I 
109TH CONGRESS 
2D SESSION 
H. R. 5943 
To amend the Homeland Security Act of 2002 to prevent waste, fraud, 
and abuse in emergency assistance programs administered by the Depart-
ment of Homeland Security. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 27, 2006 
Mr. MCCAUL of Texas (for himself, Mr. KING of New York, Mr. ROGERS of 
Alabama, Mr. REICHERT, Mr. POE, and Mr. JINDAL) introduced the fol-
lowing bill; which was referred to the Committee on Homeland Security, 
and in addition to the Committee on Transportation and Infrastructure, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of the 
committee concerned 
A BILL 
To amend the Homeland Security Act of 2002 to prevent 
waste, fraud, and abuse in emergency assistance pro-
grams administered by the Department of Homeland 
Security. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Fraud Accountability 
in Emergency Response Act of 2006’’. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
SEC. 2. PREVENTING WASTE, FRAUD, AND ABUSE IN FED-
ERAL EMERGENCY ASSISTANCE PROGRAMS. 
(a) TABLE OF CONTENTS.—The table of contents in 
section 1(b) of the Homeland Security Act of 2002 (116 
Stat. 2135) is amended by adding at the end of the items 
relating to title V the following: 
‘‘Sec. 512. Waste, fraud, and abuse controls. 
‘‘Sec. 513. System to record and track assistance. 
‘‘Sec. 514. Restrictions on debit cards. 
‘‘Sec. 515. Monitoring of Department contracting. 
‘‘Sec. 516. Small business database for Federal contracting related to major 
disaster and emergency assistance activities. 
‘‘Sec. 517. Fraud prevention training program. 
‘‘Sec. 518. Prenegotiated contracts for delivery of goods and services after 
emergencies.’’. 
(b) 
FEDERAL
EMERGENCY
ASSISTANCE
PRO-
GRAMS.—Title V of such Act (6 U.S.C. 311 et seq.) is 
amended by adding at the end the following: 
‘‘SEC. 512. WASTE, FRAUD, AND ABUSE CONTROLS. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Director of the Federal Emergency Management 
Agency, shall ensure that— 
‘‘(1) all programs within the Agency admin-
istering Federal assistance develop and maintain 
proper internal management controls to prevent and 
detect waste, fraud, and abuse; 
‘‘(2) application databases used by the Agency 
to collect information on eligible recipients must 
record disbursements; 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(3) such tracking is designed to highlight and 
identify ineligible applications; and 
‘‘(4) the databases used to collect information 
from applications for such assistance must be inte-
grated with the disbursements and payment records. 
‘‘(b) AUDITS AND REVIEWS REQUIRED.—The Sec-
retary shall ensure that any existing database or similar 
application processing system in effect on the date of en-
actment of this section for Federal assistance programs 
administered by the Department undergoes a review by 
the Inspector General of the Department to determine the 
existence and implementation of the internal controls re-
quired under this section, before the database application 
may be used to determine eligibility and disbursement of 
Federal assistance. 
‘‘(c) CERTIFICATION
REQUIRED.—The Secretary, 
acting through the Director of the Federal Emergency 
Management Agency, shall certify to Congress on an an-
nual basis that the internal controls required under this 
section are in place and operational before a database or 
similar application processing system may be used to dis-
burse Federal assistance. 
‘‘(d) REPORT TO CONGRESS.—Recommendations or 
findings that remain unresolved between program admin-
istrators and the Inspector General of the Department for 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
30 days must be immediately reported to Congress by the 
Inspector General. 
‘‘SEC. 513. SYSTEM TO RECORD AND TRACK ASSISTANCE. 
‘‘(a) ESTABLISHMENT.—The Director of the Federal 
Emergency Management Agency shall establish and imple-
ment a system for recording and tracking all monetary 
and other benefits disbursed by the Agency to eligible per-
sons. 
