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21–819 PDF 2005

S. Hrg. 109–161

FEMA’S RESPONSE TO THE 2004 FLORIDA

HURRICANES

HEARING

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MAY 18, 2005

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

MICHAEL L. STERN, Deputy Staff Director for Investigations 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel 

MARY BETH SCHULTZ, Minority Counsel 

TRINA D. TYRER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Collins ................................................................................................. 1

Senator Lieberman ........................................................................................... 5

Senator Coburn ................................................................................................. 8

WITNESSES 

WEDNESDAY, MAY 18, 2005

Hon. Bill Nelson, a U.S. Senator from the State of Florida ................................. 8

Richard L. Skinner, Acting Inspector General, U.S. Department of Homeland 

Security ................................................................................................................. 12

Hon. Michael D. Brown, Under Secretary for Emergency Preparedness and 

Response, U.S. Department of Homeland Security ........................................... 21

ALPHABETICAL LIST OF WITNESSES

Brown, Hon. Michael D.: 

Testimony .......................................................................................................... 21

Prepared statement .......................................................................................... 45

Nelson, Hon. Bill: 

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 35

Skinner, Richard L.: 

Testimony .......................................................................................................... 12

Prepared statement .......................................................................................... 37

APPENDIX 

Exhibit No. 5, a chart entitled ‘‘Errors Found Through Quality Control Inspections Conducted by PB (389 QC Inspections Total)’’ .................................. 75

Exhibit No. 6, ‘‘IHP Daily QC Report’’ ................................................................... 76

Exhibit No. 7, ‘‘IHP Daily QC Report’’ ................................................................... 79

Exhibit No. 8, ‘‘IHP Daily QC Report’’ ................................................................... 86

Exhibit No. 9, ‘‘IHP Daily QC Report’’ ................................................................... 89

Form Letter from Mr. Brown and Jeb Bush ......................................................... 90

Hon. Mark Foley, a U.S. Representative from the State of Florida, prepared 

statement .............................................................................................................. 92

Hon. E. Clay Shaw, Jr., a U.S. Representative from the State of Florida, 

prepared statement .............................................................................................. 95

Responses to questions for the Record for Mr. Skinner from: 

Senator Collins ................................................................................................. 97

Questions for the Record for Mr. Brown (responses were not received by 

press time) from: 

Senator Collins ................................................................................................. 98

Senator Lieberman ........................................................................................... 100

Senator Lieberman on behalf of Senator Sarbanes ....................................... 106

(1)

FEMA’S RESPONSE TO THE 2004 FLORIDA 

HURRICANES 

WEDNESDAY, MAY 18, 2005

U.S. SENATE, 

COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 9:32 a.m., in room 

SD–562, Dirksen Senate Office Building, Hon. Susan M. Collins, 

Chairman of the Committee, presiding. 

Present: Senators Collins, Coburn, and Lieberman. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. The Committee will come to order. 

Good morning. Today, the Committee examines the integrity of 

the Federal Emergency Management Agency’s Disaster Relief Program. Our focus is on FEMA’s response to the series of hurricanes 

that struck southern States last year and the evidence that has 

emerged of fraudulent claims, wasteful spending, and inefficient 

management. 

Disaster assistance programs are vital to those who are the true 

victims of natural disasters. The critical nature of this assistance 

makes reports of waste, mismanagement, and outright fraud particularly disturbing. We cannot sweep such allegations under the 

rug. We must face them head on in order to preserve public confidence in this critical program. 

Although our focus is on specific events in Florida, this issue has 

ramifications that are relevant to future disaster relief efforts in all 

regions of our country. In a span of just 6 weeks in August and 

September of 2004, Florida was hit by four powerful hurricanes in 

quick succession. In some parts of Florida, there was tremendous 

devastation. More than 10 percent of the State’s housing stock was 

damaged or destroyed by the hurricanes, affecting more than 

700,000 residents. Property damage exceeded $21 billion, and 117 

Floridians lost their lives. 

A disaster of this scale required a rapid and substantial re- sponse. FEMA responded with more than $2 billion in immediate 

relief to the State. We expect relief in such dire circumstances to 

be swift and substantial, but we did not expect what came next: No 

sooner had the 2004 hurricane season ended than Florida newspapers began reporting erroneous payments and widespread fraud 

in FEMA claims in Miami-Dade County. Nearly 12,600 residents 

collected more than $31 million in payments from Hurricane 

2

Frances, even though that Labor Day storm hit 100 miles to the 

north. 

The effect of Frances in Miami-Dade has been described as that 

of a typical thunderstorm: Some downed trees and power lines. In 

fact, the Miami-Dade County Office of Emergency Management described the damage from that hurricane as minimal, and the National Weather Service had no reports of flooding. Yet taxpayers 

bought Miami-Dade residents thousands of television sets, air conditioners and other appliances, from microwave ovens to sewing 

machines. The taxpayers also bought rooms full of furniture, new 

wardrobes, and paid to repair or replace nearly 800 cars. It provided rental assistance to people living in undamaged homes. 

In response to these and other questionable expenditures, the 

Department of Homeland Security’s Office of Inspector General undertook an audit of FEMA’s assistance programs in Miami-Dade 

County for Hurricane Frances. We will hear about that audit later 

this morning from the acting inspector general, Rick Skinner, and 

from Michael Brown, the Under Secretary for Emergency Preparedness and Response. This Committee has also been investigating the 

process by which individual damage claims are evaluated and 

verified. 

The IG’s audit reaches several disturbing conclusions that confirm the Committee’s findings. It is often impossible to determine 

whether the payments FEMA made were based on actual, disasterrelated damages. The verifications of many personal property damages were based solely on undocumented verbal statements. No 

receipts, no proof of ownership, and in some cases, not even the 

damaged item to inspect. 

Similarly, the guidelines for repairing or replacing automobiles 

were lacking. Rental assistance was provided to applicants who 

had no apparent need or who had failed to demonstrate eligibility 

for this assistance. 

The IG’s report identifies a number of significant control weaknesses that create the potential for widespread fraud, erroneous 

payments and wasteful practices. One of the most troubling findings by the IG is that FEMA inspectors were allowed to record 

damage to furniture or appliances even though the item allegedly 

had been thrown away before the inspector arrived. This system is 

simply an invitation to fraud. 

The audit also finds substantial deficiencies in the rental assistance program. One example is the Expedited Assistance Program, 

in which FEMA would send one month’s rent to anyone in the disaster area who called and answered certain questions. This was 

done before any inspector was sent to verify the claim. In essence, 

it was a pay first, ask questions later approach. Initially, FEMA 

did not even require the individual to represent that there had 

been damage to the home. Damage or not, FEMA sent each person 

a check for $726. More than $9 million in total rental assistance 

was paid to some 5,000 people in Miami-Dade. The auditors found 

that this money was paid to people whose homes were declared 

unsafe by FEMA inspectors for unspecified and in many cases dubious reasons. In addition, there is no evidence that claimants actually used this money for the intended purpose; that is, to live 

elsewhere while their homes were being repaired. 

3

The IG’s findings of waste and ineffective controls are supported 

by the evidence that this Committee has gathered during its own 

investigation. We have uncovered many instances in which applicants received awards for personal property, rental assistance, or 

both despite the fact that subsequent quality control inspections 

showed that there had been no storm-related damage to the home 

or its contents. For example, last October, FEMA awarded 

$18,452.37 to a Miami-Dade resident for rental assistance as well 

as for replacement of clothing, the furnishings in three bedrooms, 

and a host of appliances. Yet, a subsequent inspection found that 

the home had suffered no storm-related damage whatsoever. 

Other errors were caused by FEMA’s efforts to further streamline and accelerate the inspection process. FEMA’s decision to introduce these new guidelines while thousands of inspectors were already in the field caused considerable confusion, particularly for 

the new inspectors and led to numerous errors and overpayments. 

To cite just one example, FEMA records show that an applicant in 

Miami-Dade was awarded more than $13,000 in personal property 

losses through what was called an inspector speed estimating error. 

The IG’s report also raises questions about why FEMA paid for funerals when medical examiners reported no storm-related deaths in 

Miami-Dade. 

No one contests the need for the Federal Government to provide 

swift and compassionate assistance to the victims of natural disasters, but when scarce resources are wasted, fraudulent claims are 

paid, and safeguards are ignored, there are new victims: The taxpayers, and it is a false choice to say that we cannot protect the 

taxpayers while responding effectively to the urgent needs of disaster victims. 

[The prepared statement of Senator Collins follows:]

OPENING PREPARED STATEMENT OF SENATOR COLLINS 

Today, the Committee examines the integrity of the Federal Emergency Management Agency’s disaster-relief program. Our specific focus is on FEMA’s response to 

the series of hurricanes that struck southern states last year and the subsequent 

evidence that has emerged of fraudulent claims, wasteful spending and ineffective 

government management. Although our focus is on specific events in the recent 

past, this issue has ramifications that are relevant to all regions of the country and 

to all future disaster-relief needs. 

In the span of just six weeks in August and September of 2004, Florida was hit 

by four powerful hurricanes in quick succession: Charley, Frances, Ivan, and 

Jeanne. More than 10 percent of the state’s housing stock was damaged or destroyed by the hurricanes, affecting more than 700,000 residents. Property damage 

exceeded $21 billion. One hundred seventeen Floridians lost their lives. 

A disaster of this scale required a rapid and substantial response. FEMA responded with more than $2 billion in immediate relief to Floridians while they rebuilt their battered state. 

We expect relief in such dire circumstances to be swift and substantial. We did 

not expect what came next. 

No sooner had the 2004 hurricane season ended than Florida newspapers began 

alleging substantial and widespread fraud in FEMA claims based on the fact that 

nearly 12,600 residents in Miami-Dade County have collected more than $31 million 

in payments from Hurricane Frances, even though that Labor Day storm hit 100 

miles to the north. 

The effect of Frances in Miami-Dade has been described as that of a typical thunderstorm: Some downed trees and power lines. In fact, the Miami-Dade County Office of Emergency Management described the damage from the hurricane as ‘‘minimal.’’ Yet the American taxpayers bought Miami-Dade residents thousands of television sets, air conditioners and other appliances, from microwave ovens to sewing 

4

machines. The taxpayers also bought rooms full of furniture and new wardrobes, 

and paid to repair or replace nearly 800 cars. 

There are many issues to be explored in this matter, including the extent of fraud 

and abuse of FEMA’s individual assistance program during the 2004 hurricanes. 

Today our focus will be on a new audit by the Department of Homeland Security’s 

Office of Inspector General. I am pleased that the Acting Inspector General, Rick 

Skinner, is with us today to discuss this report. We will also be joined by Michael 

Brown, Under Secretary for Emergency Preparedness and Response, to discuss 

FEMA’s response to this report. 

This Committee has been investigating the process by which individual damage 

claims are evaluated and verified. On this point, the audit makes several disturbing 

findings. It is often impossible to determine whether the payments FEMA made for 

individual claims were based on actual disaster-related damages. The verifications 

of many personal-property damages were based solely on undocumented verbal 

statements: No receipts, no proof of ownership, in some cases, not even a damaged 

item to inspect. Similarly, the guidelines for repairing or replacing automobiles and 

other items were lacking. Rental assistance was provided to applicants who had no 

apparent need or had failed to demonstrate eligibility for such assistance. 

I should note that the purpose of this audit was not to uncover actual incidents 

of fraud, but to examine whether FEMA has the proper systems in place to prevent 

and detect fraud. The report identifies a number of significant control weaknesses 

that create the potential for widespread waste, fraud, and abuse. 

