Hurricanes Gustav and Ike Disaster Assistance: FEMA Strengthened Its Fraud Prevention Controls, but Customer Service Needs Improvement
Published: 2009-06-19T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO's previous work on Hurricanes Katrina and Rita identified fraud, waste, and abuse resulting from a lack of fraud-prevention controls within the Federal Emergency Management Agency's (FEMA) assistance programs. For example, FEMA did not verify the identities or addresses of individuals applying for aid under its Individuals and Households Program (IHP). FEMA also did not verify the eligibility of individuals seeking shelter in FEMA-paid-for hotels and made duplicate payments to individuals who applied multiple times. GAO made numerous recommendations designed to improve these controls. To follow up on this work, GAO conducted undercover tests of the IHP process during the response to Hurricanes Gustav and Ike. This report discusses (1) whether FEMA's controls have improved since Katrina and Rita and (2) issues GAO identified related to the customer service that FEMA provided. GAO submitted bogus applications for disaster assistance, met with FEMA officials, and contacted actual disaster victims to determine their experiences applying for aid.
section_title: What GAO Found
paragraphs: FEMA has significantly improved its fraud prevention controls over disaster assistance. For example, FEMA now conducts identity and address verification on all applications and requires inspections prior to approving rental assistance. In addition, FEMA requires individuals in need of housing assistance to provide valid registration numbers before checking into FEMA-paid-for hotels. FEMA has also taken steps to flag and cancel duplicate registrations for the same disaster. These improvements made it more difficult for GAO to penetrate IHP controls for Hurricanes Gustav and Ike--only 1 of 10 fraudulent applications submitted by GAO received cash payments. However, GAO found flaws in FEMA's controls that still leave the government vulnerable to fraud, waste, and abuse. GAO's undercover tests show that a persistent fraudster can bypass many of these controls by submitting fabricated documents to prove identity or address and, as a result, obtain housing assistance. GAO also received duplicate payments for bogus hotel expenses. In addition, FEMA failed to properly inspect a bogus address GAO used to apply for assistance, ultimately sending GAO multiple checks for thousands of dollars in rental assistance. GAO observed several problems with FEMA's customer service, which made it difficult for many real victims to apply for assistance or obtain shelter in a timely fashion. For example, one of GAO's investigators called nine times over the course of 3 days--several times being put on hold for 20 minutes----before being connected to an operator. Other investigators received incorrect information about the application process. Actual disaster victims confirmed these problems. One applicant reported having to call FEMA at 4 a.m. in order to reach an operator. FEMA cited several factors that contributed to this poor service, including a higher-than-expected call volume and an inability to meet projected call center staffing needs because a contractor failed to provide adequate staffing. Despite these issues, FEMA told GAO that it has made few changes in preparation for the 2009 hurricane season.

section_title: Letter
paragraphs: In several previous reports and hearings related to Hurricanes Katrina and  Rita, we found that significant control weaknesses in the Federal  Emergency Management Agency’s (FEMA) disaster assistance programs  left the government vulnerable to fraud, waste, and abuse. Specifically,  we found that FEMA’s weak or nonexistent fraud prevention controls over  cash assistance provided to disaster victims resulted in an estimated $1  billion in potentially fraudulent payments. Our work showed that these  payments occurred mainly because FEMA did not consistently validate the  identity of applicants who registered for assistance, inspect or confirm the  physical existence of damaged addresses, and confirm whether potential  aid recipients actually owned or occupied a damaged residence at the time  of the disaster. FEMA also made thousands of dollars in duplicate  payments to registrants who improperly claimed the same damaged  addresses. In addition, we identified fraud and abuse related to the  temporary housing assistance FEMA provided to individuals displaced by  the disaster. For example, we found that FEMA allowed individuals to stay  in FEMA-paid-for hotels even though they were already receiving rental  housing or were ineligible for disaster assistance.