‘‘(b) ELEMENTS.—In establishing the system, the Di-
rector shall ensure that— 
‘‘(1) each person applying to the Agency for 
monetary or other benefits is assigned a permanent 
and traceable registration number; 
‘‘(2) the registration number of the person is 
maintained by the Agency in a database that records 
and tracks all monetary and other benefits disbursed 
by the Agency to the person; and 
‘‘(3) the database is designed to detect and re-
ject, as appropriate, requests by the person to the 
Agency for— 
‘‘(A) duplicate disbursement of monetary 
or other benefits; and 
‘‘(B) disbursement of monetary or other 
benefits for which the person is not eligible. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘SEC. 514. RESTRICTIONS ON DEBIT CARDS. 
‘‘(a) IN GENERAL.—If the Director of the Federal 
Emergency Management Agency uses debit cards as a 
means of distributing major disaster and emergency as-
sistance to persons, the Director shall ensure that the 
cards are equipped with an electronic feature based on 
current technology that prohibits the use of the cards for 
ineligible expenses, as designated by the Director. 
‘‘(b) INELIGIBLE EXPENSES.—Ineligible expenses to 
be designated by the Director under subsection (a) shall 
include the purchase of alcohol and cigarettes and the pur-
chase of any good or service from a commercial establish-
ment engaged in adult entertainment, gambling, or the 
sale of pawned goods. 
‘‘SEC. 515. MONITORING OF DEPARTMENT CONTRACTING. 
‘‘To the extent practicable, the Inspector General of 
the Department shall continue to monitor, and make rec-
ommendations relating to, the contracting process of the 
Department to prevent waste, fraud, and abuse. 
‘‘SEC. 516. SMALL BUSINESS DATABASE FOR FEDERAL CON-
TRACTING RELATED TO MAJOR DISASTER 
AND EMERGENCY ASSISTANCE ACTIVITIES. 
‘‘(a) ESTABLISHMENT
OF DATABASE.—The Sec-
retary, acting through the Director of the Federal Emer-
gency Management Agency, shall establish and maintain 
a database that contains information about small business 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
entities for purposes of Federal contracting relating to as-
sistance activities conducted in response to and recovery 
from acts of terrorism, natural disasters, and other emer-
gencies. 
‘‘(b) INCLUDED INFORMATION.—The database under 
subsection (a) shall include the following information 
about each small business entity included in the database: 
‘‘(1) The name of the small business entity. 
‘‘(2) The location of the small business entity. 
‘‘(3) The area served by the small business enti-
ty. 
‘‘(4) The type of good or service provided by 
the small business entity. 
‘‘(5) Whether the small business entity is— 
‘‘(A) a small business entity owned and 
controlled by socially and economically dis-
advantaged individuals; 
‘‘(B) a small business entity owned and 
controlled by women; or 
‘‘(C) a small business entity owned and 
controlled by service-disabled veterans. 
‘‘(c) SOURCE OF INFORMATION.— 
‘‘(1) SUBMISSION.—The database may only 
contain such information about a small business en-
tity as is submitted by the small business entity. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(2) ATTESTATION.—Each small business enti-
ty submitting information to the database shall sub-
mit— 
‘‘(A) an attestation that the information 
submitted is true; and 
‘‘(B) documentation supporting such attes-
tation. 
‘‘(3) VERIFICATION.—The Secretary shall verify 
only that the documentation submitted by each small 
business entity supports the information submitted 
by that small business entity. 
‘‘(d) AVAILABILITY OF DATABASE.—The Secretary 
shall make the database generally available on the Internet 
website of the Department. 
‘‘(e) CONSULTATION OF DATABASE.—Before award-
ing a Federal contract for a disaster-related activity, a 
component of the Department shall consult the database 
established under this section. 
‘‘(f) DATABASE INTEGRATION.—The Secretary shall 
integrate the database established under this section into 
any other procurement-related database maintained by the 
Secretary. 