One of the most troubling findings by the Inspector General is that FEMA inspectors were allowed to record damage to furniture or appliances even though that item 

allegedly had been thrown away before the inspector arrived. That is simply an invitation to fraud. 

The audit also finds substantial deficiencies in the rental assistance program. One 

example is the Expedited Assistance Program, in which FEMA would send one 

month’s rent to anyone in the disaster area who called and answered certain questions correctly, before any inspector was sent to verify the claim. Initially, FEMA 

did not even require the individual to represent that there had been damage to the 

home. Damage or not, FEMA sent each person a check for $726. 

As for the $9 million in total rental assistance paid to some 5,000 people in 

Miami-Dade, the auditors found that this money was paid to people whose homes 

were declared unsafe by FEMA inspectors for unspecific, even dubious, reasons. In 

addition, there is no evidence that these people actually used the money for its intended purpose: That is, to live elsewhere while their homes were repaired. 

The OIG’s findings of waste and ineffective controls are supported by evidence 

that this Committee has gathered in its own investigation. We have uncovered 

many instances in which applicants received awards for personal property, rental 

assistance, or both, despite the fact that subsequent quality-control inspections 

showed that there had been no storm-related damage to the home or its contents. 

For example, on October 11, 2004, FEMA awarded $18,452.37 to a Miami-Dade 

resident for rental assistance, as well as for the replacement of clothing, the furnishings in three bedrooms, and a host of appliances. A subsequent inspection found 

that the home had suffered no damage whatsoever. 

Other errors were caused by FEMA’s efforts to further streamline, or accelerate, 

the inspections process. FEMA’s decision to introduce these new guidelines while 

thousands of inspectors were already in the field caused great confusion, particularly for new inspectors, and led to numerous errors and overpayments. To cite just 

one example, FEMA records show that an applicant in Miami-Dade was awarded 

$13,002.06 in personal property losses through an ‘‘inspector speed estimating 

error.’’

Given that no storm-related deaths were reported in Miami-Dade, questions have 

been raised as to why FEMA paid for several funerals there. The OIG reviewed 

three cases of funeral payments in Miami-Dade and found that none were disasterrelated. In one case FEMA paid for the funeral expenses of a Miami-Dade resident 

who dies in an automobile accident after Hurricane Frances had passed through the 

area. Although the crash report said the accident was caused by the victim’s excessive speed, FEMA awarded funeral expenses because wet roadways associated with 

the hurricane ‘‘could have’’ contributed to the accident. 

I would like to thank Senator Nelson for his appearance here today. I would also 

like to thank Representative Mark Foley, who has submitted a written statement 

but could not be here today. I would note, too, that Senator Martinez wanted to be 

here today but could not due to an unavoidable conflict. They were among the first 

to raise alarms about FEMA’s disaster-relief program. They have seen first-hand the 

devastation these storms brought to their home state of Florida. 

5

No one contests the need for the federal government to provide swift and compassionate assistance to the victims of natural disasters. But when scarce resources are 

wasted, fraudulent claims are paid, and safeguards are ignored, there are new victims: The taxpayers. And it is a false choice to say that we cannot protect taxpayers 

while responding effectively to the urgent needs of disaster victims.

Chairman COLLINS. I want to recognize the individual who is 

going to be our first witness today. Senator Bill Nelson has worked 

very hard on this issue. He was one of the first who raised the 

alarm about wasteful spending and talked to me about it last year 

at that time. I told him the Committee would begin its investigation, and I want to recognize his leadership. 

I also want to recognize the leadership of Representative Mark 

Foley, who has submitted a written statement but could not be 

here today. I would also note that Senator Martinez has expressed 

a great deal of interest in these hearings, but he also had a conflict 

which prevented him from testifying. But I look forward to hearing 

the witnesses’ testimony today and particularly that of our lead-off 

witness, Senator Bill Nelson. 

I would now like to turn to the Committee’s Ranking Member, 

my colleague, Senator Lieberman. 

OPENING STATEMENT OF SENATOR LIEBERMAN 

Senator LIEBERMAN. Thank you, Madam Chairman. 

Let me join you in welcoming our colleague, Senator Nelson here 

and to thank him for his leadership on this matter. I know he is 

concerned about the way in which public money has been distributed in disaster cases and whether it has been distributed appropriately, but I also want to thank you, Madam Chairman, because 

you responded to his request and that of the other members of the 

Florida delegation to hold this hearing and to commit significant 

time of both of our staffs to this investigation. But I do believe it 

is worthwhile. 

This hearing is called to examine whether adequate controls 

exist to ensure that vital Federal disaster relief is going to where 

it is supposed to be going. That seems simple enough, but as you 

have just made clear, Madam Chairman, the Federal Emergency 

Management Agency paid thousands of residents of Miami-Dade 

County millions of dollars in disaster relief, despite the fact that 

the eye of Hurricane Frances hit about 100 miles north of MiamiDade County. 

Many of the people given aid by FEMA neither needed nor deserved the relief. That is not my conclusion; it is the conclusion by 

the investigation of the Department of Homeland Security’s Office 

of Inspector General. And that circumstance is not only wrong; it 

is unacceptable. The tradition of Americans helping Americans 

through their Federal Government in the aftermath of a natural 

disaster traces back, as far as my staff could find, at least to 1803, 

when Congress authorized aid to a New Hampshire town that had 

been devastated by a fire. 

But this generous tradition will be jeopardized if the American 

people or we, their representatives in Congress, conclude that their 

tax dollars are not being spent fairly, efficiently, and responsibly. 

Madam Chairman, I am going to ask that some considerable 

amount of the remainder of my statement be included in the record 

as if read, because it really overlaps with exactly the case that you 

6

have just laid out and go on and say this: The IG of the Department of Homeland Security concluded that because the procedures 

used in Miami-Dade were also used throughout the State of Florida 

and because most of those procedures were also used throughout 

the Nation, a shadow has been cast on the appropriateness of 

FEMA’s awards of disaster relief, and that is a shadow that we together must remove. 

FEMA’s mission of responding to natural disasters and providing 

financial assistance to those harmed by them is an absolutely critical one. None of us question that mission. The question is how the 

mission is being carried out. In order to fulfill the mission in the 

best interests of both those hurt by hurricanes, tornadoes, earthquakes, fire, and flood, and those whose taxes support those relief 

efforts, we have got to make sure that FEMA is following the rules 

and ensure that relief funds go where they should be going. 

Again, unfortunately, the IG’s investigation as well as the one 

conducted by our staff—and I thank the bipartisan staff for the 

high quality work they did on this investigation—both call into serious doubt whether that is happening, whether FEMA is fulfilling 

its responsibilities. 

Madam Chairman, the hurricane season will soon be upon us 

once again. According to researchers at the National Oceanographic 

and Atmospheric Administration and at Colorado State University, 

this hurricane season could be another active and destructive season. It is important that this Nation’s disaster resources, taxpayer 

dollars, are used where they are truly needed and that no questions regarding fairness, efficiency or responsibility taint those relief efforts. 

We can only judge FEMA by how it reacts in emergencies. That 

is its mandate, its very reason to be, and that is why the investigation that is the topic of this hearing is not only important for what 

happened in this particular case but it is important overall. Where 

FEMA is found wanting, we must make changes together with 

FEMA to ensure that the American people continue to support our 

tradition of swiftly coming to the aid of our fellow Americans when 

disaster strikes anywhere in this Nation. 

Thank you, Madam Chairman. 

[The opening prepared statement of Senator Lieberman follows:]

OPENING PREPARED STATEMENT OF SENATOR LIEBERMAN 

Thank you Madam Chairman for calling this hearing today to examine whether 

adequate controls exist to ensure that vital federal disaster relief is going where it 

is supposed to be going. 

That seems simple enough. 

But the question arises over the fact that, last year, the Federal Emergency Management Agency paid thousands of residents of Miami-Dade County, millions of dollars in disaster relief despite the fact that the eye of Hurricane Frances hit about 

100 miles North of Miami-Dade County. 

Many of the people given aid by FEMA neither needed nor deserved it, according 

to an investigation by the Department of Homeland Security’s Office of Inspector 

General. 

This is wrong. 

The tradition of Americans helping Americans in the aftermath of a disaster 

traces back to 1803, when Congress authorized aid to a New Hampshire town devastated by fire. 

But this generous tradition will be jeopardized if Americans come to feel their tax 

dollars are not being spent fairly, efficiently—and with accountability. 

7

The problems in Miami-Dade County began with FEMA declaring the county eligible for disaster assistance without assessing the storm’s impact or documenting 

reasons for the declaration. 

The facts show that the hurricane did not hit Miami-Dade County. Indeed, the 

IG’s investigation determined that the strongest sustained winds were just 47 miles 

per hour—far below hurricane force—and that the county saw no reports of flooding. 

While these conditions undoubtedly caused damage, the IG found that FEMA 

failed to assess and document whether that damage rose to the level requiring federal assistance. 

Thus, the IG concludes that FEMA mishandled the declaration process—one essential tool FEMA must use to safeguard taxpayer dollars. 

But by including Miami-Dade County in its disaster declaration, FEMA made millions of people eligible for assistance—stretching its already thin resources even 

thinner and making its programs ‘‘susceptible to waste, fraud and abuse,’’ according 

to the IG’s report. 

Some small but telling examples, Madam Chairman:

• FEMA awarded rental assistance to people who apparently weren’t in need 

of shelter. For instance, FEMA gave almost $1,500 in rental assistance to one 

person whose home had sustained just $93 in damage. In other instances, 

FEMA awarded rental assistance to people who didn’t need to leave their 

homes. This happened because eligibility criteria in some instances failed to 

require that an applicant’s home actually be damaged in order to receive assistance;

• FEMA, in accordance with its own procedures, spent millions replacing items 

that the household never had;

• FEMA’s contract inspectors conducted thousands of inspections of homes 

within blocks—once a single block—of their own home, which the IG found 

raises at least the appearance of a conflict of interest;

• FEMA gave Miami-Dade residents whose vehicle had supposedly been destroyed by Frances $6500 for replacement costs even though their vehicle was 

worth only a fraction of that.

Unfortunately, Madam Chairman, FEMA’s problems in the way it doled out disaster relief do not stop at the boundaries of Miami-Dade County. 

The IG concluded that because the procedures used in Miami-Dade County were 

also used throughout the State of Florida—and because most of those procedures 

were used throughout the Nation—a shadow is cast on the appropriateness of 

FEMA’s awards of disaster relief to individuals throughout Florida and the rest of 

the Nation. 

FEMA’s mission of responding to natural disasters and of providing financial assistance to those harmed by them is an absolutely critical one—and one I completely 

support. That’s not what this hearing is about. 

But in order to fulfill that mission in the best interests of both those hurt by hurricanes, tornadoes, earthquakes, fire and floods—and those whose taxes support the 

relief efforts—we must make sure that FEMA follows the rules and ensures that 

relief funds go where they should be going. 

Unfortunately, the IG’s investigation, as well as the one conducted by our staff, 

call into serious doubt whether that is happening. 

The start of the hurricane season is almost upon us. According to researchers at 

the National Oceanic and Atmospheric Administration and Colorado State University, this season could be another active—and possibly destructive—year. 

It’s important that our Nation’s disaster resources—our taxpayer dollars—are targeted to where they are truly needed and that no questions regarding fairness, efficiency, need or accountability taint our relief efforts. 

We can only judge FEMA by how it reacts in emergencies. That is its mandate—

its very reason to be. 

And where FEMA is found wanting, we must make changes to ensure that Americans continue to support our two-century-old tradition of swiftly coming to the aid 

of our fellow Americans when disaster strikes anywhere in the Nation. 