This report provides a limited assessment of the controls FEMA had in  place for disaster assistance during the response to Hurricanes Gustav and  Ike. Specifically, we discuss (1) whether certain aspects of FEMA’s fraud  prevention controls have improved since Hurricanes Katrina and Rita and  (2) issues we identified related to the customer service provided to  disaster applicants. To perform this work, we submitted 10 applications  for disaster assistance through the Internet and by telephone using  falsified identities, bogus addresses, and fictitious disaster stories. It is  important to note that we did not use the identities or addresses of real  people to submit these applications. We created counterfeit documents  where applicable using publicly available materials. We also attempted to  check in to FEMA-paid-for hotels posing as disaster victims. In addition,  we interviewed FEMA officials, reviewed FEMA’s policies and procedures,  and reviewed our undercover applications with FEMA at the close of our  investigation. We documented breakdowns in customer service by  analyzing FEMA’s response to our applications. We also obtained a  database from FEMA containing the contact information for 1,000  individuals who successfully registered for disaster assistance; we called  dozens of these individuals in an attempt to interview them concerning  their experiences with FEMA. We conducted our investigative work from  September 2008 through April 2009 under the statutory authority given the  Comptroller General of the United States to initiate such work and in  accordance with standards prescribed by the Council of Inspectors  General for Integrity and Efficiency.
subsections: section_title: Background
paragraphs: Hurricanes Katrina and Rita caused catastrophic destruction to the Gulf  Coast region, with an estimated combined total of $160 billion in damage.  Estimates indicate that Hurricanes Gustav and Ike also caused billions of  dollars in damage along the Gulf Coast region. FEMA assists disaster  victims in part through its Individuals and Households Program (IHP), a  component of the federal disaster-response efforts established under the  Robert T. Stafford Disaster Relief and Emergency Assistance Act. FEMA  determines whether individuals or households meet eligibility  requirements for IHP assistance after they apply for registration either  online or over the telephone. Applicants must submit identification  information, including name, Social Security Number (SSN), and date of  birth. Applicants must also provide a legitimate address affected by the  hurricane; FEMA guidelines specify that eligibility for housing assistance  is predicated on the registrant being displaced from his or her primary  residence.
IHP assistance can include temporary housing, home repair and personal  property replacement, and other necessary expenses related to a disaster.  For Hurricanes Katrina and Rita, FEMA also activated expedited  assistance to provide immediate cash—in the form of $2,000 payments—to  eligible disaster victims to help with emergency needs for food, shelter,  clothing, and personal necessities. Activating expedited assistance allowed  FEMA to provide aid to disaster victims without requiring proof of  property damage or other losses. FEMA did not activate expedited  assistance for Hurricanes Gustav and Ike, although it did offer limited fast- track payments for individuals with critical needs as a result of Hurricane  Gustav. As of March 2009, FEMA states that it has distributed  approximately $665 million in IHP assistance to victims of Hurricanes  Gustav and Ike, as compared to almost $8 billion for Hurricanes Katrina  and Rita. This amount includes rental assistance, lodging, repairs,  replacement, and other needs assistance.
section_title: FEMA Has Significantly Improved Fraud Prevention Controls over Disaster Assistance, but Weaknesses Still Exist
paragraphs: Since Hurricanes Katrina and Rita, FEMA has improved its controls over  identity and address verification and inspections, housing assistance in  FEMA-paid-for hotels, and duplicate registrations. Improvements in these  three key areas have reduced FEMA’s risk of making payments based on  fraudulent disaster assistance registrations. For example, for Hurricanes  Ike and Gustav, FEMA conducted identity and address verification on all  applications and required inspections prior to approving rental assistance.  In addition, FEMA required individuals in need of housing assistance to  provide valid registration numbers before checking into FEMA-paid-for  hotels. FEMA has also taken steps to flag duplicate registrations submitted  for the same disaster. Although these improvements are significant, our  work shows that an identity thief or a persistent fraudster with basic  counterfeiting skills could still obtain rental or hotel assistance by  exploiting existing weaknesses in the registration and approval processes.  In particular, we were able to bypass verification controls by submitting  more sophisticated bogus identities and by providing FEMA with fictitious  documentation to validate our registration information. For one of our  registrations, these weaknesses allowed us to obtain thousands of dollars  in rental assistance, approval for transitional housing, and duplicate  reimbursements for fictitious hotel expenses. We were successful on this  application not only because we submitted fictitious documentation, but  also because FEMA’s inspector failed to properly inspect our bogus  damaged address. For other applications, falsified supporting  documentation allowed us to obtain approval for transitional housing, and  in one case we subsequently checked into two different hotels. Finally, we  found that FEMA was unable to prevent duplicate registrations submitted  for more than one disaster.
subsections: section_title: Identity and Address Verification and Inspections
paragraphs: The following information describes (1) the control weaknesses related to  identity and address verification and inspections that we identified during  our work on Hurricanes Katrina and Rita, (2) the improvements we found  as a result of our undercover tests during Hurricanes Gustav and Ike, and  (3) flaws that still exist in the identity and address verification and  inspection processes.
