Oversight of Gulf Coast Hurricane Recovery A Semiannual ... · disaster recovery operations along the Gulf Coast. Our audits, reviews, and investigations of ... and Hurricane Recovery,

Oversight of

Gulf Coast Hurricane RecoveryA Semiannual Report

to Congress April 1, 2006—September 30, 2006

President’s Council on Integrity and Efficiency

Executive Council on Integrity and Efficiency

COVER PHOTOS

New Orleans, LA—These before and after views show the work progress on the LouisianaSuperdome seen in top aerial photo, taken on September 7, 2005, just weeks after Hurricane Katrinahit the city. The bottom photo taken on August 7, 2006 shows the new roof installed just before thereopening of the facility.

PRESIDENT’S COUNCIL on INTEGRITY & EFFICIENCY

EXECUTIVE COUNCIL on INTEGRITY & EFFICIENCY

November 2006

The Honorable Ed Whitfield

Chairman

Subcommittee on Oversight and Investigations

Committee on Energy and Commerce

U.S. House of Representatives

2125 Rayburn House Office Building

Washington, D.C. 20515

Dear Chairman Whitfield:

This report is the second in a series of semiannual reports on Gulf Coast hurricane recovery

oversight. These two semiannual reports follow Oversight of Gulf Coast Hurricane Recovery, A

90-Day Progress Report to Congress, which was published on December 30, 2005.

Gulf Coast hurricane recovery oversight is truly an effort by the entire federal Inspector General

(IG) community. This group, coordinated through the President’s Council on Integrity and

Efficiency (PCIE) and the Executive Council on Integrity and Efficiency (ECIE), is ensuring that

the audit and investigative efforts and resources of the IG community are focused on disaster-

related issues, ensuring accountability and the prevention of crimes and mismanagement. Today,

approximately 480 IG personnel are working on recovery oversight.

Richard L. Skinner, the chair of the PCIE’s Homeland Security Roundtable and the Department

of Homeland Security Inspector General, coordinates these critical PCIE and ECIE IG activities.

Under Mr. Skinner’s leadership, federal IGs have been working tirelessly to ensure that: (1)

agency internal controls are in place to prevent fraud, waste, and abuse; (2) IG investigative

activities are coordinated with the Department of Justice’s Hurricane Katrina Fraud Task Force;

(3) agency stewardship plans for hurricane relief activities are in place and operating as intended;

and, (4) the IG community is executing its hurricane relief oversight efforts in a coordinated

fashion so that its resources are used as efficiently and effectively as possible.

This report includes a new section on lessons learned. Its purpose is to develop agency and

program improvements to enhance disaster response, and to develop recommendations for

improved IG coverage of disaster relief operations and programs. We plan to track solutions,

implementing any recommendations.

Mr. Chairman, as discussed in this report, the IG community continues to be actively engaged in

disaster recovery operations along the Gulf Coast. Our audits, reviews, and investigations of

federal recovery programs, in our judgment, have and will continue to benefit the federal

government’s hurricane relief activities. In pursuing this task, we have received notable support

from you and other members of the Congress and from committee staffs. Further, we have had

the cooperation of agency officials with direct responsibility for the hurricane relief effort.

Finally, we have received excellent support from the Chairman of the PCIE and ECIE, Clay

Johnson, the Deputy Director of the Office of Management and Budget. He took an active role

in ensuring a robust oversight program.

It is a privilege for us to represent the efforts of the hundreds of dedicated IG professionals on

the frontline of disaster response and recovery.

Sincerely,

Gregory H. Friedman Richard L. Skinner Barry R. Snyder Inspector General Inspector General Inspector General Department of Energy Department of Homeland Security Federal Reserve Board Vice Chair, PCIE Chair, PCIE/ECIE Vice Chair, ECIE

Homeland Security Roundtable

PCIE ECIE Oversight of Gulf Coast Hurricane Recovery • A Semiannual Report to Congress • October 2006

table of contents

Executive Summary 1Highlights of Oversight Activities 5

EmergingOversightTrends 7ContractActions 8 LawEnforcementActivities 11

Audits, Inspections and Other Reviews 13

ContractReviews 16ManagementandPerformanceReviews 17DepartmentalSummaries 18Inspections 67

Investigations 73

DepartmentalInvestigativeCaseSummaries 75

Lessons Learned 91PCIEECIEAfterAction/LessonsLearnedReview 93LessonsLearnedandPotentialRecommendations 96

Gulf Coast Recovery Funding 107U.S.EmergencySupplementalAppropriations 109DisasterReliefFund 113MissionAssignments 114PrivateDonationsforHurricaneRecovery 116DepartmentalFundingReports 116