Thank you Madam Chairman.

Chairman COLLINS. Thank you very much. I appreciate all your 

work on this issue, and your full statement will be inserted in the 

record as if read. 

8

1The prepared statement of Senator Nelson appears in the Appendix on page 35. 

Senator Coburn, we are delighted to have you with us today. I 

know wasteful spending is very high on your radar screen, and we 

appreciate your joining us. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Thank you, Madam Chairman, and I appreciate both you and the Ranking Member for holding this hearing. 

We often hear in Washington that the reason we cannot control 

our spending is because of mandatory spending, and we are going 

to have an actual deficit this year of $622 billion. That is the real 

number. That is not what you will hear most politicians say. But 

its $622 billion, and this hearing is important because across our 

government there are ways we can improve spending, we can allocate our resources better, we can more effectively do the jobs that 

we have been asked to do. 

So I look forward to the testimony. I will not be able to be here 

for the entire hearing, and I thank you, Senator Nelson, for bringing this up as well as Senator Martinez. It is important. If we are 

going to really help people, then we cannot expend resources on 

those who do not need our assistance when there are others who 

truly do. Thank you. 

Chairman COLLINS. Thank you. 

Senator Nelson, thank you so much for being here today, and I 

would ask that you proceed with your statement. 

TESTIMONY OF HON. BILL NELSON,1 A U.S. SENATOR FROM 

THE STATE OF FLORIDA 

Senator NELSON. Madam Chairman, your opening statement was 

so comprehensive that I can short-circuit a lot of my remarks. 

First of all, I want to thank you and Senator Lieberman for taking the initiative to do the investigation. As I came to you with 

what we were hearing back home, and obviously, something was 

wrong. You did not hesitate a moment. You first did the investigation by your own staff. It has now augmented, as you have referenced, the IG’s report. And thanks to you, you are bringing this 

into the full light of the sunshine with this hearing. 

And what we are seeing is a picture that is not a pretty picture, because we appropriated $8.5 billion just to FEMA for these four 

storms, most of which would be allocated to Florida, because that 

is where it got the brunt. And in fact, not only are we experiencing 

the circumstances that you have outlined where payments have 

gone into Miami-Dade County that the winds did not get up there, 

and look at what was said right there by the Miami-Dade Emergency Operations Center: Damage and debris from—you are taking 

it down, and I am reading it. [Laughter.] 

Damage and debris from Frances is minimal. You have pointed 

that out. You have pointed out the fact that burials, funerals were 

paid for when, in fact, many more, in excess of 300, were paid for 

when the officials had said that the deaths accruing directly according to the storms was somewhere in the range of about 125. 

You have pointed out that in fact, that those payments were made 

before a damage assessment was in fact made, and so, you have 

9

laid out in your comments here, I think, the essence of what we 

ought to be looking at. 

Now, there is an additional thing that I would add. First of all, 

I want to credit FEMA. We learned some serious lessons after the 

1992 monster, Hurricane Andrew. One level of government was not 

talking to another level. It was chaos. FEMA was not ready. And 

out of those lessons learned, the immediate aftermath of the 

storms, there was an excellent response. And FEMA in large part 

should be given the credit. The State of Florida and its Emergency 

Operations Center working with FEMA and the local governments; 

they had everybody talking to each other. FEMA had prepositioned 

things so that you could begin to get supplies in. There was the National Guard that set up a distribution center at the Lakeland Airport and had all of these convoys that were getting supplies in. It 

really looked like we had our act together and that we were responding to the lessons that we had learned after that monster 

hurricane. 

But then, as time began to wear on, and give credit where credit 

is due. I mean, who has ever had to respond to four hurricanes in 

a row within a 6 weeks’ period? So FEMA was overwhelmed. But 

as the time continued to wear on, either there is a problem in a 

structure of FEMA that the Congress in its oversight capacity 

should address, or there is poor management, or there is both. And 

that is my hope, that as a result of the leadership of you two Senators that you are going to be able to help FEMA to help folks like 

us, because hurricane season is starting on June 1. 

Now, I just want to show you the path of the four hurricanes. 

Madam Chairman, this was extraordinary in 6 weeks. In 6 weeks; 

this is the first one that came in. This is Charlie. Now, the good 

news about Charlie is that Charlie was a very tight hurricane. It 

had winds of 145 miles an hour, but those sustained winds were 

only about 10 miles wide. If it had been a monster like Andrew 

that was 40, 50 miles wide, you can imagine. 

The other good news was that Charlie, which, by the way, I was 

tracking Charlie way down south of Cuba as a hurricane hunter in 

the NOAA, and I want to commend them for your consideration, 

too, because they have gotten very sophisticated. On this particular 

one, we were dropping SONS, which is a loaded instrument package that would fall from 42,000 feet all the way to the ocean, and 

then, the plane collects the data in real time, beams it by satellite 

back to the National Hurricane Center, and there, they can get, because of all of these incredible measurements, a better estimate of 

which way it is heading. 

Senator LIEBERMAN. Bill, you are the only Member of Congress 

that I know of who could say at 42,000 feet was not as high as he 

has been. 

Senator NELSON. I tell you, it was not quite as fun, either. 

Originally, we thought Charlie was really going to be the next 

Andrew, because it was scheduled to skirt the Keys and come right 

up into Tampa Bay. And you can imagine, if the waters from that 

counter-clockwise had pushed all of the waters up into Tampa Bay, 

you would have had a major flooding problem. Instead, Charlie is 

coming up here; suddenly takes a right turn and comes up CharVerDate 0ct 09 2002 11:22 Dec 09, 2005 Jkt 021819 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 C:\DOCS\21819.TXT SAFFAIRS PsN: PAT
10

lotte Bay and hits ground zero at 145 miles an hour, which was 

Punta Gorda. 

It continued right on up the central core of Florida, exiting at 

Daytona Beach; massive destruction all the way that was within 

the narrow diameter of the hurricane. All right; a few weeks later, 

here comes Frances; third one, Ivan, that just tore up the Panhandle, particularly Pensacola. The Navy base itself had $750 million of damage. 

Then, here comes the fourth one, Jeanne, and notice where the 

three have crossed: This is just south of Lakeland in southeast Polk 

County. The little rural county to the south of it, Hardy County, 

has, to date, only 21 percent of its FEMA claims paid. I wanted to 

bring this to your attention because where three major hurricanes 

crossed, very near Hardy County, a poor, rural county, you only 

have 21 percent of their claims paid. This just should not be, and 

this should be part of the oversight. 

And so, Madam Chairman, today, I am going to be filing legislation that is going to be referred to your Committee that I would 

respectfully suggest are some things that you might want to look 

at. This legislation is going to require preliminary damage assessment before Federal assistance can be paid out, something we have 

already talked about. It also tightens the rules so that FEMA inspectors can better identify disaster-related losses of household 

items and document the verbal accounts that they were getting 

from storm loss instead of just gathering up people down at the 

local Hardee’s and taking their verbal accounts of what the inspectors never saw. 

For example, in Miami-Dade County, almost $100,000 was paid 

to residents for destroyed cars, and the IG report said that damage 

to those vehicles was not verified. Well, under this legislation that 

I am filing, it is going to require proof. This legislation would also 

limit funeral assistance to disaster-related deaths, and we have already heard about that, and under this legislation, inspectors 

would not be able to assess the losses of their neighbors or make 

purchases from the residents whose homes they have reviewed, 

which is a clear conflict of interest. 

This would prevent cases like the one of the FEMA agent who 

bought an oceanfront home from a 72-year-old woman who sought 

out agency advice when she became concerned about the mold that 

was occurring in her home as a result of the storm. It is alleged 

that she was duped to sell her home for way under the fair market 

value. This legislation would address that. And this bill toughens 

penalties for fraud and strengthens the requirements for criminal 

background checks. 

The estimates are, Madam Chairman, that up to 22 percent of 

FEMA inspectors had criminal records, including rap sheets for serious crimes. This just should not be. So I hope you will consider 

this legislation as you go about your deliberations as to what you 

want to do. And I hope that your Committee will look beyond the 

IG report for other ways to improve our Nation’s disaster assistance agency. 

Now, Madam Chairman, I can give you a few places to start: For 

example, I know many officials in Florida that would love to chat 

with your staff, including John Booth, the Executive Director of the 

11

Palm Beach County Solid Waste Authority, or George Touart, 

Escambia County Administrator, or Dave Metzger, the Orange 

County Public Works Director. 

What in my judgment you all need to do in your oversight capacity is to give FEMA clear, concise procedures for helping local governments pay for doing such things as removing debris from private roads. They have the ability, according to their own regulations, to do this in the interests of public health and safety. 

But how many times did we hear all the way from the Panhandle 

down to the southwest coast to the southeast coast of Florida that 

FEMA said that they were not, even under their own discretion, 

going to allow under the caveat of public health and safety to remove that debris from a private road. I have worked with county 

after county in our State, and they have pleaded to get needed 

help. And many of those counties, though cash-strapped, are footing the vast majority of the bill for the essential cleanup. 

Madam Chairman, because they are footing the bill for this essential cleanup, their budgets are decimated, and those officials, 

naturally, are praying that they are going to be spared a hurricane 

coming in this next hurricane season. So while FEMA needs to do 

a better job, Congress needs now to act in order to regain the public trust by ensuring that taxpayer money appropriated is spent 

wisely, Senator Coburn, and that it is spent efficiently to help 

Americans recover from natural disasters. 

We owe this not just to the folks who have suffered so much in 

my State but to the residents of the other hurricane States that are 

going to get hit in the future. All along the Gulf Coast and the Atlantic Coast, we are in the paths of hurricanes. This is a part of 

the lifestyle that we have. But you can look to other States: Look 

at the Californians, who happen to live on a fault line, or look at 

the Washingtonians, who happen to live in the shadow of Mount 

Saint Helens, or look at the rural Americans who happen to live 

near rivers that swell and city dwellers who have to face the constant threat of the turmoil and the tragedy surrounding terrorists. 

And so, I finish where I started, Madam Chairman: This would 

not be happening without your and Senator Lieberman’s leadership, and I thank you from the bottom of my heart that this issue 

needs, this story needs to be told, and in so telling this story, I believe that we will get things much more ready to adequately handle 

these kinds of natural disasters in the future. Thank you. 

Chairman COLLINS. Thank you very much for your leadership on 

this issue. We very much appreciate your bringing these concerns 

to the Committee’s attention. Thank you very much for your testimony. 

Senator NELSON. Thank you. 

Chairman COLLINS. Our next witness today is Richard L. Skinner, the Acting Inspector General of the Department of Homeland 

Security. Mr. Skinner has vast experience in audit and oversight, 

which is invaluable to this Committee and to the American people. 

The audit that Mr. Skinner conducted regarding FEMA’s response 

to the 2004 hurricanes will be the subject of his testimony today. 

We welcome you and look forward to your testimony. 

12

1The prepared statement of Mr. Skinner appears in the Appendix on page 37. 

TESTIMONY OF RICHARD L. SKINNER,1 ACTING INSPECTOR 

GENERAL, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. SKINNER. Thank you, Madam Chairman. 

As the Hon. Nelson pointed out, your statement was very comprehensive, so I hope what I have to say here does not sound redundant or duplicative of what you have already said, but thank 

you for the opportunity to be here today to discuss our work on 

FEMA’s Individuals and Households Program (IHP), in the MiamiDade County area following Hurricane Frances. 