Weaknesses in Address and Identity Verification and Inspections  Identified after Hurricanes Katrina and Rita: As we reported  previously, we found significant flaws in the process that FEMA used to  approve individuals for disaster assistance payments after Hurricanes  Katrina and Rita. For example, although FEMA subjected Internet  applications to an identification verification process, it did not use this  verification process for phone applications. Specifically, for Internet  applications, a FEMA contractor used credit and other information to  confirm that (1) the applicant’s SSN matched with an SSN in public  records and (2) that the SSN did not belong to a deceased individual.  Applicants who were rejected through the Internet were advised to apply  over the phone. However, phone applications were exempt from any  identity verification. In addition, prior to providing assistance payments,  FEMA did not use public records or inspections to verify the physical  location of damaged addresses, nor did it confirm that applicants actually  occupied a damaged address at the time of the disasters.
As a result of these weaknesses, we were able to receive disaster  assistance by using fictitious names and nonexistent addresses. For  example, for one of our Hurricane Katrina applications, we used an empty  lot in Louisiana as our damaged address. Although this damaged property  address was clearly bogus, FEMA notified us that an inspector had  confirmed that the property was damaged and subsequently sent us  thousands of dollars in rental assistance. Through data mining, we  identified cases where other applicants received assistance by using SSNs  belonging to deceased individuals and by using storefronts, post office  boxes, cemeteries, and nonexistent apartments as damaged addresses.  Other cases we identified involved applicants that claimed to live at valid  damaged addresses, even though they were actually incarcerated or living  in states not affected by the Hurricanes.
Improvements Identified during the Response to Hurricanes  Gustav and Ike: FEMA made several improvements to the verification  and inspection processes. For example, FEMA told us that the same  identity-verification process is now automatically performed when an  applicant applies through the Internet and over the phone. In addition,  both Internet and phone applications are now subject to automatic  address and occupancy verification. Address verification includes checks  to confirm that an address is deliverable; is not a post office box or a  business address; and is not a “high-risk,” address such as a tattoo parlor,  or a pawn shop. Occupancy/ownership verification confirms that an  applicant occupies or owns the property through a check of property  records. Applicants who register over the telephone and fail any of these  verification tests still receive registration numbers, but FEMA requests  additional documentation prior to any payments being made. According to  FEMA, applicants can verify their identities by submitting tax forms,  marriage licenses, or government-issued identification. Address and  occupancy can be verified by submitting documents such as drivers’  licenses, utility bills, and property-tax records. An applicant can fax the  supporting documentation to FEMA or wait and provide them to an  inspector. FEMA also told us that even if an applicant passed both identity  and address verification, an inspector must meet with an applicant to  further verify occupancy and to confirm that a property was damaged in  order to be eligible for rental assistance.
Our undercover applications for Hurricanes Gustav and Ike confirm these  improvements, as described in the following examples:    Five of our 10 applications initially failed identity verification. For  these 5 applications, we used falsified identification information similar  to what we used for Hurricanes Katrina and Rita. Specifically, for these  applications, we used either completely fabricated names and SSNs, or  names with valid dates of birth and SSNs but without any credit  history, such as credit card or bank activity. We could not successfully  register some identities by using the Internet and were instructed to  apply by phone. At the end of the phone application process, FEMA  call center operators provided us with registration numbers but also  told us that there were “verification errors” associated with our  registrations. Although the operators told us that inspectors would be  contacting us to schedule an inspection of our property, we were  instructed to provide additional documentation to validate our  identities.
All 10 of our applications initially failed address and occupancy  verification. For all 10, we used fabricated address information,  including street addresses that did not exist and the addresses of local  municipal buildings. When we later reviewed our applications with  FEMA, we found that all 10 were flagged as having errors, in part  because the addresses we used were not deliverable or because the  names we used did not match property records associated with the  addresses.
