It has been almost 5 years, and the whole value of wasteful COVID-era spending remains to be being realized. A latest Division of Homeland Safety’s Workplace of Inspector Normal (OIG) report illuminates a number of examples of waste, fraud, and abuse on the Federal Emergency Administration Company (FEMA).
The OIG discovered the company overobligated “not less than $1.5 billion in funds for one state’s medical staffing grant.” Moreover, FEMA did not correctly vet funding to the state, resulting in $8.1 billion of questionable spending.
Through the pandemic, FEMA developed a streamlined course of to award reimbursements by its Public Help Program. As an alternative of awarding funding to a mission based mostly on precise prices that had been similar to present market charges, the company provided reimbursements based mostly on value estimates. The brand new course of, designed to get catastrophe funding out of the door quicker, generated much less oversight and extra fraudulent spending.
The state, which the OIG doesn’t title, obtained about $853 million from FEMA in September 2020 to handle staffing shortages at over 200 well being care services statewide. Over the following 12 months, FEMA incrementally elevated funding, finally awarding over $9 billion, which the state didn’t want. From Could 2021 to April 2023, unspent grant funds reached $4 billion, earlier than falling to $1.5 billion. FEMA was unaware of this till April 2023, when an OIG investigation was carried out. The company subsequently de-obligated $500 million of the state’s funding.
FEMA didn’t “validate value estimates or decide value reasonableness earlier than obligating funds,” in line with the OIG. One of many value estimates, which totaled $1.1 billion, was supported by one sheet of paper, which didn’t embrace itemized prices and was not carried out by a “cost-estimating skilled” (which is required below FEMA tips).
The OIG additionally discovered that FEMA failed to find out value allowability for $8.1 billion of the almost $9.1 billion awarded to the state. In August 2021, FEMA started to evaluate a 2020 award totaling $1.3 billion to find out if the mission’s bills had been appropriately documented and the mission’s funding was justified. As of April 2024, the company had not accomplished its evaluate for this quantity or any cash it had awarded to the state. The shortage of documentation has led the OIG to query $8.1 billion in FEMA spending.
On prime of the billions of {dollars} in unsupported spending, the OIG investigated a random pattern of 20 different FEMA grants and located the company awarded over $32 million price of improper funds. Six of those initiatives “didn’t have the required supporting documentation to validate completion of the work and precise prices incurred earlier than mission award and reimbursement,” in line with OIG. The report additionally discovered three FEMA employees members had been instructed in 2020 to not conduct “deep dives” when reviewing mission eligibility.
The OIG has provided seven suggestions to FEMA, which embrace conducting an audit of the state’s well being care staffing program and making certain mission prices are sufficiently documented and reviewed earlier than disbursements are given. Of the seven suggestions, OIG considers 5 to be “open and resolved” and two to be “open and unresolved.”
From the Paycheck Safety Program riddled with fraud to pointless bailouts for native and state governments, the complete value of the federal government’s spending in the course of the pandemic could by no means be identified with certainty. FEMA’s mismanagement is simply one other drop in an especially massive bucket.