‘‘(g) DEFINITIONS.—For purposes of this section, the 
terms ‘small business entity’, ‘small business entity owned 
and controlled by socially and economically disadvantaged 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
individuals’, ‘small business entity owned and controlled 
by women’, and ‘small business entity owned and con-
trolled by service-disabled veterans’ shall have the mean-
ings given the terms ‘small business concern’, ‘small busi-
ness concern owned and controlled by socially and eco-
nomically disadvantaged individuals’, ‘small business con-
cern owned and controlled by women’, and ‘small business 
concern owned and controlled by service-disabled veterans’ 
respectively under the Small Business Act (15 U.S.C. 631 
et seq.). 
‘‘SEC. 517. FRAUD PREVENTION TRAINING PROGRAM. 
‘‘(a) TRAINING PROGRAM REQUIRED.—The Sec-
retary, acting through the Director of the Federal Emer-
gency Management Agency, shall develop and implement 
a program to provide training on the prevention of waste, 
fraud, and abuse of Federal assistance funds and services 
during the response to or recovery from acts of terrorism, 
natural disasters, or other emergencies and ways to iden-
tify such potential waste, fraud, and abuse. 
‘‘(b) INDIVIDUALS ELIGIBLE FOR TRAINING.—Under 
the training program required under subsection (a), the 
Secretary may provide training to— 
‘‘(1) employees, contractors, and volunteers of 
the Federal Government; 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(2) employees and volunteers of any State, 
local, or tribal government entity; and 
‘‘(3) employees and volunteers of nonprofit or-
ganizations that assist in the administration of Fed-
eral assistance funds and services provided in re-
sponse to acts of terrorism, natural disasters, or 
other national emergencies. 
‘‘(c) INFORMATION SHARING.—Any State, local, or 
tribal government entity or nonprofit entity that provides 
Federal assistance funds or services to individuals affected 
by acts of terrorism, natural disasters, or other emer-
gencies may share information with the Federal Govern-
ment, in a manner consistent with the privacy protections 
provided under section 552a of title 5, United States Code, 
about any recipient of such assistance, at the request of 
the head of a Federal department or agency, for the pur-
pose of preventing fraud and abuse of Federal assistance. 
‘‘SEC. 518. PRENEGOTIATED CONTRACTS FOR DELIVERY OF 
GOODS AND SERVICES AFTER EMERGENCIES. 
‘‘(a) IN GENERAL.—The Director of the Federal 
Emergency Management Agency may enter into contracts 
for the delivery of necessary goods or services relating to 
the response to or recovery from acts of terrorism, natural 
disasters, or other emergencies. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(b) NECESSARY GOODS AND SERVICES.—The nec-
essary goods and services referred to in subsection (a) in-
clude the following: 
‘‘(1) Debris removal and other disaster clean-up 
needs. 
‘‘(2) The provision of food, water, ice, and first 
aid supplies. 
‘‘(3) Meals-ready-to-eat. 
‘‘(c) PREFERENCE FOR CONTRACTS WITH SMALL 
BUSINESSES.—To the greatest extent practicable, in en-
tering into a contract under subsection (a), the Director 
shall give a preference to a small business entity, as that 
term is defined in section 516. 
‘‘(d) COMPETITIVE PROCEDURES.—In entering into 
a contract under this section, the Director shall use com-
petitive procedures, to the maximum extent practicable, 
except as otherwise provided by law. 
‘‘(e) CONSULTATION WITH OTHER FEDERAL DE-
PARTMENTS AND AGENCIES.—The Director shall consult 
with the head of a Federal department or agency with re-
spect to any contract entered into by the head of such 
department or agency using funds made available for pre-
paredness, mitigation, response, and recovery with respect 
to acts of terrorism, natural disasters, and other emer-
gencies.’’. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
SEC. 3. ASSESSMENT AND REPORT REGARDING UTILIZA-
TION OF INDEPENDENT PRIVATE SECTOR IN-
SPECTORS GENERAL. 