The inspection process prevented us from receiving rental assistance  for 9 of our 10 applications. Specifically, the 9 addresses we selected  for these applications were either not private residences or they were  not actually damaged by the hurricanes. Therefore, although FEMA  inspectors left messages requesting that we schedule inspections, we  did not meet with them. For example, for 1 of our applications we used  the address of a Texas elementary school in an area affected by  Hurricane Ike. Prior to scheduling an inspection, the inspector called  us from the school requesting clarification as to where we resided. We  discontinued the application as a result of this call.
Continued Weaknesses in Address and Identity Verification and  Inspections: We were able to circumvent FEMA’s initial controls by using  valid identities with credit histories and by submitting fabricated  identification and address information. For one of our registrations, these  weaknesses, coupled with FEMA’s failure to correctly inspect our  fictitious address, allowed us to obtain rental assistance and duplicate  reimbursements for fictitious hotel expenses.
Six of our 10 applications passed identity-verification controls on the  first try through the Internet and over the phone, in part because we  simulated the actions of an identity thief by using identities with  legitimate dates of birth, SSNs, and credit histories. Because some of  these identities were valid, FEMA appropriately did not find any  verification errors. However, FEMA also did not identify the fact that  one of the identities with a credit history showed that we lived outside  the areas affected by the hurricanes. For 1 of our applications, we used  a name and SSN that were linked to credit records in Virginia, with no  record of activity in Texas or the surrounding area. In this way, a  fraudster could steal an identity from anyone in the country and use it  to pass FEMA’s identity tests.
Five of our 10 applications eventually passed either identity or address  verification or both because FEMA accepted fabricated supporting  documents we submitted as legitimate. For example, for 1 of the  applications, we registered by phone using a completely fake name,  date of birth, and “999-XX-XXXX” as our SSN. FEMA requested that we  provide additional documentation to prove our identity, so we faxed in  a bogus college transcript. When we subsequently reviewed our  applications with FEMA, we found that this bogus transcript was  deemed sufficient proof of identification. Similarly, we were able to  submit fabricated tax forms and utility bills to prove address and  occupancy. When we asked FEMA officials about the process for  handling supporting documentation, they told us they do not take any  steps to verify the documents. The officials said that they only check to  see whether the document appears to be tampered with. If it does,  FEMA case workers or contractors will verify the document by calling  any phone numbers listed on the document or performing Internet  research. If the document appears to be valid, then no additional  checks are performed. According to FEMA, our fabricated documents  did not appear to be tampered with and therefore were immediately  accepted as legitimate.
One of our applications received thousands of dollars in rental  assistance because FEMA accepted our fabricated supporting  documents and because FEMA approved the application without the  inspector correctly inspecting the property or meeting with us in  person. This application was also approved for a free hotel room and  received duplicate payments for previously incurred hotel expenses.
For this application, we used a name with a valid date of birth and SSN,  but without any credit history. For our damaged address, we used a  nonexistent street number on a real street in an area of Texas affected  by Hurricane Ike. In response to FEMA’s request for identity  verification, we submitted an IRS form 1099, which can easily be found  on the Internet, claiming that we worked for a bogus landscaping  company on a nonexistent street. We also submitted a fabricated utility  bill to verify our occupancy. A FEMA inspector attempted to contact us  to schedule a date for an inspection, but we never set up a meeting.
Ultimately, we were notified that we were eligible for rental assistance  and housing assistance in a FEMA-paid-for hotel. However, because the  approved dates for obtaining a hotel room were about to expire, we  subsequently asked FEMA to reimburse us for previously incurred  hotel expenses. As proof of our stay in the hotel, we submitted a bogus  bill we created by changing the name and address on a letterhead from  a hotel in the Washington, D.C., area.
In total, we received just over $6,600 in assistance from FEMA for this  application, including $4,465 for rental assistance and $2,197 for hotel- expense reimbursements. The $2,197 in hotel-expense reimbursements  we received included duplicate reimbursements for our hotel expenses:  one check for $1,098.50 from FEMA and another check in the same  amount from FEMA’s hotel contractor. Figure 1 depicts one of the  rental assistance checks.
In reviewing this application with FEMA officials, we asked why we  received rental assistance without an inspection. FEMA told us that the  inspector had performed an inspection and noted that the entire street  where our fictitious address was supposed to be was destroyed.  Although FEMA initially blocked us from receiving assistance because  we were not present during the inspection, the case worker chose to  override this decision because the case worker believed that the  destruction of the entire street indicated that we had an immediate  need for assistance. FEMA officials emphasized that the case worker  should not have taken this action and we should not have received  rental assistance.
