closely monitored. 

While not required, one contractor had a procedure of reviewing the quality of 

the inspectors’ work before submission to FEMA. However, the contractor 

allowed its inspectors to override the reviewer’s observations without 

providing an explanation. The second contractor informed us that reviews of 

some of the completed inspections were made before submission to FEMA, 

but that all inspections on file, regardless of whether they were reviewed or 

not, were submitted to FEMA by 2:00 am each morning. 

FEMA’s Review of Inspection Data

FEMA Inspections Services representatives in Berryville, Virginia, reported 

that NEMIS checks inspection data to ensure completeness required by 

NEMIS business rules, but does not check for errors. Accordingly, payments 

were processed to applicants without an edit check for errors. Following 

payment, Inspections Branch officials downloaded the inspections data from 

NEMIS into a separate database program (Information Management 

Resource) to perform a series of data queries to check for errors made during 

the inspection process (see Appendix E). 

FEMA identified $24.4 million of errors that resulted in ineligible or 

excessive payments that FEMA has made throughout the United States and its 

territories for disasters declared from August 2004 to February 2005. Of 

those funds, $215,214 was provided to applicants in Miami-Dade County. In 

addition, the majority of those errors ($23.9 million) involved duplicate 

Page 29 
payments for room items. Many of these errors could have been mitigated 

had the data queries or edits been made prior to payments. 

FEMA can improve the effectiveness of its review of contractor work by 

including data queries in NEMIS to check for inspection errors prior to 

payment and avoid time consuming, costly, and ineffective recoupment 

action. FEMA officials informed us that they have begun working with 

inspection contractors to design and develop edit checks to prevent errors 

prior to delivery of assistance. 

Inspectors’ Independence

The contractors did not monitor their inspectors’ work to ensure their 

independence and avoid the appearance of conflicts of interest. The two 

contractors hired 22 Miami-Dade County residents to perform inspections. To 

minimize cost and conserve time, both contractors had the practice of 

providing those inspectors with inspection assignments close to their own 

home. Those inspectors performed 4,343 inspections. Five inspectors 

performed 54 inspections within a radius of 20 blocks from their homes. One 

inspector performed a home inspection just one block from his home. While 

no incidents of alleged impropriety on the part of inspectors were identified, 

the practice of allowing inspectors to verify losses and damages, and 

participate in funding decisions of their neighbors, creates the appearance of a 

conflict of interest. 

Recommendations 

We recommend that the Director of FEMA’s Recovery Division: 

14. Modify, when feasible, inspection contracts to require contractors to 

review the quality of work of their inspector prior to submitting 

inspections data to FEMA; 

15. Modify NEMIS to include an edit review of inspector work for errors prior 

to processing payments to applicants; and 

16. Modify inspection contracts to require inspectors to certify their 

independence for each inspection and to recuse themselves from 

inspections that present a possible conflict of interest. 

FEMA’s Comments and OIG Analysis 

Page 30 
FEMA agreed that oversight of the inspection process needs improvement and 

said that steps have already been initiated to implement our recommendations. 

Specifically, FEMA said that it would work with inspection contractors to 

establish better preventive measures to improve inspection accuracy by 

making modifications to the contractor’s edit check systems. FEMA also said 

that it would design and develop edit checks in FEMA to catch errors prior to 

delivery of assistance. Finally, FEMA said contractors would be required to 

include language concerning recusals in their “Standards of Conduct”. 

Based on FEMA’s comments, we consider the recommendations resolved. 

The recommendation can be closed once the planned actions have been 

implemented. 

Page 31 
Appendix A 

Description of the Saffir-Simpson Hurricane Scale 

The Saffir-Simpson Hurricane Scale 

The Saffir-Simpson Hurricane Scale is a 1-5 rating based on the hurricane's present intensity. This is 

used to give an estimate of the potential property damage and flooding expected along the coast from 

a hurricane landfall. Wind speed is the determining factor in the scale, as storm surge values are 

highly dependent on the slope of the continental shelf in the landfall region. Note that all winds are 

using the U.S. 1-minute average. 