Our report on this subject is being released to the public today 

and is included as an attachment to my prepared statement. In 

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

hurricanes in 2 months, causing widespread damage and destruction. In addition, during the Florida disasters, FEMA was also delivering aid to individuals and households in 15 other States and 

two territories. 

According to FEMA, the upsurge of the disaster activity during 

that time period proved well above its standing operational capabilities, necessitating the hiring and training of additional staff and 

contract personnel. We acknowledge the difficult balance that 

FEMA must strike between speed and stewardship of taxpayer resources, a balance between the need for adequate documentation 

and the need to expedite assistance to disaster victims. 

Nevertheless, as our audit concludes, there is considerable room 

for improvement in the manner in which FEMA administers its 

disaster relief responsibilities. The inclusion of Florida’s MiamiDade County in the declaration for Hurricane Frances and subsequent awards of about $31 million under the IHP has been the subject of considerable public reporting and concern. As a result, we 

initiated an audit of the IHP in Miami-Dade County to determine, 

one, whether FEMA had sufficient evidence to support the county’s 

eligibility for IHP assistance, and two, whether adequate program 

controls existed to ensure that funds were provided only to eligible 

applicants for eligible purposes. 

We found critical shortcomings in both areas. I would like to 

point out, however, what the audit did not attempt to do. The audit 

did not attempt to verify claimants’ losses or incurred costs, nor did 

it attempt to determine the extent of fraud in Miami-Dade County. 

While our audit procedures provided due diligence to situations involving potential fraud, all matters involving fraud are being handled separately by our Office of Investigations in coordination with 

the U.S. Attorney’s office for the Southern District of Florida. 

While our audit of IHP at Miami-Dade County may be complete, 

our investigative efforts are still ongoing. Other than to say we still 

have an aggressive investigative program within the State of Florida, including Miami-Dade County relative to the four hurricanes 

that hit the State during 2004, it is our policy not to discuss our 

fraud detection initiatives or our investigations involving fraudulent claims. To date, 14 individuals have been arrested for making 

false claims. 

Our audit concluded that FEMA designated Miami-Dade County 

eligible for IHP without a proper preliminary damage assessment 

13

(PDA). FEMA contends that such an assessment is not required 

under its regulations. Instead, FEMA officials advised us that they 

relied on their best judgment at the time to amend the President’s 

declaration and add 13 counties for disaster relief under the IHP. 

However, we believe that, notwithstanding the regulations, a PDA 

was required by the President’s declaration, as I will attempt to explain here. 

In anticipation of the impact of Hurricane Frances, Florida’s Governor submitted a disaster declaration request on September 2, 

2004, 2 days before the storm, to FEMA’s Region IV, requesting 

that all 67 counties in the State be declared eligible for public assistance and that 18 counties be declared eligible for the full complement of individual assistance programs, including IHP. 

The President’s declaration, however, dated September 4, 2004, 

excluded Miami-Dade and another 12 of the 18 counties recommended by the Governor for IHP and stipulated that FEMA 

could provide assistance beyond the designated areas subject to 

completion of PDAs. 

Nevertheless, effective September 5, 1 day later, FEMA amended 

the President’s declaration to make IHP 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. FEMA made the decision to add those counties based on the 

path of Hurricane Frances as it made landfall on September 5, 

2005. The decision was not supported by a PDA, however, as required by the President. 

FEMA notes in its response to our report that a comprehensive 

door-to-door damage assessment would have unduly delayed 

FEMA’s response efforts. While we believe that a PDA was required to document the impact and magnitude of the hurricane in 

Miami-Dade, a door-to-door assessment of damages was not necessarily needed nor suggested by our office. 

Although there is sufficient evidence today after the fact that the 

county indeed experienced some damages related to Hurricane 

Frances, it is still unclear, in our opinion, that the extent of the 

damages would have warranted the inclusion of the county in the 

Presidential declaration. A PDA, as required by the President, 

would have eliminated any doubt whether or not the county qualified for IHP assistance. 

As a result of the declaration for Miami-Dade, residents now not 

severely affected by the hurricane were eligible to apply for assistance. While FEMA says rightfully residents still had to be found 

eligible in order to receive such assistance, Hurricane Frances, 

along with the previous and subsequent disasters, strained FEMA’s 

inspection resources, tested program controls and made the IHP 

more susceptible to potential fraud, waste, and abuse. Further, as 

I will attempt to explain in this statement, flaws in the IHP, and 

the absence of certain internal controls increased the likelihood 

that funds were not always provided to eligible applicants for eligible expenses. 

We recommended that for future disasters, FEMA ensure that 

PDAs are performed to determine the type, extent, and location of 

disaster-related damages whenever practicable. FEMA asserts that 

it already does this and that its actions in Miami-Dade were operVerDate 0ct 09 2002 11:22 Dec 09, 2005 Jkt 021819 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 C:\DOCS\21819.TXT SAFFAIRS PsN: PAT
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ationally and situationally defensible. We disagree. We continue to 

believe that a PDA was required by the President and that a PDA 

would have been both practicable and justifiable, especially in light 

of the fact that Hurricane Frances made landfall 100 miles north 

of Miami-Dade County, produced only moderate tropical force 

winds, and caused no flooding whatsoever. 

Furthermore, we found no evidence to suggest that the county 

experienced widespread trauma, that is, loss of life, loss of essential 

utilities, and other essential services or at least not for a duration 

that would have justified the inclusion of the county in the President’s declaration. 

I now would like to discuss the major program control weaknesses that we found relative to the IHP itself; first, concerning 

Other Needs Assistance (ONA). As of February 28, 2005, FEMA 

provided $18 million in ONA to Miami-Dade County residents in 

response to Hurricane Frances. We determined that ONA, especially for the repair and replacement of household room items and 

automobiles, should be more closely aligned to actual losses and 

that better documentation was needed to support determinations 

that damages and deaths were directly caused by the storm. For example, FEMA awarded $10.2 million to repair or replace 

household room items. 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, regardless of the actual 

loss. In other words, a resident may have had a single bed in a 

room, which was destroyed by the storm. Yet, FEMA would pay the 

resident the cost of an 11-piece bedroom suite. We recommended 

this procedure be changed. FEMA agreed with our recommendations and said 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 the inspection. 

In addition, according to the State’s established replacement 

value for eligible, disaster-damaged vehicles, FEMA provided 

$6,500 for each automobile destroyed. For 15 of the automobiles, 

the retail book value, at least in our sample, totaled $56,000. However, FEMA awarded $97,000 for those automobiles. In our opinion, 

FEMA should work with the States to establish a more reasonable 

replacement value for destroyed automobiles. 

Now, concerning housing, 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 

missions and generally weak guidelines for performing inspections 

and documenting results. For example, some rental assistance applicants received but may not have had a need for such assistance; 

while others may simply have not been eligible for the assistance. 

Finally, FEMA’s oversight of inspection needs improvement. Specifically, contractors were not required to review inspection reports 

prior to their submission to FEMA for payment. Edit checks for inspection errors were made after payments rather than before, and 

no provisions existed for inspectors who lived in the areas to recuse 

themselves from inspections that may present possible conflicts of 

interest. 

15

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

the IHP were also used throughout the State of Florida. Further, 

according to FEMA officials, most of the procedures were used for 

disasters in other States, making our findings and recommendations broadly applicable to FEMA’s implementation of the IHP nationwide. FEMA acknowledges that our report identifies several legitimate program flaws in the IHP and has agreed to make the 

necessary improvements. 

Madam Chairman, that concludes my prepared remarks. I would 

be happy to address any questions that you or any of the Members 

may have. 

Chairman COLLINS. Thank you very much, Mr. Skinner, for an 

excellent presentation. 

FEMA comments on the audits. When I was looking through the 

comments that FEMA officials made on your IG report, I was particularly struck by one statement: ‘‘FEMA says we were pleased 

that the OIG confirmed no widespread or systemic waste or abuse 

in Miami-Dade County in the wake of Hurricane Frances.’’ I must 

say I am baffled by that statement. Is that a fair reflection of your 

conclusions that you found no pattern of or widespread waste or 

abuse? 

Mr. SKINNER. No, not at all. That is not an accurate reflection 

of our report at all. 

There are four things I would like to point out here: One, we 

found some very serious systemic weaknesses and internal control 

weaknesses with regard to all parts of the IHP program. This, in 

turn, has consequences; that is, it does, in fact increase the potential for fraud, waste and abuse. 

Second, I would like to point out that the purpose of this audit, 

in itself, was not to identify fraud, waste, and abuse per se. We 

were looking at the processes and procedures in place to determine 

whether they were adequate enough to ensure that payments were 

proper to eligible applicants for eligible purposes. 

Third, we have a very aggressive investigative program that is 

still ongoing in Miami-Dade. We have already made 14 arrests. It 

is premature at this time to say that there is no widespread fraud, 

waste, or abuse while we still have an ongoing investigative program. 

And finally, the mere fact that we do not find or prosecute everyone that committed fraud or identify all the waste, does not mean 

that it does not exist. A lot of the fraud is very de minimis, and 

it is very hard to prosecute. So it could be widespread, just not 

prosecutable. 

Chairman COLLINS. And in fact, I think a more accurate description of your report would be to say that the internal control weaknesses that you identified were prevalent and create, in fact, a 

strong potential for abuse, wasteful spending, erroneous payments. 

Is that a fair statement? 

Mr. SKINNER. Absolutely, that is correct, Senator. 

Chairman COLLINS. According to the data we have been provided by FEMA, in Miami-Dade, FEMA spent some $17.1 million for personal property awards, $9.3 million for rental assistance, $2.7 million for home repairs and a little more than $1 million for expedited assistance, almost $600,000 for transportation. Did you find 

16

weaknesses in the program controls in each of these areas? I am 

trying to get at the question of whether there was a problem in 

only one part of the disaster assistance or whether you found weaknesses in all of the areas. 

Mr. SKINNER. The problems that we found were across the board. 

We found problems in each and every one of the components of the 

IHP program. For example, funds provided for repairs and replacement of household room items were not based on actual losses. Recipients of rental assistance oftentimes may not have been eligible 

or may not have even requested rental assistance, but were paid 

for rental assistance. Guidance and criteria for replacing automobiles and paying for funerals, as you mentioned earlier, were 

just nonexistent. It was very judgmental. So this was prevalent 

across all components of the program, the weaknesses that we 

looked at. 

Chairman COLLINS. And that is particularly troubling, because 

that means that there are systemic weaknesses in FEMA’s disaster 

relief programs that are not unique to what happened in MiamiDade. The situation there appears to have been worse because 

there was not an assessment of damages before the designation 

was made for eligibility, creating all sorts of questions about 

whether individuals should have been eligible for assistance in the 

first place. But if these weaknesses are prevalent in all these programs, then, that suggests a potential for similar problems whenever these programs are triggered. Is that fair? 

Mr. SKINNER. Yes, that is correct. These are programmatic, systemwide weaknesses that were not applied just in Miami-Dade. 

They were applied throughout the State of Florida, and for that 

matter, these are the same policies, procedures, internal controls, 

and guidelines that are applied for all disasters nationwide. So 

what we found here, I think, is just indicative or representative of 

the problems that we may have on a nationwide basis. 

Chairman COLLINS. Thank you. Mr. Skinner, as you are aware, 

the Committee staff has also been investigating the claims in Florida, and there is a black exhibit binder that I think now is on your 

table before you. 