Finally, with regard to the duplicate payments we received for hotel  expenses, FEMA told us that we may have received these payments  because of a breakdown in the reimbursement process. Specifically,  both FEMA and its lodging contractor made payments for expenses  incurred at hotels by approved disaster applicants. FEMA typically  sends a list of payments it has already made to the contractor. Using a  manual process, the contractor reviews this list to determine what  payments need to be made. With regard to the duplicate payment we  received, the FEMA officials we spoke with speculated that the  contractor simply missed the payment by FEMA during its review.  After we brought this issue to their attention, FEMA officials told us  that they were already conducting a review of the process to if the duplicate payment problem was widespread. As a result of this  review, FEMA found that the lodging contractor made four additional  duplicate payments. FEMA has flagged these payments for  recoupment.
section_title: Housing Assistance in FEMA-Paid-for Hotels
paragraphs: The following information describes (1) the control weaknesses related to  FEMA’s hotel housing program that we identified d Hurricanes Katrina and Rita, (2) the improvements we found as a result of  our undercover tests during Hurricanes Gustav and Ike, and (3) flaws tha t  still exist in the hotel-assistance approval process.
Weaknesses in the Hotel-Assistance Approval Process Iden after Hurricanes Katrina and Rita: Following Hurricane Katrina,  FEMA provided displaced individuals with free hotel accommodations.  However, FEMA did not require the hotels to collect registration information (such as FEMA registration numbers or SSNs) on individu staying in the free rooms. Without this information, FEMA was not abl ensure that only valid disaster victims were receiving free hotel  accommodation s. As a result, we found that individuals stayed in free  hotel rooms even though they were not eligible to receive any type of  disaster assistance because they had never lived in residences dama the hurricanes.
Improvements Identified during the Response to Hurricanes  Gustav and Ike: According to FEMA, it strengthened controls over hotel  assistance by requiring applicants seeking free lodging to (1) obtain a  registration number from FEMA and (2) pass both identity and address  verification. Once registrants received approval to check in to a h had to provide the hotel with a valid registration number, picture ID, the last four digits of an SSN so that the hotel could check this inform against a database maintained by FEMA’s hotel contractor. Our  undercover work confirmed that these controls were effective. For  example, without applying for assistance and obtaining registration  numbers, our investigators tried seven times to obtain hotel rooms just by claiming that they were victims of Hurricane Ike and showing bogus Tex drivers’ licenses . They were denied rooms every time. In addition, when  we tried to obtain hotel rooms with FEMA registration numbers that had  not passed the identity and address-verification process, we were again  denied rooms.  cess:  Continued Weaknesses in the Hotel Assistance Approval Pro Despite the improvements we identified, we were still approved for hotel  assistance on 4 of our 10 applications after we obtained registration  numbers and passed identity and address verification using bogus  supporting documentation. For one of these applications, we still rec approval for transitional housing even though FEMA noted that the utility  ill we submitted to prove our address was illegible. Ultimately, we  b checked into two different hotels using one of our bogus identities.
section_title: Duplicate Registrations
paragraphs: The following information describes (1) the control weaknesses related to  duplicate payments and registrations we identified during our work on Hurricanes Katrina and Rita, (2) the improvements we found as a result of  our undercover tests during Hurricanes Gustav and Ike, and (3) flaws thatstill exist in the process FEMA uses to detect duplicate registrati ons.
Weaknesses in Detecting Duplicate Registrations Identified after  Hurricanes Katrina and Rita: FEMA did not detect duplicate  registrations or prevent duplicate payments after Hurricanes Katrina  and  Rita. We identified instances where FEMA made more than one payment  to the same household that shared the same last name and damaged an d  current addresses. FEMA also made millions of dollars in duplicate  payments to thousands of individuals who submitted claims for damages  to the same primary residences for both Hurricanes  Katrina and Rita.
FEMA officials explained that victims of both disasters are allowed  only  one set of IHP payments for the same damaged address and therefore on entitled to payments based on a single registration.