Category I Hurricane: Winds 74-95 mph (64-82 kt or 119-153 km/hr). Storm surge generally 4-5 

ft above normal. No real damage to building structures. Damage primarily to unanchored mobile 

homes, shrubbery, and trees. Some damage to poorly constructed signs. Also, some coastal road 

flooding and minor pier damage. 

Category II Hurricane: Winds 96-110 mph (83-95 kt or 154-177 km/hr). Storm surge generally 6-

8 feet above normal. Some roofing material, door, and window damage of buildings. Considerable 

damage to shrubbery and trees with some trees blown down. Considerable damage to mobile 

homes, poorly constructed signs, and piers. Coastal and low-lying escape routes flood 2-4 hours 

before arrival of the hurricane center. Small craft in unprotected anchorages break moorings. 

Category III Hurricane: Winds 111-130 mph (96-113 kt or 178-209 km/hr). Storm surge 

generally 9-12 ft above normal. Some structural damage to small residences and utility buildings 

with a minor amount of curtain wall failures. Damage to shrubbery and trees with foliage blown off 

trees and large trees blown down. Mobile homes and poorly constructed signs are destroyed. Lowlying escape routes are cut by rising water 3-5 hours before arrival of the center of the hurricane. 

Flooding near the coast destroys smaller structures with larger structures damaged by battering from 

floating debris. Terrain continuously lower than 5 ft above mean sea level may be flooded inland 8 

miles (13 km) or more. Evacuation of low-lying residences with several blocks of the shoreline may 

be required. 

Category IV Hurricane: Winds 131-155 mph (114-135 kt or 210-249 km/hr). Storm surge 

generally 13-18 ft above normal. More extensive curtain wall failures with some complete roof 

structure failures on small residences. Shrubs, trees, and all signs are blown down. Complete 

destruction of mobile homes. Extensive damage to doors and windows. Low-lying escape routes 

may be cut by rising water 3-5 hours before arrival of the center of the hurricane. Major damage to 

lower floors of structures near the shore. Terrain lower than 10 ft above sea level may be flooded 

requiring massive evacuation of residential areas as far inland as 6 miles (10 km). 

Category V Hurricane: Winds greater than 155 mph (135 kt or 249 km/hr). Storm surge generally 

greater than 18 ft above normal. Complete roof failure on many residences and industrial buildings. 

Some complete building failures with small utility buildings blown over or away. All shrubs, trees, 

and signs blown down. Complete destruction of mobile homes. Severe and extensive window and 

door damage. Low-lying escape routes are cut by rising water 3-5 hours before arrival of the center 

of the hurricane. Major damage to lower floors of all structures located less than 15 ft above sea 

Page 32 
Appendix A 

Description of the Saffir-Simpson Hurricane Scale 

level and within 500 yards of the shoreline. Massive evacuation of residential areas on low ground 

within 5-10 miles (8-16 km) of the shoreline may be required. 

Source: http://www.nhc.noaa.gov/aboutsshs.shtml 

Page 33 
Appendix B 

The President’s Declaration of a Major Disaster for Hurricane Frances 

Page 34 
Appendix C 

Detailed Breakdown of IHP in Miami-Dade Approved and Audited Costs 

Categories of Assistance 

Housing Assistance Approved Audited 

Expedited Assistance $1,040,336 $91,476 

Rental Assistance 9,290,345 119,656 

Home Repair 2,679,561 51,156 

Replacement Housing 140,217 30,600

Total $13,150,459 $292,888 

Other Needs Assistance 

 

Dental $10,278 $0 

Funeral 23,608 15,743 

Medical 7,033 0 

Moving/Storage 351 0 

Other33 204,632 3,034 

Personal Property 16,950,377 490,956 

Transportation 585,606 134,358

Total $17,781,885 $644,091 

Total IHP $30,932,344 $936,979 

33 This amount includes $12,040, for which FEMA could not identify the approved category of assistance. 

Page 35 

 
Appendix D 

Room Items That May Be Funded Under the ONA Component of the IHP 

Room Description 

Kitchen 7 piece knife set 

Cooking spoon 

Meat fork 

Spatula 

Whisk 

Misc cooking utensils 

4 piece mixing bowl set 

8 piece set pots & pans (w/lids) 