At tabs 6 through 9, you will find that there are four examples 

of quality control reports performed on claims that were paid by 

FEMA in Miami-Dade as a result of Hurricane Frances. And I 

would like to give you a moment to find those, and if we have them 

on display as well, if we could have those put up. The four claims total approximately $45,000, but what struck me 

is in each case, the quality control report found no damage to the 

home whatsoever: No storm-related damage. FEMA awarded 

money for such things in these four cases as rental assistance, 

damage to furniture, clothing, televisions, air conditioners, automobiles, telephones, and appliances. In one case, you will see 

FEMA awarded hundreds of dollars to pay for the repairs to a 

dryer, and yet, the inspector indicates that there was no dryer. In 

another case, payment was made for a washer that the applicant 

did not even own. 

These examples concern me greatly, because they appear to reflect fundamental problems with the inspection process that was 

used by FEMA. And the inspectors really are the front lines of deVerDate 0ct 09 2002 11:22 Dec 09, 2005 Jkt 021819 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 C:\DOCS\21819.TXT SAFFAIRS PsN: PAT
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fense. They are the ones who are supposed to ensure that money 

is not wasted and that damage really did occur, and yet, we found 

widespread problems as we started going through the quality control reports that were taking a look at the decisions made by the 

inspectors. 

The Committee staff interviewed several of the quality control inspectors who told us that by and large, these were not close calls, 

that there was simply no hurricane-related damage. The four examples that I have just discussed and that we have provided to 

you, are these the types of results that you would expect based on 

the program control weaknesses that you identified in your audit? 

Mr. SKINNER. Yes, it would. Two things I would like to comment 

on this or maybe three: It looks like the quality control program 

is working, to identify something as egregious as this. But first, it 

is very telling on the quality of the inspections themselves. There 

is something inherently wrong with the way we did our inspections 

if we can find examples like this through our quality control program. 

These inspectors, I believe, who were in Miami-Dade, a good 

many of them were not only inexperienced, but they were poorly 

trained and not always adequately supervised. That, coupled with 

the internal control weaknesses as these inspection reports went 

through the process, that is, they were not checked before they 

were sent to FEMA. FEMA’s edit checks were done after the payments were made. These issues all contribute to these types of 

problem cases. So this does not surprise me at all. This is probably 

somewhat widespread, I would contend. 

Chairman COLLINS. It seems to be—based on the separate investigation that the Committee has done. It just is extraordinary that 

payments were made to individuals who were living in undamaged 

homes, and in a couple of the cases before you—we are talking 

about payments of $18,000, $19,000. In addition, these individuals 

also received rental assistance, and yet, their homes were undamaged. And that is the issue I want to move to next. FEMA paid 

about $9.3 million in rental assistance to more than 5,000 people 

in Miami-Dade County; is that correct? Or in the neighborhood? 

Mr. SKINNER. Yes, that is correct. 

Chairman COLLINS. So that is almost a third of the money went 

for this rental assistance. In the sample of files that you and your 

auditors reviewed, was there any evidence at all that the recipients 

of rental assistance ever actually moved out of their homes? 

Mr. SKINNER. No, not at all. We did not find any examples where 

anyone actually moved out of their homes. 

Chairman COLLINS. So, yet, people received rental assistance, 

and yet, they did not leave their dwellings. 

Mr. SKINNER. That is correct. 

Chairman COLLINS. And is it your understanding that when 

FEMA awards rental assistance, it actually has to be spent on rent. 

Mr. SKINNER. That is our interpretation. That is why it is called 

rental assistance. 

Chairman COLLINS. That does seem fairly logical. 

Mr. SKINNER. Yes. 

18

Chairman COLLINS. So does FEMA ever attempt to determine 

how many people who received rental assistance actually used it 

for that purpose? 

Mr. SKINNER. As far as I know, no. 

Chairman COLLINS. Is this another area where you think that—

let me ask you: What do you think needs to be done to tighten up 

on the rental assistance program? 

Mr. SKINNER. For one thing, what we found was that people—

FEMA’s guidelines were very explicit, FEMA’s IHP guidelines for 

rental assistance. That is, if you receive payment for rental assistance, you are, in fact, to use it for rental assistance, and you must 

maintain receipts for 3 years to support the fact that in fact you 

used it for rental assistance. 

However, the inspector guidelines that were passed out to the inspectors actually advised the applicants that no, you in fact did not 

have to use your rental assistance funds for rental assistance; you 

could use them for home repairs. It appears to us that the right 

hand does not know what the left hand is doing. The guidelines 

need to be very explicit, and the inspectors have to understand, or 

at least FEMA has to provide clearer guidelines to make it perfectly clear that just because you may be eligible for rental assistance does not mean that you should be entitled to rental assistance. 

Oftentimes, and this gets back to the quality of the inspections, 

the inspectors would deem homes unsafe. And oftentimes, many 

times, we have questioned whether that determination was supportable. But by merely checking that the home was unsafe, these 

individuals were automatically made eligible for rental assistance 

and were, in fact, paid for rental assistance, and oftentimes, they 

did not even ask for rental assistance, but since they were determined eligible by the inspector, they in fact received rental assistance, and I think there is a breakdown in communications, guidelines, and in internal controls. 

Chairman COLLINS. So did your inspectors also find that there 

were cases where homes were declared unsafe when, in fact, they 

just needed very minor repairs? 

Mr. SKINNER. Oh, yes, as we went through the inspectors’ reports, we found many cases in which, for example, a window was 

missing at a cost of $97. It was declared unsafe. Therefore, they 

qualified for rental assistance and received rental assistance, although they did not move or did not relocate. 

Chairman COLLINS. So you may have cases where an individual 

has very minor repairs, and it is an actual case where the repairs 

were $97, and yet, the individual could receive $726 in rental assistance, additional payments for repairs; in other words, payments 

far exceeding what the minor repairs are and yet never moved out 

of the house. 

Mr. SKINNER. That is entirely true. That is entirely accurate, yes. 

Chairman COLLINS. Could you explain to us more about how the 

Expedited Assistance Program works? I understand that is a rarely 

used process, but it was used in Miami-Dade. 

Mr. SKINNER. Yes, it is my understanding as well that it is rarely 

used. I know it was called something else in other disasters, Fast 

Track in Northridge and in Andrew. In Miami-Dade, in essence, 

19

they opened a door for expedited assistance for rental assistance, 

and all that was required was a call-in, and you had to meet three 

criteria or two or three criteria and answer two or three questions 

to be made eligible. One, you had to attest to the fact that was your 

primary residence, and two, you needed essential housing needs or, 

in fact, you were living somewhere else, and that would automatically qualify you for rental assistance. Once was done; the payments were made, and there was no follow-up or any verification 

that any of those people, in fact, were eligible or entitled to rental 

assistance. 

Chairman COLLINS. Is this done generally just over the telephone, then? 

Mr. SKINNER. Yes. 

Chairman COLLINS. Where the applicant calls in, answers a series of questions, but are you telling me there is no verification before the check is sent? 

Mr. SKINNER. That is correct. 

Chairman COLLINS. So this is the pay first, ask questions later 

approach; is that fair? 

Mr. SKINNER. Yes, pay first, verify later; that is absolutely correct. 

Chairman COLLINS. I would like to turn to the issue of payments 

for automobile repairs and replacement. There were some 800 payments for repairs, or I should say there were payments for repair 

or replacement of some 800 automobiles in the county. I find this 

very strange, given the minimal damage; there was not flooding; 

there were not particularly high winds. But there were also issues 

about how the payment amount is arrived at. Could you elaborate 

on that? 

Mr. SKINNER. It is my understanding that this is negotiated between the State and FEMA as to what is a fair value for a car. 

And, in the State of Florida, and I think every State is handled differently, it is not a FEMA standard or a national standard. In the 

State of Florida, I think they determined that, that is the State, 

and FEMA accepted their recommendation, that if any cars needed 

to be replaced that the minimum payment should be around 

$6,500. 

Chairman COLLINS. And is that regardless of what the Blue Book 

value is for the car? 

Mr. SKINNER. That is correct. 

Chairman COLLINS. So you could have and indeed found cases 

where the Blue Book value of the car might have been $2,000, and 

yet, a payment of more than $6,000 was made? 

Mr. SKINNER. Yes, in our sample, we found several cases of that. 

Chairman COLLINS. I would also like to look at one of the specific 

automobile cases that you discuss in your report, because it really 

stood out to me: In this case, FEMA paid $6,500 for a 1998 Toyota 

Corolla that was supposedly destroyed by an electrical fire, and you 

note in the report that the inspector provided no explanation of 

how a hurricane, particularly one that hit 100 miles north, could 

have contributed to an electrical fire. Do we know if the inspector 

ever actually saw this car? 

Mr. SKINNER. Well, in this particular case that you are talking 

about, we did in fact call the former car owner, and that individual 

20

advised us that the car had been towed prior to the inspector’s arrival. So, therefore, the inspector had to rely entirely on her verbal 

representation that yes, I had a car, and yes, it was destroyed 

through an electrical fire, and yes, it has now been discarded. But 

that was not reflected in the inspector’s report. We obtained that 

information by, in fact, talking to the individual. 

Chairman COLLINS. But what happened in this case was that FEMA paid $6,500 to an individual who claimed to have had a car 

that was destroyed by an electrical fire that was somehow related 

to the hurricane, but there was no actual car to inspect; is that accurate? 

Mr. SKINNER. That is correct. 

Chairman COLLINS. So there is no way to know if there ever was 

an electrical fire in this car. 

Mr. SKINNER. That is right. 

Chairman COLLINS. And there is absolutely no way to determine, 

assuming there was an electrical fire in the car, that it had anything to do with the hurricane. 

Mr. SKINNER. That is correct. 

Chairman COLLINS. And yet, this payment was made. 

Mr. SKINNER. Yes, it was. 

Chairman COLLINS. Well, Mr. Skinner, I think you have raised 

an awful lot of concerns, and I really appreciate all the work that 

you and your office have done. I want to just end with one final 

question, and that is in FEMA’s response to your report, FEMA 

suggests that achieving the standards that the IG has said should 

be achieved to protect the taxpayers is unattainable. That is the 

word used by FEMA officials. 

FEMA officials say we are dealing with an emergency situation. 

We are dealing with urgent claims, and it is impossible for us to 

guard against the susceptibility to waste, fraud, and abuse and at 

the same time serve the victims of natural disasters. What is your 

comment on that? 

Mr. SKINNER. I disagree with that. For one thing, the technology 

exists today to allow the inspectors to do a better job, technology 

that did not exist back in the times of Andrew. Second, I think 

every disaster, every scenario, every situation has to be evaluated 

on its own. In Punta Gorda, yes, we had clear evidence that the 

situation was dire so as far as the impact of the storm. 

But as you get out away from the eye of the storm and into the 

marginal counties such as Miami-Dade, the delivery of services, 

yes, we want it to be timely, but we do not want to sacrifice our 

responsibility to be good stewards of the Federal dollar, and people 

were not, in Miami-Dade County, they were not living in tents; 

they were not living in shelters; they did not experience widespread 

trauma. They did have water. They did have electricity. I think we 

could have taken greater caution as we proceeded in providing assistance in that type of an environment. 

Chairman COLLINS. Thank you so much for your excellent testimony. I certainly agree. I think it is a false choice to say that we 

cannot serve the victims of natural disasters effectively, compassionately and swiftly without sacrificing the integrity of this program, and indeed, many of the recommendations that you have 

made would help put in the kinds of controls that would greatly reVerDate 0ct 09 2002 11:22 Dec 09, 2005 Jkt 021819 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 C:\DOCS\21819.TXT SAFFAIRS PsN: PAT
21

1The prepared statement of Mr. Brown appears in the Appendix on page 45. 

duce the potential for the kind of erroneous payments, wasteful 

practices, and indeed, outright fraud that both your auditors and 

our investigators have documented occurred. 