Improvements Identified during the Response to Hurricanes  Gustav and Ike: Improved data checks enabled FEMA to successfully  prevent us from applying twice for Hurricane Gustav using the same  identity. For example, we used the same damaged and current address  information for two of our applications. When we subsequently revie our applications with FEMA officials, we saw that one of the applica had been flagged as being a duplicate and was about to be cancelled.
section_title: Some Disas Had Difficulty Registering for Assistance
paragraphs: ded  We observed several deficiencies in the customer service FEMA provito disaster victims. Specifically, had we been real disaster victims without e  Internet access, we would probably have been unable to obtain assistanc in the immediate aftermath of the hurricanes. We also called actual disaster victims, many of whom told us that they experienced similar  problems. According to FEMA, these problems occurred in part because  the initial call center staffing model it developed for the 2008 hurricane  season was overwhelmed by members of the media and high-level  government officials encouraging the public to contact FEMA. However,  data we received from FEMA show that these call centers were actually  staffed well below FEMA’s own estimates of peak staffing needs fo the hurricanes. FEMA told us that this staffing deficiency was caused, in  part, by difficulties associated with one of its co that it had not planned to staff call centers up to levels necessary to handle  peak call-volume needs. Despite problems we noted with FEMA’s  ntractors, but also stated  customer service following the hurricanes, it intends to rely on the operational plan for the 2009 hurricane season.
subsections: section_title: Difficulties Exper by Undercover GAO Applicants and Real Disaster Victims
paragraphs: Although we encountered little or no difficulty when applying for  assistance over the Internet, we observed several problems with FEMA’s customer service when we made applications by phone. The following  examples describe some of the problems we encountered:    Busy phone lines and long wait times. We could not immediatel get through to the call centers when applying by phone. For one of o Hurricane Ike applications, an investigator had to call nine times over  the course of 3 days before being able to speak to a call center staf member. During these calls, the investigator either got a recording  saying “all agents are busy; try later” or was put on hold for 15 to 20  minutes before hanging up. On another Hurricane Ike application, the  investigator called five times over the course of three days before  getting through to a call center, experiencing similar busy messages  and wait times. On a Hurricane Gustav application, the investigator had  to call after 1:00 a.m. in order to speak with an operator. We identified  similar problems when calling FEMA’s help line to check on the s tatus  of our applications. For example, one investigator called the help line  13 times over the course of 8 days but never got through to an operator.
Incorrect information. Call center staff did not always give us  accurate information. For example, although some of our fictitious  applicants were told that inspectors would call to schedule inspection even though the applicant did not know the extent of damage to his  property, one of our inv for an inspection unless he provided a more precise account of his  property damages. For another application, we had to fax supp documentation in multiple times because we were initially given an  incorrect fax number.  estigators was told he would not be scheduled  Delayed notification for hotel assistance. For two of our  registrations that were approved for temporary housing, FEMA did no notify us in a timely manner, which prevented us from obtaining a hot room.  s,  In an effort to understand the experiences of actual disaster victim we contacted registrants chosen from a database provided by FEMA About half of the individuals we spoke with told us that they did not  experience any problems with FEMA’s application process; the other half confirmed that they encountered delays in getting through to  .
FEMA operators, problems scheduling inspections, and difficulties  obtaining hotel rooms once they had been approved. FEMA permits  registration for assistance over the Internet, but power outages may  have forced many victims to seek assistance over the telephone. Table  1 highlights 10 of our conversations with disaster victims.
section_title: FEMA’s Staffing Models and Call Center Operational Plan
paragraphs: FEMA cited several factors that contributed to poor customer service in  the aftermath of Hurricanes Ike and Gustav: a higher-than-expected call  volume, unmet staffing needs, contractor failure, and problems with its  automatic call system. FEMA told us that although it intends to use a  different contractor for the 2009 hurricane season, the agency will make  no other changes to its call center operational plan.
Higher-than-Expected Call Volume: FEMA told us that they received  what they described as an overwhelming number of calls, especially from  individuals that may not have otherwise asked for assistance, because the  media and high-level government officials strongly encouraged the public  to contact FEMA. For example, FEMA estimated that it would receive  approximately 530,291 calls requesting assistance for Hurricanes Gustav  and Ike, but it actually received a total of 1,195,213 calls—125 percent  more than expected. FEMA officials also stated that many individuals who  called FEMA had unrealistic expectations as a result of the widespread  coverage of hurricane Katrina. In particular, many applicants called  because they expected to receive an immediate $2,000 expedited  assistance payment.