Section 1

Section 2

Section 3

Section 4

Section 5

Section 6


Appendix A (Web link) A1-A2FirstYearReporttotheAttorneyGeneral–September2006OfficeoftheHurricaneKatrinaFraudTaskForce

Appendix B B1-B4HurricaneRecoveryFunding–The1stEmergencySupplemental(FY2005)

Appendix C C1-C6HurricaneRecoveryFunding–The2ndEmergencySupplemental(FY2005)

Appendix D (Web link) D1-D2HurricaneRecoveryFunding–The3rdEmergencySupplemental(FY2006)Appendix E (Web link) E1-E2HurricaneRecoveryFunding–The4thEmergencySupplemental(FY2006)

Appendix F F1-F4PrivateDonationsforHurricaneKatrinaandRitaVictims

Appendix G G1-G6HurricaneFinancialProfilesbyProgramArea

Appendix H H1-H4UsefulWebSiteLinks

Appendix I I1-I6PCIEECIEContributingMembers

Appendix J J1-J6OIGCongressionalActivities

Appendix K K1-K4PCIE/ECIEOversightAuditandInvestigativeModels

Appendix L L1-L8Glossary

Appendix M M1-M8AcronymsandDefinitions

AppendiceS

eXecUtIVe sUMMaRY

O V E R S I G H T O F G U L F C O A S T H U R R I C A n E R E C O V E R Y

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Gulfport, MS, August 15, 2006—Contractors are now replacing the temporary blue roofs with permanent roofs. Hurricane Katrina destroyed countless roofs along the Mississippi Gulf Coast. (Mark Wolfe/FEMA photo)


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TheRoundtablebecamethenaturalvehicletomanagehur-ricanerecoveryoversight,underthedirectionoftheDepart-mentofHomelandSecurity(DHS)IG,RichardSkinner.Mr.SkinnerappointedMattJadacki,DeputyIGforDisasterAs-sistanceOversight,toleadthisoversighteffort.InadditiontocoordinatingtheIGs’oversighteffort,whichwillinvolveseveralyearsofwork,Mr.JadackihasformedaDisasterRecoveryWorkingGrouptohelpIGsplanfortheirresponsetofuturedisasters.

emergency FederAl FundingSinceSeptember2005,Congressapprovedfouremergencysupplementalappropriationstotaling$87.75billionfortherecoveryeffort.ThemostrecentEmergencySupplementalAppropriationsActforDefense,theGlobalWaronTerrorandHurricaneRecovery,2006,whichbecamePublicLaw109-234onJune15,2006,madeavailable$20.2billioninadditionalGulfCoasthurricanerecoveryappropriations.Ofthisfunding,DHSreceived$6.6billion,ofwhich$6bil-lionisallocatedtotheDisasterReliefFund.DoDreceived$5.36billionforavarietyofprograms,includingU.S.ArmyCorpsofEngineers(USACE)dredgingandfloodcontrolprojects,shipyardrepairs,andotherfundrestorations.TheDepartmentofHousingandUrbanDevelopment(HUD)alsoreceivedfundsthatwillflowtothestatesintheformofHUDCommunityDevelopmentBlockGrants(CDBG)forhousingandotherneeds.

overSight oF FederAl FundingAuditsandotherreviewsprovideassurancesthatfundsap-propriatedfordisasterreliefprogramsarebeingspentinaneffective,efficient,andeconomicalmanner.AsofSeptem-ber30,2006,agenciesunderreviewbytheIGshadissuedatleast8,408contractswithatotalvalueexceeding$12bil-lion.Ofthe$12billionundercontract,DHSaccountedfor$7.59billion;DoD,$2.55billion;andtheGeneralServicesAdministration(GSA),$670million.AsofSeptember30,2006,therewereauditsorreviewsof835contracts,includ-

One year after three major hurricanes

swept through the Gulf States in 2005,

some federal recovery efforts are

beginning to transition from individual

assistance, such as temporary housing,

to larger scale public assistance projects

focused on infrastructure recovery.

Meanwhile, other housing programs,

such as community development block

grants, remain in the early stages of

distribution.

Record amounts of federal funds

have been made available for the recov-

ery, totaling $87.75 billion as of Sep-

tember 30, 2006, which is an increase of

slightly more than $20 billion over the

last semiannual reporting period, end-

ing April 30, 2006.

Ongoing oversight of this massive

recovery effort by the federal Inspec-

tors General (IGs), continues to provide

valuable lessons for those planning for

future recovery efforts. Federal IGs from

22 departments and agencies have

committed 480 full-time personnel to

recovery oversight, as of September 30,

2006.