So thank you very much for your testimony, and we look forward 

to working closely with you. 

Mr. SKINNER. Well, thank you, Madam Chairman. 

Chairman COLLINS. Thanks. I would now like to call our next 

witness, Michael D. Brown, the Under Secretary for Emergency 

Preparedness and Response at the Department of Homeland Security. Secretary Brown is responsible for coordinated Federal disaster relief activities, including the implementation of the Federal 

Response Plan. Mr. Brown, we very much appreciate your being 

here today. 

TESTIMONY OF MICHAEL BROWN,1 UNDER SECRETARY FOR 

EMERGENCY PREPAREDNESS AND RESPONSE, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. BROWN. Good morning, Senator, and thank you for having 

me. I certainly do appreciate it. 

I think it is important that we have some perspective of what 

took place that horrible 6 weeks, so in the vernacular, ‘‘roll the 

video.’’

[Video shown.] 

Mr. BROWN. Madam Chairman, that 2004 hurricane season 

marked the busiest season in FEMA’s history. FEMA responded to 

68 declared major and emergency disasters in 2004. Within a span 

of only 6 weeks, four powerful hurricanes struck Florida, producing 

widespread damage and causing terrible destruction and displacement. In response to hurricanes spanning both the East and Gulf 

Coasts, FEMA opened and maintained 27 simultaneous disaster 

field operations in 15 States and two territories. 

We registered nearly 1.7 million people for disaster assistance, a 

record number of open disasters, a record number of registrants. In 

an average year, just to give you some perspective, FEMA only registers 480,000 people. FEMA quickly expanded our capabilities 

across the board to meet those challenges. We hired, trained, and 

fielded thousands of additional phone operators and inspectors as 

well as thousands of additional community relations workers. 

But FEMA does not do its work alone. In each of these disasters, 

we stood shoulder to shoulder with our State partners, our local 

partners, and indeed, even with our Federal partners. We are now 

months removed from the immense and daunting challenges we 

faced during that unusually cruel season, and I want to remind everyone what an extraordinary period we faced. 

FEMA’s response to the hurricanes and the tropical storms last 

year represented the single largest mobilization of emergency response and recovery resources in the history of this country, surpassing even the response to September 11 and the 1994 Northridge earthquake. It was a massive undertaking and a relief operation for which I am exceptionally proud. 

It is imperative that we remember and understand the challenges and the complexities that we confronted. In full situational 

22

context, before anyone attempts to craft new answers and new procedures which may, on their face, seem reasonable but without 

closer and more studied scrutiny will have unintended negative 

consequences. We must never lose the sense of urgency that drives 

our response to victims and communities in need or be forced to 

sacrifice that urgency in the pursuit of elusive administrative perfection. 

Our mission to get help quickly to those who so desperately need 

it must take priority yet be carefully and always balanced with our 

obligation to be stewards of the taxpayer dollars. I personally was 

on the ground in the midst of our response operations, and I was 

able to judge for myself the urgency of the situation. I can assure 

you that FEMA was never stampeded into making any decisions. 

We made informed yet sometimes very difficult choices in order to 

meet the demands of the extraordinary situations created not just 

in Florida but all along the Eastern half of the United States. I just 

want to say publicly that I am proud of FEMA’s employees and 

their accomplishments. 

Senator there is always room for improvement. Our processes 

and procedures are not exceptions to that rule. Many of our programs have been refined and updated over the years. Since 1992, 

when FEMA was very heavily and I think appropriately criticized 

for its slow response to the victims of Hurricane Andrew, the men 

and women of FEMA have pursued and implemented changes, efficiencies, and upgrades through the use of new technologies, faster 

systems, and clearer procedures. During that same time, we have 

also seen the implementation of a brand new program, the Individuals and Households Program, enacted by you in 2000 under the 

Disaster Mitigation Act. 

While I look forward to constructively discussing many ideas for 

these improvements, I want to remind everyone that our processes 

and procedures have been forged over countless disasters, through 

years of experience and have consistently weathered and withstood 

the test of time and repeated trial. We constantly observe and review our responses after every disaster, not only to identify those 

things that we did well and can be proud of but also to identify and 

remediate areas that require our improvement. 

Four hurricanes impacting 15 States in 6 weeks is an exception 

to our normal course of business. Those four hurricanes were an 

anomaly. Yet it is our duty and our mandate to act regardless of 

the situation. You see, we do not have the luxury of dictating the 

conditions under which we operate. It is in that very spirit that I 

look forward to our discussions today. While media and other reports have focused on errors, I would sincerely and respectfully 

suggest that this hearing, in addition to focusing on the errors, also 

focus on the hundreds of thousands of people who did receive assistance and on the thousands of inspectors who successfully conducted hundreds of thousands of inspections all across the affected 

States. 

I simply do not listen to those who suggest that we should pay 

excessive scrutiny to one county or to one group of people affected 

by a disaster and not to others. These storms do not respect geographical boundaries, nor do they respect socioeconomic demoVerDate 0ct 09 2002 11:22 Dec 09, 2005 Jkt 021819 PO 00000 Frm 00026 Fmt 6633 Sfmt 6601 C:\DOCS\21819.TXT SAFFAIRS PsN: PAT
23

graphics that would justify in some people’s mind a higher level of 

scrutiny. 

Unfortunately, I often see competing local agendas. Those with 

political differences sometimes attempt to cloud our mission to deliver aid and to deliver to those who most need our help. While we 

and I personally will always strive to strike a proper and defensible 

balance between timeliness and fiscal surety, you who legislate 

daily know that these decisions that we make are never black and 

white. That is why I have tried to provide some necessary postevent context to serve as a setting for continued discussion of the 

fundamental issues that any large scale event of this type presents. 

Perspective seems to have been lost in the public discussion. 

Early concerns were over reports that Miami-Dade County suffered 

less severe damage from last season’s hurricanes than counties to 

the north, where the eyes of Hurricanes Frances and Jeanne made 

landfall, and that somehow Miami-Dade received seemingly disproportionate Federal assistance. In fact, I think that those concerns led to this inquiry. But to give a thorough understanding of 

FEMA programs and procedures and the differences between our 

individual programs and our government programs, it will become 

clear that many of those early concerns were misguided. 

Early press reports and even reports in this hearing today that 

somehow we should engage in county by county comparisons of 

total outlays will yield faulty results and incorrect conclusions. In 

addition to levels of damage, many factors influence the distribution of Individuals and Households Program assistance, including 

the population, the proportion of insured applicants in counties affected by disasters, and even the income levels. 

Raw comparisons of the aggregate amounts of disaster assistance 

delivered in these counties led to starkly skewed comparisons, 

faulty conclusions and an inaccurate perception. Less than 2.9 percent of the residents in Miami-Dade County received any FEMA 

aid, an amount that I believe is commensurate with the amount of 

damage and proportionally much less than the counties at the eye 

of the hurricanes. 

FEMA responded aggressively and proactively to the needs of all 

affected citizens of the State of Florida who were eligible for assistance. The amount of money spent in one county did not reduce the 

amount of money available to other counties, nor did the money we 

spent in one area reduce levels available in other areas. 

With all of the good that has been accomplished in Florida, we 

know that there was some assistance given incorrectly, through errors of data entry, inspections and, unfortunately, even through 

fraudulent claims. I make no excuse for those errors, Senator. I am 

proud of actually the few errors that have been surfaced out of the 

hundreds of thousands of inspections that were conducted. 

Our overriding priority in a near-catastrophic incident is to get 

help quickly to those who need it desperately while continuing to 

exercise all reasonable diligence over our obligation to continue to 

be outstanding stewards of taxpayer dollars. That will always be 

the balance that FEMA strives to meet: The balance between getting aid quickly, effectively to everyone who needs it and balancing 

the desire to make sure that we are good stewards of taxpayer dollars. That is our mission, Senator. 

24

Again, thank you for having me here today. 

Chairman COLLINS. Thank you very much, Mr. Brown, for your 

statement. 

In response to your opening remarks and the video that you 

played, I want to emphasize to you that the Members of this Committee very much appreciate and recognize the vital role played by 

FEMA in helping the victims of natural disasters. It is because of 

our appreciation for that role that we are particularly concerned 

about what this Committee’s investigation has uncovered. 

The public is perfectly willing, indeed eager, to help the victims 

of natural disasters rebuild their lives and their communities, but 

the public is not willing to see patterns of abuse, wasteful spending, outright fraud, erroneous payments, and that undermines public support for providing that assistance, and that is why this is of 

great concern to me. 

If the public feels that millions of dollars are wasted, they are 

going to be far less likely to support the appropriation of additional 

funds to help people in future disasters. And that is why this Committee, which has new oversight responsibility for FEMA, is conducting this investigation. 

In your comments, you said that focusing on one county, MiamiDade in this case, as the Committee’s major focus has been, results 

in faulty results and incorrect conclusions. Yet the Inspector General said that the systemic weaknesses and the lack of controls 

that his audit identified could be applied beyond Miami-Dade and, 

in fact, characterized the provision of assistance in general. Do you 

disagree with that finding? 

Mr. BROWN. The extrapolation of things that were found in 

Miami-Dade to other areas of the State, particularly areas of the 

State that were particularly hard hit, I think does draw incorrect 

conclusions. The reason for that is this: It is very easy for an inspector to make a determination when he looks at a home and all 

that is there is a foundation. It is more difficult for an inspector 

to make a determination of what has really occurred in those marginal areas where it is more difficult to discern, and you have to 

use judgment as to exactly what occurred, particularly when you 

are making those discerning kinds of judgments in housing stock 

that is old and decrepit and—by our standards, by the standards 

you and I would want to live in—is certainly substandard. 

And so, to draw the conclusions from those kinds of inspections 

to all of the programs throughout all of the country, and the State 

in this case, I think is an incorrect extrapolation. 

Chairman COLLINS. Well, let me give you a specific example that 

the Inspector General identified as an inappropriate process that 

leads to overpayments. He told us that FEMA inspectors, when 

they are evaluating a spare bedroom, for example, evaluate it as 

if it has two twin beds, a chest of drawers, a nightstand, a lamp; 

in other words, as if it is fully furnished, even if that bedroom, in 

fact, only contained a single bed. If that is being done in general, 

why does that not produce overpayments everywhere that procedure is applied and not just in Miami-Dade? 

Mr. BROWN. That is actually an excellent question, and the reason for it is because in most areas it is safe to assume that in the 

destroyed home that you see—that is the typical middle class 

25

home—it is easy to make the assumption that yes, there is that 

property in the structure. It is more difficult to make that judgment—and I agree with you. I think in those marginal areas, we 

do need to tighten that up. And so, if there is a way that we can 

do that tightening up so that in the marginal areas that are not 

as clear-cut as the destroyed typical middle class home, then, I am 

willing to do that, and I think that we should do that. But to draw 

the extrapolation that because we found a situation in one county 

that may have an unusual situation and extrapolate that to all inspections done all across the State, I do think that is incorrect. 

Chairman COLLINS. Do you think that FEMA should be paying 

for furniture that does not exist? 

Mr. BROWN. We should not be paying for anything that does not 

exist. 

Chairman COLLINS. Well, is that not what happened? 

Mr. BROWN. But Congress told us that we would. But it does in 

those very marginal cases. And I would like to eliminate those 

marginal cases. 

Chairman COLLINS. If you are using a generic room approach, 

you are paying for furniture that does not exist. 