Projected Call Center Needs Unmet: Data provided by FEMA show  that FEMA fell short of its anticipated peak staffing needs. According to  FEMA, call centers are typically staffed with a baseline number of  personnel before a disaster takes place. To determine staffing, FEMA  primarily relies on historical models, and the type and the size of a  disaster. If FEMA determines that additional staff are needed after a  disaster occurs, it relies on an interagency agreement with the Internal  Revenue Service (IRS) and on contractors. According to FEMA, its four  call centers were staffed with a baseline of 684 staff before Hurricanes  Gustav and Ike hit. In preparation for Hurricane Gustav, FEMA determined  that peak staffing levels at the call centers could be as high as 6,300 staff  by September 4, 2008, 3 days after the hurricane would make landfall.  However, FEMA data show that actual staffing levels were just below  1,100. In addition, FEMA determined that peak staffing levels at the call  centers could be nearly 11,000 staff by September 15 in order to handle  calls for both Hurricanes Ike and Gustav. However, once Hurricane Ike  made landfall on September 13, FEMA data show there were only 1,378  personnel staffed at the call centers—75 percent below staffing estimates  for that day. When asked about the significant difference between staff on  hand and anticipated staffing requirements, FEMA officials stated staffing  to meet short-term peaks is inefficient as it would require substantial  resources to hire and train staff to peak levels, only to release them shortly  thereafter due to decreased call volume.
Contractor Failures: FEMA said that one contractor was not able to  supply a sufficient number of staff in a short period of time, resulting in a  lack of staff available at call centers. Specifically, FEMA told us that it  entered into a temporary service contract awarded through the General  Services Administration (GSA) to augment its call center staff. This  contract limited the proposals to only those companies on the GSA  schedule that were small businesses—businesses that FEMA believes  were not equipped to handle its staffing issues. FEMA said that by the time  it learned that only small businesses were under consideration, it could  not afford to consider alternative routes. In addition, FEMA said that one  of the small businesses it chose to work with indicated that it intended to  team up with a large national staffing services company with greater  resources, which initially gave FEMA confidence that the contractor could  meet its staffing needs. However, FEMA said that it took over 2 weeks for  the contractor to supply the numbers of temporary workers required to  address the large call volume. In addition, as a change after Hurricane  Katrina, call center operators had to undergo security screening prior to  being able to work at the call centers. Before Katrina, operators could  start work while the security check was in progress. FEMA said that this  heightened security check prevented the contractor from providing  additional staff in a timely fashion. FEMA officials told us they will not be  using the same contractor for the upcoming hurricane season.
Automatic Call System Issues: With regard to the issues we identified  related to obtaining timely hotel approval, FEMA officials said that they  received a large number of requests for free lodging. As a result, they  established (1) a separate fax line to accept verification documentation  and (2) an auto-dial system to inform people they were approved to check  into a hotel. However, according to FEMA, there were problems with the  auto-dial system, and therefore some individuals were not promptly  informed that they were eligible for housing assistance.
section_title: Conclusions
paragraphs: This investigation shows that FEMA has made significant progress in  addressing the challenge of providing urgent disaster relief to individuals  and communities in need of assistance, while simultaneously safeguarding  its programs from fraud and abuse. By improving controls over IHP, FEMA  has taken steps to provide reasonable assurance that fraud and abuse in  this program is minimized. Given that the current hurricane season  has  begun, FEMA should incorporate lessons learned from our investigation to  continue to improve its fraud-prevention program and address all of the  customer-service issues we identified.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Homeland Security direct the  Administrator of FEMA to take the following two actions:    Establish random checks to assess the validity of supporting  documentation submitted by applicants to verify identity and address.    Assess the customer-service findings from this investigation and make  improvements for future hurricane seasons in areas such as contractor  readiness.
section_title: Agency Comments
paragraphs: In written comments on a draft of this report, the Department of  Homeland Security concurred with and agreed to implement both of our  recommendations.
We are sending copies of this report to the Secretary of Homeland  Security, the FEMA Administrator, and interested committees. In addition,  the report will be available at no charge on GAO’s Web site at  http://www.gao.gov. If you or your staff have any questions regarding this  report, please contact me at (202) 512-6722 or kutzg@gao.gov. Contact   points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this report.
section_title: Appendix I: Comments from the Department of Homeland Security