Response to a post hearing question related to GAO's December 6,
2006 testimony on continued findings of fraud, waste, and abuse
associated with Hurricanes Katrina and Rita relief efforts	 
(12-JAN-07, GAO-07-363R).						 
                                                                 
On December 6, 2006, GAO testified before the Senate Committee
on Homeland Security and Governmental Affairs on the results of
our audit and investigation of hurricanes Katrina and Rita
disaster relief efforts. This letter provides our response to
Congress's supplemental question for the record. The testimony
indicated that the Federal Emergency Management Agency (FEMA)
distributed $20 million under the Individuals and Household
Program to individuals who claimed damages for both Hurricane
Katrina and Hurricane Rita. Congress asked whether it was our
conclusion that the entire $20 million was paid improperly or
was the $20 million the amount that potentially was paid
improperly. Congress also asked whether we investigated each
payment comprising the total $20 million.
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-363R					        
    ACCNO:   A68068						        
  TITLE:     Response to a post hearing question related to
GAO's December 6, 2006 testimony on continued findings of fraud,
waste, and abuse associated with Hurricanes Katrina and Rita
relief efforts	 
Facilities							 
     DATE:   01/12/2007 
  SUBJECT:   Program abuses
             Overpayments
             Internal controls
             Hurricane Rita
             Fraud
             Hurricane Katrina
             Federal Emergency Management Agency
             Erroneous payments
             Disaster relief aid
             Accountability			 

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GAO-07-363R



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January 12, 2006: 

The Honorable Joseph I. Lieberman: 
Chairman: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Susan M. Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

Subject: Response to a posthearing question related to GAO's December 
6, 2006 testimony on continued findings of fraud, waste, and abuse 
associated with Hurricanes Katrina and Rita relief efforts. 

Dear Chairman Lieberman and Ranking Member Collins: 

On December 6, 2006, I testified before your committee on the results 
of our audit and investigation of hurricanes Katrina and Rita disaster 
relief efforts. This letter provides our response to your supplemental 
question for the record. Your question and our response follows. 

Question: 

Your testimony indicates that FEMA distributed $20 million under the 
Individuals and Household Program to individuals who claimed damages 
for both Hurricane Katrina and Hurricane Rita. Some press reports have 
jumped to the conclusion that all of the $20 million was improperly 
paid. I want to be clear about the facts of your investigation because 
in some instances FEMA's regulations and policies do permit separate 
payments for damages resulting from separate disasters. Is it your 
conclusion that the entire $20 million was paid improperly or is the 
$20 million the amount that potentially was paid improperly? Did you 
investigate each payment comprising the total $20 million? 

Response: 

In December, we testified that about 7,600 individuals submitted 
duplicate registrations for disaster relief using the same social 
security numbers and damaged property addresses--once for Hurricane 
Katrina and once for Hurricane Rita. Through data mining we identified 
that FEMA paid those individuals nearly $20 million in potentially 
improper and/or fraudulent payments based on duplicate registrations 
for the same damaged address. 

We did not conduct investigations of all payments associated with the 
approximately 7,600 individuals who submitted disaster relief 
registrations for both hurricanes. Such investigations would be 
necessary to determine the extent to which the apparent duplicate 
payment identified through data our mining represented potentially 
improper and or fraudulent payments. However, we did select 12 
registrations made by 6 individuals for further investigations. Based 
on those investigations we found that FEMA made duplicate payments to 
all 6 individuals for damage to the same residence for both hurricanes. 
For example, in one case the same individual received two payments of 
$10,500 each to replace the same house, once for Hurricane Katrina and 
once for Hurricane Rita. 

It is important to note that our estimate of potentially improper and/ 
or fraudulent assistance payments associated the hurricanes Katrina and 
Rita is likely understated because it included only those registrations 
containing the same social security number and damaged address. Our $20 
million estimate would be understated to the extent to which there are 
any duplicate payments made to members of the same household using 
different social security numbers. According to FEMA, in most cases, 
payments made as a result of these registrations would also be 
duplicate--and therefore potentially improper and/or fraudulent-- 
because their policy states households are entitled to one payment for 
the same damage and/or need. Finally, as we stated in December, the 
problems we identified in our December testimony, and those that we 
identified in our earlier testimonies, further emphasize the need for 
FEMA to put preventive controls in place to minimize fraudulent and 
improper payments, and to reduce the need for collection actions after 
the fact. 

If you have any further questions or would like to discuss our 
response, please contact me at (202) 512-7455, or [email protected]. 

Sincerely yours, 

Signed by: 

Gregory D. Kutz: 
Managing Director: 
Forensic Audits and Special Investigations: 

(192242):

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