Dinnerware service for 8 

Glassware service for 8 

Flatware service for 8 

Dish rack/drainer 

Linen sets-napkins/placements 

Coffee maker 

Handheld mixer 

2 slot toaster 

Blender 

Electric can opener 

4 sets dish towels/pot holders 

Fire extinguisher 9lb 

Mop/bucket 

Broom 

Trash can 

2’ x 4’ area rug 

3’ x 4’ mini-blind set 

Total Items 25 

Page 36 
Appendix D 

Room Items That May Be Funded Under the ONA Component of the IHP 

Room Description 

Living Room Upholstered 8’ sofa 

Upholstered loveseat 

Upholstered chair 

Coffee table 

2 end tables 

2 lamps 

Clock 

5’ x 8’ area rug 

4’ x 5’ mini-blind set 

Total Items 9 

Bedroom 2 twin beds-frame/foundation/mattress 

2 standard pillows 

2 twin blankets 

2 twin bedspreads 

2 twin sheet sets 

2 4-drawer chests 

2 nightstands 

2 lamps 

18’ x 48’ mirror 

5’ x 8’ area rug 

4’ x 5’ mini-blind set 

Total Items 11 

Bathroom 2 24” towel racks 

4 sets of personal brushes/combs/etc. 

4 sets of personal hygiene items ($50 ea) 

Shower rod 

Panel shower curtain 

Tub mat 

Laundry hamper 

Toilet paper holder 

Storage cabinet 

3 piece rug set 

3’ x 4’ mini-blind set 

Total Items 11 

Page 37 
Appendix E 

FEMA’s Automobile Replacement Awards Versus Blue Book Values 

FEMA's Automobile Replacement Awards Versus Blue Book Values

Amount 

Awarded Year/Make/Model 

Retail Blue 

Book Value34 Excess 

$6,500 87 Ford Mercury $1,300 $5,200 

6,500 87 Honda Accord 1,960 4,540

6,500 88 Chevrolet Caprice 1,000 5,500

6,500 90 Lincoln Continental 2,300 4,200

6,500 91 Honda Accord 3,375 3,125

6,500 91 Nissan Maxima 3,360 3,140

6,500 92 Ford Taurus 1,900 4,600

6,500 92 Saturn SL 1,825 4,675

6,500 93 Mercury Grand Marquis 3,090 3,410

6,500 95 Honda Accord 5,025 1,475

6,500 97 Dodge Stratus 4,165 2,335

6,500 97 Nissan Maxima 7,125 (625)

6,500 98 Nissan Sentra 5,515 985

6,500 98 Toyota Corolla 5,650 850

$6,500 99 Honda Accord 8,550 (2,050)

Total $97,500 15 $56,140 $41,360 

34 The Retailed Blue Book Value represents the amount an individual would pay a dealership for an automobile. Kelly 

Blue Book lists three options for pricing used automobiles: Trade In, Private Party, and Retail. The condition of the 

automobiles was identified as good and average mileage of 12,000 miles per year was used to calculate the mileage on 

the automobiles. 

Page 38 

 
Appendix F 

Data Queries Performed by FEMA’s Inspections Services 

Audit of Miami-Dade County 

Listing of Data Queries Performed by FEMA Inspections Services Branch 

Information Resource Management Database 

As of March 4, 2005 

Following payment to applicants, FEMA’s Inspections Management Branch officials located at 

Berryville, Virginia, periodically executed 10 data queries of inspections received from the 

contractors to check for errors made during the inspection and compliance with FEMA’s inspection 

guidelines. 

1. Home Destroyed Plus Extra Real Property Items Awarded. Where assistance is provided for a 

destroyed home, this query checks to see if any extra assistance was improperly provided for 

individual real property items. 