Mr. BROWN. That is correct, and I do believe we need to tighten 

that up in those marginal cases. That is the balancing act that I 

talk about. We should not require an inspector that is in a neighborhood that you and I could look at and say, it is reasonable to 

assume that there was the typical furniture in that home, and that 

home is now demolished; I do not think that either one of us want 

to be in a position where we are going to delay assistance to that 

individual while they go out and somehow prove to us that they 

had a nightstand or two nightstands and a king-size bed versus a 

double bed. 

I do not think we want to get into that kind of discriminatory, 

discerning type of practices. I do agree with you, though, that the 

other side of the balance is to try to figure out a way where it is 

in those very marginal cases, how do we in fact do that determination without slowing down the aid so much that that victim who 

really does need our assistance is now waiting 2, 4, 5, or 7 days 

for that assistance? That is the balance we are trying to find. 

Chairman COLLINS. Do you think FEMA inspectors should be 

okaying payments for automobiles that have been towed away and 

cannot be inspected? 

Mr. BROWN. I knew you would ask me about that particular example, and that is a tough example. I was not there, and I did not 

see, I did not talk to that individual like I would talk to you right 

now and read your body language and check your sincerity and understand the whole totality of circumstances of what that inspector 

is seeing on the ground. 

We have to give the inspectors some latitude to recognize that 

people’s lives have been upended. They are at the worst point in 

probably their entire lives about how to make a decision. You take 

a single mother in Miami-Dade County who maybe relied upon that 

Opel Cadet to get her kids to school or to get to work maybe two 

or three jobs that she is working. That inspector has to make a 

judgment call. 

26

Yes, we negotiated with the State under the IHP program before 

we went into the disaster about what we would pay. Our goal is 

to get that single mother transportation, not to give her $250 or 

$450 or $2,000 to meet the Blue Book value of her car but to give 

her reimbursement for the transportation so she can make the decision, get another vehicle, return to work, get those kids back to 

school. That is the judgment that those inspectors make in the 

field. 

Chairman COLLINS. Mr. Brown, do you disagree with Florida officials who said that the damage from Hurricane Frances in MiamiDade County was minimal? Do you disagree with the Weather 

Service assessment that there was no flooding? 

Mr. BROWN. It is not a matter whether I disagree or not. It is 

what the facts are. The facts are this, Senator: The private insurance companies, who have a vested interest in not paying out 

claims to the extent that they do not have to have to date paid out 

$60 million in property damage claims to Miami-Dade County. 

There was damage in Miami-Dade County. We have also had requests from the County of Miami-Dade for reimbursement of both 

emergency protective measures and for debris removal. We have 

paid over $700,000 in Miami-Dade County for debris removal. So 

all of the premises that so many people have started from that we 

paid for things in Miami-Dade when the hurricane did not get 

there, and there was no damage, is just incorrect. 

Chairman COLLINS. Well, we all know that insurance claims 

cover a far broader array of damages than FEMA assistance. 

Mr. BROWN. And that is why I focused——

Chairman COLLINS. That is totally different. You can have an insurance claim for minor flooding in your cellar as a result of a 

thunderstorm. We are talking about a hurricane. 

Mr. BROWN. That is correct, and hurricane bands can produce 

tornadoes. If you are living in substandard housing, sustained 

winds of 59 miles an hour can make your home uninhabitable. And 

so, we should not pick on the people of those neighborhoods because they live in unfortunate, substandard housing, and they do 

not have insurance. We should not pick on them because of that. 

In Miami-Dade County, the Governor had already ordered a 

mandatory evacuation. I tried to get into Miami International Airport. It was closed. There were severe rains. There were severe 

thunderstorms. Frances was still making landfall. This is one of 

the slowest hurricanes that we have seen in the history of this 

country. We did not know which direction she was going to turn 

or what to do. We made the absolute right call in declaring MiamiDade, because it is my honest and sincere opinion that had we not 

added Miami-Dade County on to the President’s disaster declaration, I would have been hauled up here and been asked why did 

I not provide aid to those people and those neighborhoods where 

those tropical force winds either caused damage or caused them to 

suffer. 

Chairman COLLINS. The Presidential declaration said that a preliminary damage assessment should be done before Miami-Dade 

County was added. Why was that not done? 

Mr. BROWN. If I may, I believe that the Inspector General is just 

wrong in that regard. The President’s letter, and I want to quote 

27

1The letter referred to appears in the report entitled ‘‘Audit of FEMA’s Individuals and 

Households Program in Miami-Dade County, Florida, for Hurricane Frances,’’ Department of 

Homeland Security, Office of Inspector General, Office of Audits, OIH–05–20, May 2005, on page 

34. 2 Exhibit No. 5, a chart entitled ‘‘Errors Found Through Quality Control Inspections Conducted by PB (389 QC Inspections Total)’’ appears in the Appendix on page 75

it verbatim—I got the wrong page up. I am sorry. The letter is addressed to me.1 ‘‘You are authorized to provide individual assistance in the designated areas, assistance for debris removal and 

emergency protective measures (Category A and B) under the Public Assistance Program in all counties in the State and Hazard 

Mitigation statewide, and any other forms of assistance under the 

Stafford Act you deem appropriate subject to completion of Preliminary Damage Assessments.’’

Chairman COLLINS. Subject to the completion of a PDA. 

Mr. BROWN. Any other assistance other than Categories A and 

B, which under the FEMA programs would be Categories C 

through G. If I wanted to provide any of those categories of assistance, the President said before you add those counties and provide 

that kind of assistance, you must do PDAs. A and B were the exception. That is the way FEMA has always operated. 

Chairman COLLINS. In your written statement, you say, ‘‘In normal circumstances, some of the quality control problems we saw in 

Florida would be unacceptable. Given the context, complexity, and 

enormity of our operations, their results were far more commendable.’’ I would like to refer you to Exhibit No. 5,2 in the exhibit 

book on the table. If we could have the exhibit put up. This exhibit, 

as you can see, is entitled Errors Found through Quality Control 

Inspections Conducted by Parsons-Brickerhoff. This chart shows a 

37 percent error rate on personal property inspections conducted in 

Miami-Dade and an 18.5 percent error rate on the home unsafe determinations, a 16 percent error rate on furnishings, 16 percent on 

clothing and 11.5 on willingness to relocate. Are these the kinds of 

quality control results that you view as ‘‘commendable’’? 

Mr. BROWN. Yes, and can I explain why? 

Chairman COLLINS. Yes, this is very interesting. 

Mr. BROWN. We have within our contracts, which are currently 

under review to renew, an extraordinarily tight quality control 

process. So within that 37 percent that you see on personal property errors, there is a list of 65 different items that the quality control people go through and actually nitpick, if I can use that word. 

They are trying to find errors not just substance but in procedure, 

in the way the inspector actually dealt with the applicant, things 

such as did the inspector arrive on time, was the inspector friendly. 

And so, those kind of things are categorized so that we can take 

every single one of those 65 items and improve that particular inspector’s quality of inspection. So I am not surprised, as long as 

that 37 percent does not translate into some figure that is an outrageous amount of money that has gone out that should not that 

we have to now go recoup, that 37 percent figure does not mean 

anything to me other than that the quality control process was 

working, and they were doing what they had to do to make that 

procedure even better. 

28

1 Exhibit No. 9, ‘‘IHP Daily QC Report’’ appears in the Appendix on page 76. 

I do not think we can take—what I am trying to drive at is that 

you cannot take that particular figure and drive that percentage to 

an amount of money that we have to recoup. 

Chairman COLLINS. This is a sampling. To me, it is an alarming 

sampling. Let me show you some of what we found in our investigation. I would like to refer you to Exhibit No. 9 in the book.1

This is a quality control report. Do you see on the far right, the 

level of damage done? None? We found this over and over again, 

and yet, in this, thousands of dollars were paid out to individual 

claimants. The quality control report points out that there was 

money provided to repair a dryer. There is no dryer. 

And this is not just a single example. We have many examples. 

Mr. BROWN. And I recognize that in the course of responding to 

these disasters which, again, just let me give you a little perspective. Take an average, well, there is no average disaster. I have 

made it a philosophy of mine when I get asked by the news media, 

well, how does this compare to where you were 2 days ago, I just 

do not compare one county to another or one State to another. 

But if you take just some of the disasters that FEMA has dealt 

with during my tenure, let us take the California wildfires, for example. In the California wildfires, we did 23,398 inspections. In 

Florida, we did—are you ready for this?—885,744 inspections. That 

is how much we had to ramp up. So there is no question in my 

mind that this Committee, the press, myself, my staff, all of us can 

find documents like this that are going to show where errors were 

made. 

That is not acceptable to me. I want to clean that up. I want to 

fix that process. But to extrapolate from that and say that the 

quality control process that we have in place which is designed to 

find these errors is broken I think is incorrect. 

Chairman COLLINS. Well, let us talk about the inspection process. FEMA asked each of its contractors to perform 15,000 inspections per day, which is double the maximum number that they 

were required to perform under the contracts. When FEMA took 

this step, did you realize that meant that the contractors were 

going to have to hire thousands of new inspectors? 

Mr. BROWN. I did, and if I can describe the choice that I have 

to make as the leader of this organization, the choice is this: Florida and these other States have been hit with a near catastrophic 

event. It is not unlike what a terrorist could have done if a terrorist had been trying to do something. So I make the determination that in trying to reach this balance, I can do one of two things: 

I can either stop all inspections such as was done in the 1994 

Northridge earthquake and just pay money out based on ZIP 

Codes, or I can ramp up, work with the contractors, do everything 

I can trying to be a good steward of the taxpayer dollars and get 

eyes on every claim. 

My objective was to get eyes on every claim made and not pay 

things out by ZIP Code. So when you are doing 885,000 inspections, 

there are going to be errors. I want to clean those up, but I still 

believe I made the right decision for the taxpayers and the disaster 

29

victims of continuing to get aid out to them but not do it on a blanket basis like was done in 1994 on a ZIP Code basis. 

Chairman COLLINS. Are you aware that FEMA’s preliminary 

analysis of inspector error rates for all of the Florida disasters 

shows that new inspectors have an error rate of more than three 

times that of experienced inspectors? 

Mr. BROWN. I do, and in fact, if you look specifically at MiamiDade County, which is the impetus for this investigation, you look 

at the—it is 50-some experienced inspectors had an error rate of 

something under 2 percent, and the inexperienced inspectors had 

an error rate somewhere close to 9 percent, 9.8 or something, I believe it was, 9.2. 

I think what that shows is of those 2,000 inspectors, additional 

inspectors that we brought on, some of the companies did an excellent job of training them and educating them and limiting what 

they were able to do until they gained experience. They had kind 

of an algorithm built in so that a new inspector would go out with 

another inspector. They would only allow them to do five inspections, bring them back in, check their work, see if they are ready 

to go back out again; maybe do some more. So we did make that 

decision to ramp up the inspections, which we knew would cause 

a higher error rate, but we knew in the long run, that was still the 

more prudent thing to do to continue to get assistance out as quickly as possible. 

Chairman COLLINS. Are you aware that inspectors were deployed 

to the field before their background checks were completed? 

Mr. BROWN. I am not aware that they were deployed before the 

background checks were completed. I am aware that background 

checks are required. 

Chairman COLLINS. Are you aware that several of the inspectors 

had to be removed because they had serious criminal records? 

Mr. BROWN. I am aware that there were some that were removed. We found some on our own that we removed for various 

reasons, and I do not believe that—and while that is not acceptable 

to me, I mean, I would prefer to have everyone with a perfect background, I think it is also unfortunate that we lump in some of 

these folks that maybe had a DUI or maybe had a misdemeanor 

of some sort that have paid their debt to society, went out and conducted the inspections and that we have had, again, almost a million inspections done and no complaints about anyone with a criminal background doing anything improper. 

