Short title

This Act may be cited as the Fraud Accountability in Emergency Response Act of 2006.

Preventing waste, fraud, and abuse in Federal 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 programs

Title V of such Act (6 U.S.C. 311 et seq.) is amended by adding at the end the following:

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 administering 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; (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 integrated with the disbursements and payment records. (b)

Audits and reviews required

The Secretary shall ensure that any existing database or similar application processing system in effect on the date of enactment 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 required 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 annual 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 disburse Federal assistance. (d)

Report to Congress

Recommendations or findings that remain unresolved between program administrators and the Inspector General of the Department for 30 days must be immediately reported to Congress by the Inspector General.

513.

System to record and track assistance

(a)

Establishment

The Director of the Federal Emergency Management Agency shall establish and implement a system for recording and tracking all monetary and other benefits disbursed by the Agency to eligible persons. (b)

Elements

In establishing the system, the Director 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 reject, 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.

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 assistance 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 purchase of any good or service from a commercial establishment engaged in adult entertainment, gambling, or the sale of pawned goods.

515.

Monitoring of Department contracting

To the extent practicable, the Inspector General of the Department shall continue to monitor, and make recommendations relating to, the contracting process of the Department to prevent waste, fraud, and abuse.

516.

Small business database for Federal contracting related to major disaster and emergency assistance activities

(a)

Establishment of database

The Secretary, acting through the Director of the Federal Emergency Management Agency, shall establish and maintain a database that contains information about small business entities for purposes of Federal contracting relating to assistance activities conducted in response to and recovery from acts of terrorism, natural disasters, and other emergencies. (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 entity. (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 disadvantaged 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 entity as is submitted by the small business entity. (2)

Attestation

Each small business entity submitting information to the database shall submit— (A)an attestation that the information submitted is true; and (B)documentation supporting such attestation. (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 awarding 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 individuals, small business entity owned and controlled by women, and small business entity owned and controlled by service-disabled veterans shall have the meanings given the terms small business concern, small business concern owned and controlled by socially and economically disadvantaged individuals, small business concern 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.).

517.

Fraud prevention training program

(a)

Training program required

The Secretary, acting through the Director of the Federal Emergency 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 identify 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; (2)employees and volunteers of any State, local, or tribal government entity; and (3)employees and volunteers of nonprofit organizations that assist in the administration of Federal assistance funds and services provided in response 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 emergencies may share information with the Federal Government, 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 purpose of preventing fraud and abuse of Federal assistance.

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. (b)

Necessary goods and services

The necessary goods and services referred to in subsection (a) include 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 entering 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 competitive procedures, to the maximum extent practicable, except as otherwise provided by law. (e)

Consultation with other Federal departments and agencies

The Director shall consult with the head of a Federal department or agency with respect to any contract entered into by the head of such department or agency using funds made available for preparedness, mitigation, response, and recovery with respect to acts of terrorism, natural disasters, and other emergencies.

Assessment and report regarding utilization of independent private sector inspectors 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 sector 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 provide 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, including contracts for debris removal and the repair or reconstruction of damaged infrastructure.

Enhanced accountability for Federal assistance

(a)

In general

The Homeland Security Act of 2002 is amended by inserting after section 856 (6 U.S.C. 426) the following:

856a.

Enhanced accountability for Federal assistance

(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 disasters, or other emergencies shall report to the pertinent Federal agency 6 months after the initial disbursement of resources regarding the expenditure of such funds. (2)

Contents

The report shall include a description of— (A)the projects or programs that received Federal assistance; (B)the entity administering the program or project; and (C)the dates and amounts disbursed, allocated, and expended. (3)

Minimizing reporting burden

The Director of the Federal Emergency Management Agency shall determine whether the requirement to 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 agencies

(1)

In general

Each Federal agency that disburses Federal assistance funds in response to an act of terrorism, natural disaster, or other emergency 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 report 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)). (3)

Deadline

Each report submitted under paragraph (1) shall be submitted not later than one year after the date of the enactment of the appropriations Act that makes available the Federal assistance funds covered by the report, and on a recurrent basis every 6 months thereafter until such time as all such funds are expended or the Inspector General 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.

Enhanced information sharing among Federal 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:

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 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 placing undue burden on the applicant. (b)

Consent to access

(1)

Inclusion on application materials

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 information (IRS Form 8821 Tax Information Authorization) 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 information 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.

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 amended by adding at the end the following:

813.

Deputy Inspector General for Response and Recovery

(a)

Establishment

There is established the position of Deputy Inspector General for Response and Recovery 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 Department; and (2)solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. (c)

Reporting and status as SES position

The Deputy Inspector General shall— (1)report to, and be under the direct authority and supervision of, the Inspector General; and (2)serve as a career member of the Senior Executive Service. (d)

Duties

(1)

Audits and investigations

The Deputy Inspector General shall, in coordination with Inspectors General of other departments, as appropriate, conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated or otherwise made available for response to and recovery from an act of terrorism, natural disaster, or other emergency by the Federal Government, and of the programs, operations, and contracts carried out utilizing such funds, including— (A)the oversight and accounting of the obligation and expenditure of such funds; (B)the monitoring and review of reconstruction activities funded by such funds; (C)the monitoring and review of contracts by such funds; (D)the monitoring and review of the transfer of such funds and associated information 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. (2)

Fraud tip line

The Deputy Inspector General shall ensure that not more than 48 hours after a terrorist attack, natural disaster, or other national emergency, the Office of the Inspector General institutes and publicizes a fraud tip line to facilitate the collection of allegations of waste, fraud, and abuse of Federal assistance funds. (3)

Avoidance of duplication

The Deputy Inspector General shall ensure, to the greatest extent possible, that the activities of the Deputy Inspector General do not duplicate audits and investigations of Inspectors General and other auditors of Federal departments and agencies, and State and local government entities. (4)

Coordination with FBI

The Deputy Inspector General shall ensure that investigative activities under this section are coordinated with the Federal Bureau of Investigation. (e)

Financial management matters

In order to assist the Deputy Inspector General for the purposes of carrying out this section, all agencies receiving or distributing Federal funds to respond to acts of terrorism, natural disasters, or other emergencies shall establish and maintain budgetary procedures to distinguish funds related to response and relief efforts from other agency funds. (f)

Funding

There is authorized to be appropriated for operations of the Office of the Deputy Inspector General $11,000,000 for each fiscal year.

(b)

Clerical amendment

The table of contents in section 1(b) of such Act is amended by inserting after the item related to section 812 the following:

Sec. 813. Deputy Inspector General for Response and Recovery.

(c)

Deadline for appointment

The Inspector General of the Department of Homeland Security shall appoint the Deputy Inspector General under this section not later than 60 days after the date of enactment of this Act.