2. Home Inaccessible and Home Unsafe. FEMA Inspection Guidelines prohibit both conditions on 

the same inspection because an inaccessible home cannot be determined unsafe. This query 

identifies inspections where a home has been listed improperly as both inaccessible and unsafe. 

3. Home Inaccessible With Personal Property Damages Recorded. FEMA Inspection Guidelines 

prohibit both conditions on the same inspection. This query identifies inspections where a home 

has been listed as inaccessible and personal property damages have been recorded improperly. 

4. Home Inaccessible With Real Property Damages Recorded. FEMA Inspection Guidelines 

prohibit both conditions on the same inspection. This query identifies inspections where a home 

has been listed as inaccessible and real property damages have been recorded improperly. 

5. Home Safe And Real Property Damages Recorded. A home must be unsafe for an applicant to 

be eligible for real property assistance. This query identifies inspections where a home was 

found to be safe and assistance for real property was erroneously recorded. 

6. Personal Property All Furnishings With “X or Y” Degree Of Damages. FEMA implemented a 

streamlined inspection process by issuing Addendum No. 6, dated September 16, 2004, to 

FEMA’s IHP Inspection Guidelines. Under this process, an all furnishings designation should be 

used with only “Z” or replacement degree of damages. This query identifies inspections where 

the all furnishings designation was used improperly with the “X” or “Y” level of funding 

(repair). 

Page 39 
Appendix F 

Data Queries Performed by FEMA’s Inspections Services 

7. Rooms with “X, Y, or Z” Degree of Damages and Itemized Damages. The FEMA inspection 

guidelines require inspectors to use “X, Y, or Z” to indicate the level of damages to rooms in an 

applicant’s home. Separate itemization of room damages would be improper and cause 

excessive funding. This query identifies inspections where rooms with an “X, Y or Z” level 

damages and itemized room damages were recorded improperly. 

8. Personal Property “All Furnishings” Recorded More Than Once. An all furnishings designation 

results in an award of the standard room values for an applicant’s entire residence. An 

inspector’s use of all Furnishings more than once would be improper and cause excessive 

funding. This query identifies inspections where all Furnishings were improperly used more than 

once. 

9. Real Property Speed Estimating with Improperly Itemized Items. Addendum No. 6 to the 

Inspection Guidelines also implemented procedures for speed estimating damages to real 

property (minor, moderate, and major damages). The speed estimating procedures covered 

certain real property line items while others were excluded from the process. This query 

identifies the use of speed estimating to inspect real property damages and lists covered items 

that were itemized improperly. 

10. Real Property Speed Estimating Recorded More Than Once with the Same Cause of Damages. 

The assistance for home repairs is limited to $5,100. However, the speed estimating designation 

of real property damages as minor (25 percent of maximum amount) or moderate (50 percent of 

maximum amount) can be made more than once on the same inspection where the cause of 

damages is different. This query identifies speed estimating to record damages to real property 

more than once and the same cause of damages was reported improperly. 

Page 40 
Appendix G 

Recommendations 

We recommend that the Director of FEMA’s Recovery Division: 

Ensure that, for future declarations, proper damage assessments are performed 

to determine and document the type, extent, and location of disaster-related 

damages whenever possible. 

Develop clearer guidance defining circumstances where complete PDAs may 

be unnecessary or infeasible. 

 

Modify FEMA inspection procedures to identify more accurately disasterrelated losses of household items for which applicants should be compensated. 

Modify the IHP Inspection Guidelines to require inspectors to document in the 

“PP Verbal” file the specific item(s) that was not available for inspection, the 

verbal representations made, and the evidence used to verify the loss. 

Develop eligibility criteria for funding automobile damage that can be tied to 

damages sustained as a result of a disaster. 

Modify guidelines to require contract inspectors to justify automobile funding 

recommendations based on disaster-related needs. 

Work with the States to establish a more reasonable replacement value for 

destroyed automobiles based on the cost to acquire a comparable vehicle. 