Chairman COLLINS. No complaints, so those inspection forms 

where the quality control inspector later found that there was absolutely no damage, you do not think that suggests there was a problem with the inspector who did the original assessment? 

Mr. BROWN. No complaints from those that received the inspection, no complaints from the victims. 

Chairman COLLINS. Well, I am not surprised that the victims did 

not complain. They got checks even though their homes were 

undamaged. In fact, there is an amazing document attached to one 

of the quality control reports where it says the applicant called in 

to find out what is the check to be used for? This is a case where 

there was no damage. 

30

Mr. BROWN. Senator, again, with all due respect, that is not acceptable to me. We want to tighten those up, and we want to fix 

those. We have found examples of that where we tried to fix it. 

Again, if I put it in the context of what the choice is that we make, 

we all have choices to make, and in this case, the choice was ramp 

up the inspections, try to get as many out there so I have eyes on 

every claim, or just do the blanket ZIP Code. I refuse to do the latter. 

Chairman COLLINS. Well, I do not think those are the only 

choices. I agree with you that you made the right decision in not 

doing the ZIP Code approach, but I think we could do a lot better. 

To go back to my generic room example, those problems were first 

identified back in 1991 by an IG report, and yet, FEMA is still 

using that approach. I realize that was long before you became 

head of the agency. 

Mr. BROWN. But that report also recognized that while that approach had flaws, the IG report from Hurricane Andrew also told 

us to continue to try to find the quickest, the most efficient approach that would get the money out the fastest to individuals. 

That is the competing interest that we still fight. 

Chairman COLLINS. See, this is where you and I have a fundamental disagreement. I do not think there is a tradeoff between responsive, swift assistance to those who are truly victims and protecting taxpayers against waste, fraud, and abuse. I think we can 

do both, and I think we greatly improve the chances of doing both 

by implementing procedures and safeguards that will ensure that 

the money is well spent and by having a system of checks and balances and quality control that would greatly reduce the possibility 

of erroneous payments or outright fraud. And I do not see this 

tradeoff. I think it is a false choice. 

Mr. BROWN. But may I explain? Because I think whatever the exhibit was that showed the graphs with the error rates, that shows 

that the quality control system does work. And ironically, it works 

both ways. We have found—we are in the process right now in 

Florida of recouping money from individuals that through our quality control process, we found should not have gone to those people. 

Now, I would like to tighten that up even more so that at some 

point, we can narrow that down to where we actually know that 

before the check goes out, granted. But that quality control process 

also finds people where the inspectors made the error on the side 

of the taxpayers, where they were actually eligible for more money 

that we did not get them. So I think that shows that the quality 

control process gets, and what you and I are discussing is how can 

we make that quality control process meet both objectives? How 

can we have a quality control process that allows us to get eligible 

victims the money that they deserve that you tell us as Congress 

we have to give them under the law and at the same time do it 

in a manner that is fast and efficient so that the taxpayers then 

do not lose confidence in FEMA because getting the assistance to 

people takes so long to get it to them. That is the balance we are 

trying to get to. 

Chairman COLLINS. Let me give you another very concrete example: FEMA, in the midst of all these hurricanes, which were putting enormous strains on your resources——

31

Mr. BROWN. Absolutely. 

Chairman COLLINS [continuing]. Decided to take steps to expedite inspections by introducing some new guidelines. These guidelines, inspectors have told us, created a great deal of confusion on 

what the standards were, but they also had another consequence. 

The change in the guidelines, contractors have told us, forced them 

to disable their error checking software. So here is a key safeguard 

built into the system to catch errors, but because of the change in 

guidelines in the midst of trying to handle all of these hurricanes, 

that safeguard was taken away. 

Mr. BROWN. That troubles me, but again, let me put it in perspective: It was one level of safeguards taken out. It did not take 

away all of the safeguards. It did not take, for example, the edit 

check away from the Palm Pilot that the inspector actually used in 

the field. It was down the road that it took one level out. The other 

checks remained in place. 

Chairman COLLINS. It is yet another example of a safeguard that 

was not in place. That is the problem. 

Mr. BROWN. But what I do not want the public or the taxpayers 

to take from that statement is that all safeguards were then taken 

away. 

Chairman COLLINS. No, but——

Mr. BROWN. It was one level of safeguard that, yes, did go away. 

Chairman COLLINS. That would have picked up some of the errors. And keep in mind some of the mistakes are mistakes. There 

are errors. We have other examples of outright fraud. We have 

examples when you were talking about the inspectors. We have examples of inspectors who have been referred to the Office of Inspector General’s criminal investigators because they did no inspections. They never showed up at the houses. They just filled out the 

forms. 

Mr. BROWN. And in fact, some of those inspectors were actually 

found by our own quality check system. 

Chairman COLLINS. I would say that is a pretty serious problem 

with inspectors when you are saying——

Mr. BROWN. Senator, I do not disagree with you. The fact that 

we have an inspector who goes out to Burger King and tells people 

to come by and let me fill out the forms while you are sitting in 

the Burger King is totally unacceptable to me. But in the context 

of 7,000 inspectors, do we want to get—I do not think we will realistically ever get to the point where there are no inspector errors 

or there are no inspectors or individuals, for that matter, receiving 

our assistance who are not going to try to cheat us. 

So we have to make certain that we have the right kinds of proper safeguards in place. I think that sometimes, the examples which 

are egregious, unacceptable to me, they are frankly outrageous; 

they are just outrageous to me, sometimes causes us to lose sight 

of those safeguards that are in place that allow my team to actually identify an inspector like that and turn him over to the Inspector General. 

Chairman COLLINS. Do the FEMA claim forms have any kind of 

warning on them to the claimant that false claims will be prosecuted? 

32

Mr. BROWN. Yes, it is no different than many other government 

forms that require when you do self-verification that you do it 

under penalty of perjury, that you do it, that you have told the 

truth; it has all of those things on there. 

Chairman COLLINS. I want to turn now to the issue of rental assistance. As I indicated earlier, more than $9 million was spent on 

rental assistance in Miami-Dade. That is close to a third of the 

money that was spent. Do you know how much of that money was 

actually spent to rent alternative accommodations? 

Mr. BROWN. We do not, and I think that is one area where we 

can make some improvement. If you look at the 1992 Inspector 

General’s report, it recognized both the validity and the importance 

of this rental assistance, particularly when it is in the expedited 

assistance format, and they recommended that we cut that back to 

2 months. In this case, we actually cut it back to 1 month. It is 

only when we go into the second or third months of that expedited 

assistance that we actually do the verification of the first month, 

did you actually spend it on that, and I think that is an area where 

we need to tighten that up. I do not want to get rid of the expedited assistance program, and I would also like to tighten up the 

rental assistance programs so we can do more verifications of that. 

Chairman COLLINS. The Inspector General points out that some 

4,300 applicants who received rental assistance did not indicate 

any need for shelter at the time that they registered. The IG also 

told us that he believes rental assistance must actually be spent on 

rent, as he memorably said, that is why it is called rental assistance. 

Mr. BROWN. Right. 

Chairman COLLINS. Do you agree with that? 

Mr. BROWN. Absolutely, but what is rent? Rent is a motel. It 

could be a camper-trailer that you found that someone is going to 

let you live in for awhile. Sometimes, these are dire straits, and 

they find whatever they can to rent. I do not want that condition, 

though, to negate the fact that I agree with you: We need to have 

a better way of verifying that rental assistance while at the same 

time making sure that people who have the need to be able to get 

into a motel or an apartment or whatever that they are indeed able 

to do that. 

Chairman COLLINS. The reason I ask is you have said, ‘‘seeking 

other accommodations and residing elsewhere are not eligibility criteria for receiving rental assistance.’’ You can see why that statement would puzzle me. 

Mr. BROWN. Right. 

Chairman COLLINS. So you do believe that it is supposed to be 

used for rent. 

Mr. BROWN. Yes, but again, not to belabor the point, it can take 

many forms. It could be that they find some guy who has got four 

or five camper-trailers, and yes, I know you have lost your home, 

or you cannot live in your home for whatever reason, and I will 

rent that to you for awhile. Sure. 

Chairman COLLINS. Mr. Brown, let me just ask you one final 

question, and that is to go back to the declaration process. I want 

to read you a quote from a memorandum submitted by a FEMA 

employee. Clay Hale is his name. He said, ‘‘the most significant 

33

change that would reduce the amount of inappropriate assistance 

would be to improve the declaration process.’’ Do you agree with 

that? 

Mr. BROWN. I cannot agree or disagree with that. I do not know 

in what context he says that, what he means by improving or 

changing the declaration—I just do not know what he means, Senator, with all due respect. 

Chairman COLLINS. Well, I guess, then, my final question to you 

will be this: What do you think should be done to better administer 

disaster relief so that we do not have the high incidence of erroneous payments, fraudulent claims, wasteful spending that certainly appears supported by the evidence with regard to MiamiDade County? 

Mr. BROWN. Every year, every single year in every disaster, because we do play this balancing act, FEMA ends up recouping 

money from individuals who received money that they should not 

have received or received more money than they should have received. 

We also make, through our quality control process, checks where 

people end up receiving money that they should have received that 

they did not receive. And so we have to, after every disaster go 

through and try to find ways that we can tighten up and improve 

our processes. And to give you just very briefly without going into 

all the details, because I do not want to bore you with those; we 

will put those in the record, some of the things that we are doing: 

We are trying to better define the contract for developing our communications strategy so that county commissioners, for example, 

better understand what they are getting money for. 

We want to standardize the PDA process so that the whole desire 

of doing PDAs, that we have standardized processes for different 

ways of doing PDAs. We want to develop clear standard operating 

procedures for interim shelter and necessary support resources; develop comprehensive new management plans for the direct housing 

opportunities that we pay for. We want to upgrade our technology. 

We think that with as fast as technology is improving, there are 

certainly ways that we can do to speed the amount of information 

that we get in the field and to verify that information. 

We want to develop some threshold matrices to activate the 

surge registration intake capabilities. In other words, when we 

have to ramp up to something where we are typically doing 

480,000 registrations a year, and suddenly, we have to do 1.2 million to 1.7 million registrations because of an unusual event, we 

want to develop the protocols in advance for doing that. 

We want to take the recommendations the IG had. If you read 

my response to the IG report, many of those recommendations, we 

have already started implementing. Some, we want to sit down obviously and have further discussions, but many of those things we 

are already doing and want to implement. 

Chairman COLLINS. I appreciate your testimony here today. It is 

my conclusion that a great deal of work remains to be done to ensure that in our efforts to deliver swift, compassionate assistance 

to the disaster victims that we do not compromise the taxpayers’ 

money. I am very concerned about the integrity of this program, 

and I believe that if we do not take steps to greatly reduce the 

34

kinds of problems that the Inspector General and this Committee’s 

investigations revealed that public support for disaster relief will 

be diminished, and I know that we share a common goal of making 

sure that disaster victims are served compassionately and quickly. 

I hope we also share the common goal of making sure that taxpayers’ money is not wasted. 

Mr. BROWN. Senator, we share both of those goals. My pledge to 

you is that we will continue to work with you and the Committee 

to implement recommendations to find ways that we can meet both 

of those goals. 

Chairman COLLINS. Thank you. 

The hearing record will remain open for 15 days. I want to thank 

all of our witnesses today as well as the staff for their work. This 

hearing is now adjourned. 

[Whereupon, at 11:29 a.m., the Committee adjourned.] 

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