(a) IN GENERAL.—The Director of the Federal 
Emergency Management Agency, in consultation with the 
Under Secretary for Management, shall— 
(1) assess the role that independent private sec-
tor 
inspectors 
general 
(popularly 
known 
as 
‘‘IPSIGs’’) played in preventing waste, fraud, and 
abuse in contracts for goods or services purchased or 
commissioned after the terrorist attacks on the 
World Trade Center in New York City on September 
11, 2001; and 
(2) report the findings of such assessment to 
Congress by not later than one year after the date 
of enactment of this Act and post the report on the 
primary agency public access website. 
(b) UTILIZATION OF IPSIGS TO MONITOR AND PRO-
VIDE
GREATER
ACCOUNTABILITY.—Such assessment 
shall include examination of how IPSIGs may be utilized 
to monitor and provide greater accountability for contracts 
using Federal funding provided in response to a terrorist 
attack, natural disaster, or other national emergency, in-
cluding contracts for debris removal and the repair or re-
construction of damaged infrastructure. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
SEC. 4. ENHANCED ACCOUNTABILITY FOR FEDERAL AS-
SISTANCE. 
(a) IN GENERAL.—The Homeland Security Act of 
2002 is amended by inserting after section 856 (6 U.S.C. 
426) the following: 
‘‘SEC. 856a. ENHANCED ACCOUNTABILITY FOR FEDERAL AS-
SISTANCE. 
‘‘(a) RECIPIENTS OF FEDERAL ASSISTANCE.— 
‘‘(1) IN GENERAL.—Each State, local, tribal, 
and nonprofit entity that receives Federal assistance 
funds in response to acts of terrorism, natural disas-
ters, or other emergencies shall report to the perti-
nent Federal agency 6 months after the initial dis-
bursement of resources regarding the expenditure of 
such funds. 
‘‘(2) CONTENTS.—The report shall include a 
description of— 
‘‘(A) the projects or programs that re-
ceived Federal assistance; 
‘‘(B) the entity administering the program 
or project; and 
‘‘(C) the dates and amounts disbursed, al-
located, and expended. 
‘‘(3) MINIMIZING
REPORTING
BURDEN.—The 
Director of the Federal Emergency Management 
Agency shall determine whether the requirement to 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
report under this section is duplicative of or can be 
combined with other reporting requirements and, if 
so, the Director shall combine such requirements 
and eliminate such duplication. 
‘‘(b) FEDERAL
ASSISTANCE
DISBURSING
AGEN-
CIES.— 
‘‘(1) IN GENERAL.—Each Federal agency that 
disburses Federal assistance funds in response to an 
act of terrorism, natural disaster, or other emer-
gency shall submit to the Inspector General of the 
Department, acting in the Inspector General’s role 
as chairman of the President’s Council on Integrity 
and Efficiency Homeland Security Roundtable, a re-
port on the expenditure of such funds. 
‘‘(2) CONTENTS.—Each report required under 
paragraph (1) shall include— 
‘‘(A) names and addresses of recipient 
agencies; 
‘‘(B) the purpose for which resources were 
provided; 
‘‘(C) the amounts disbursed, allocated, and 
expended; and 
‘‘(D) the status of reporting by agencies 
that received disbursements (as set forth under 
subparagraph (A)). 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(3) DEADLINE.—Each report submitted under 
paragraph (1) shall be submitted not later than one 
year after the date of the enactment of the appro-
priations Act that makes available the Federal as-
sistance funds covered by the report, and on a recur-
rent basis every 6 months thereafter until such time 
as all such funds are expended or the Inspector Gen-
eral and such Council determine that such reports 
are no longer required.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of such Act is amended by inserting after 
the item related to section 856 the following: 
‘‘Sec. 856a. Enhanced accountability for Federal assistance.’’. 
SEC. 5. ENHANCED INFORMATION SHARING AMONG FED-
ERAL AGENCIES TO PREVENT WASTE, FRAUD, 
AND ABUSE. 