Develop criteria and guidelines for determining “disaster-related deaths.” 

Require staff to document their analysis of each request for funeral expense 

assistance in order to support approval or disapproval of such assistance. 

Modify inspection guidelines to require contract inspectors to justify that 

funding recommendations for miscellaneous items is based upon disasterrelated needs. 

Recoup the $36,300 paid to individuals who did not report a need for rental 

assistance or damage to their home. 

Modify its inspection guidelines to require inspectors to identify and 

document the types of disaster damages sustained to justify a decision that 

homes are destroyed. 

Page 41 
Appendix G 

Recommendations 

Modify, when feasible, the inspection contracts to require contractors to 

review the quality of work of their inspector prior to submitting inspects data 

to FEMA. 

Modify NEMIS to include an edit review of inspector work for errors prior to 

processing payments to applicants. 

Modify inspection contracts to require inspectors to certify their independence 

for each inspection and to recuse themselves from inspections that present a 

possible conflict of interest. 

Page 42 
Appendix H 

Management Comments 

Page 43 
Appendix H 

Management Comments 

Page 44 
Appendix H 

Management Comments 

Page 45 
Appendix H 

Management Comments 

Page 46 
Appendix H 

Management Comments 

Page 47 
Appendix H 

Management Comments 

Page 48 
Appendix H 

Management Comments 

Page 49 
Appendix H 

Management Comments 

Page 50 
Appendix H 

Management Comments 

Page 51 
Appendix H 

Management Comments 

Page 52 
Appendix H 

Management Comments 

Page 53 
Appendix H 

Management Comments 

Page 54 
Appendix H 

Management Comments 

Page 55 
Appendix H 

Management Comments 

Page 56 
Appendix H 

Management Comments 

Page 57 
Appendix I 

Major Contributors To This Report 

Gary J. Barard, Field Audit Director, Department of Homeland Security OIG, 

Atlanta, Georgia 

George Peoples, Audit Manager, Department of Homeland Security, OIG 

Atlanta, Georgia 

Marcia Moxey Hodges, Chief Inspector, Department of Homeland Security, 

OIG, Washington, DC 

Homer Johnson, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Christopher Gamble, Auditor, Department of Homeland Security OIG, 

Atlanta, Georgia 

Felipe Pubillones, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Raul Adrian, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Tom Goings, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Billy Howard, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Adrianne Bryant, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Harold Simpson, Auditor, Department of Homeland Security OIG, Atlanta, 

Georgia 

Page 58 
Appendix J 

Report Distribution 

Department of Homeland Security

Secretary 

Deputy Secretary 

Under Secretary, Emergency Preparedness and Response 

General Counsel 

Chief of Staff 

Executive Secretary 

Assistant Secretary, Public Affairs 

Public Affairs 

Acting Chief Security Officer 

DHS OIG Liaison 

Audit Liaison, Emergency Preparedness and Response 

Office of Management and Budget

Ms. Katherine Fox 

Chief, Homeland Security Branch 

Office of Management and Budget 

Mr. Jim Holm 

Program Examiner 

Office of Management and Budget 

Page 59 
Appendix J 

Report Distribution 

Congress

Committee on Homeland Security and Governmental Affairs 

United States Senate 

Committee on Appropriations 

United States Senate 

Committee on Homeland Security 

U.S. House of Representatives 

Committee on Appropriations 

U.S. House of Representatives 

Committee on Government Reform 

U.S. House of Representatives 

Page 60 
Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General (OIG) at 

(202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at 

www.dhs.gov/oig. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal 

or noncriminal misconduct relative to department programs or operations, call the 

OIG Hotline at 1-800-323-8603; write to DHS Office of Inspector General/MAIL 

STOP 2600, Attention: Office of Investigations - Hotline, 245 Murray Drive, SW, 

Building 410, Washington, DC 20528, or email DHSOIGHOTLINE@dhs.gov. The 

OIG seeks to protect the identity of each writer and caller.