(a) IN GENERAL.—The Homeland Security Act of 
2002 is further amended by inserting after section 856a 
the following: 
‘‘SEC. 856b. ENHANCED INFORMATION SHARING AMONG 
FEDERAL AGENCIES TO PREVENT WASTE, 
FRAUD, AND ABUSE. 
‘‘(a) CONFIRMATION OF IDENTITY AND ELIGIBILITY 
OF APPLICANTS.—Any Federal, State, local, or tribal 
agency that disburses Federal grants, loans, services, and 
other assistance in response to or for the recovery from 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
acts of terrorism, natural disasters, or other emergencies 
shall make reasonable efforts to confirm the identity and 
eligibility of the applicant for such assistance without plac-
ing undue burden on the applicant. 
‘‘(b) CONSENT TO ACCESS.— 
‘‘(1) 
INCLUSION
ON
APPLICATION
MATE-
RIALS.—The Federal, State, local, or tribal agency 
may include provisions on application materials for 
grants, loans, services, and other assistance that 
would allow access to Internal Revenue Service in-
formation (IRS Form 8821 Tax Information Au-
thorization) and other relevant Federal databases, to 
allow government agencies to share information and 
enhance the accuracy and expedite the delivery of 
assistance to applicants. 
‘‘(2) CONSENT NOT REQUIRED.—Any applicant 
who declines to consent to the sharing of such infor-
mation shall not be denied assistance or otherwise 
penalized for that reason.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of such Act is further amended by inserting 
after the item related to section 856a the following: 
‘‘Sec. 856b. Enhanced information sharing among Federal agencies to prevent 
waste, fraud, and abuse.’’. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6211
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
SEC. 6. DEPUTY INSPECTOR GENERAL FOR RESPONSE AND 
RECOVERY. 
(a) IN GENERAL.—Subtitle B of title VIII of the 
Homeland Security Act of 2002 (6 U.S.C. 371) is amend-
ed by adding at the end the following: 
‘‘SEC. 813. DEPUTY INSPECTOR GENERAL FOR RESPONSE 
AND RECOVERY. 
‘‘(a) ESTABLISHMENT.—There is established the po-
sition of Deputy Inspector General for Response and Re-
covery within the Office of the Inspector General of the 
Department. 
‘‘(b) APPOINTMENT.—The Deputy Inspector General 
shall be appointed— 
‘‘(1) by the Inspector General of the Depart-
ment; and 
‘‘(2) solely on the basis of integrity and dem-
onstrated ability in accounting, auditing, financial 
analysis, law, management analysis, public adminis-
tration, or investigations. 
‘‘(c) REPORTING AND STATUS AS SES POSITION.— 
The Deputy Inspector General shall— 
‘‘(1) report to, and be under the direct author-
ity and supervision of, the Inspector General; and 
‘‘(2) serve as a career member of the Senior 
Executive Service. 
‘‘(d) DUTIES.— 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS
‘‘(1) AUDITS AND INVESTIGATIONS.—The Dep-
uty Inspector General shall, in coordination with In-
spectors General of other departments, as appro-
priate, conduct, supervise, and coordinate audits and 
investigations of the treatment, handling, and ex-
penditure of amounts appropriated or otherwise 
made available for response to and recovery from an 
act of terrorism, natural disaster, or other emer-
gency by the Federal Government, and of the pro-
grams, operations, and contracts carried out uti-
lizing such funds, including— 
‘‘(A) the oversight and accounting of the 
obligation and expenditure of such funds; 
‘‘(B) the monitoring and review of recon-
struction activities funded by such funds; 
‘‘(C) the monitoring and review of con-
tracts by such funds; 
‘‘(D) the monitoring and review of the 
transfer of such funds and associated informa-
tion between and among departments, agencies, 
and entities of the United States, and private 
nongovernmental entities; and 
‘‘(E) the maintenance of records on the 
use of such funds to facilitate future audits and 
investigations of such funds. 
VerDate Aug 31 2005 
23:44 Aug 02, 2006
Jkt 049200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H5943.IH
H5943
hmoore on PROD1PC68 with HMBILLS