Before Hurricane Katrina, the

President’s Council on Integrity and Effi-

ciency (PCIE) and the Executive Council

on Integrity and Efficiency (ECIE) had

established a Homeland Security

Roundtable, building on collective

experience of the federal IGs, following

the September 11th attacks.

executive Summary


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ing348completedand487ongoingaudits.These835contractshadatotalcontractvalueof$8.5billion.Ofthisamount,auditorsreportedquestionedcostsof$53.6millionofwhich$33.3millionwasdeterminedtobeunsupported.Also,theOfficeofInspectorsGeneral(OIG)reportedthatfromthecontractreviews,$80.9millionintaxpayerfundswasputtobetteruse.

Auditing And other reviewSOngoingreviewsofferaretrospective,andcaninfluencechangeinatimelyfashion.Forexample,theGovernmentAccountabilityOffice(GAO)andDHSOIGperformedajointauditofDHSpurchasecardcontractsusedafterHurricaneKatrina.TheydeterminedthataweakcontrolenvironmentandbreakdownsinkeycontrolsexposedDHStofraudandabuseinitsuseofthepurchasecard.WhileDHS’sdraftPurchaseCardManualgenerallycontainedeffectivecontrolprocedures,itwasnotfinal-izedduetodisagreementsoveritsimplementation.ThisledtonewDHScardholderprocedures.

OtherreviewsincludedaDepartmentofHealthandHumanServices(HHS)assessmentofnursinghomeemergencypreparednessandresponse.TheHHSOIGrecommendedthattheCentersforMedi-careandMedicaidServicesstrengthenfederalcertificationstandardsfornursinghomeemergencyplans.ThestudyofselectednursinghomesinfiveGulfStatesreportedthatallexperiencedproblems,includingnursinghomeemergencyplansnotfollowed,missingevacuationplans,andlackofcollabora-tionbetweenstateandlocalorganizations.

ADHSOIGreviewof$102milliondistributedtotheCityofnewOrleansasexpeditedfundingfordamagesanddebrisremovaldeterminedthatthecity’saccountingsystemdidnotproperlyallocatecostsordocumentcosteligibility.

AnotherreviewbytheArmyAuditServiceof58contracts,valuedatapproximately$433million,ad-dressedtheUSACE’smanagementofemergencyrepairstoleveesandfloodwallsinthenewOrleansarea.AuditorsdeterminedthattheUSACEdidacommendablejobawardingcontracts—openlycom-petedapproximately92%ofthesefunds—butrecommendedthatfuturesolicitationsbeadvertisedinnationaltradeandmediaoutletstoensureadequatecompetition.

lAw enForcement OIGinvestigativeteamshavebeendeployedtoeachoftheFederalEmergencyManagementAgency(FEMA)JointFieldOfficesinAlabama,Mississippi,Louisiana,Texas,andFloridatoinvestigateallega-tionsoffraud,waste,andabuse.Sincethehurricanereliefandrecoveryprocesswasinitiated,federalIGshavereportedthat1,756caseswereopened.Thiscaseloadhasresultedin439indictments,407arrests,and255convictions.ThesefiguresaremorethantwicewhatwerereportedsixmonthsearlieronMarch31,2006,specifically174indictments,152arrests,and48convictions.AsofSeptember30,2006,theHurricaneFraudHotlinereceived22,647contactsorallegationsoffraud,wasteandabuse.

Meanwhile,theHurricaneKatrinaFraudTaskForce(HKFTF),managedbytheDepartmentofJustice,hasreviewedandanalyzedmorethan6,000fraud-relatedtipsandcomplaintssinceSeptember2005.(SeeAppendixAforaHKFTFWeblink.)

HIGHlIGHts


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New Orleans, LA—Residents in New Orleans’ devastated 9th Ward have most of their polling places moved to locations that suffered less damage after Hurricane Katrina. (SBA photo)

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AsofSeptember30,2006,approximately337governmentauditorsandinspectors,88criminalinvestigatorsand55supportpersonnelweredevotedtothevariousreviews.TheDepartmentofDefense(DoD)hadthelargestcontingentofauditors(134),andtheDepartmentofHomelandSecurity(DHS)hadthelargestcontingentofcriminalinvestigators(34).

emerging overSight trendS Assistance for Individuals and CommunitiesDependingonthetypeofassistanceprovided,andwhethertheassistanceisgoingtoindividuals,communities,orstateandlocalgovernments,theOfficeofInspectorsGeneral(OIG)canmakeadjustmentstotheiroversightapproachtomaximizetheirresources.

Forexample,inthenearfutureFederalEmergencyManagementAgency’s(FEMA)IndividualAssistance(IA)programwillmakefewerpaymentstoindividuals,whileFEMA’sPublicAssistance(PA)programwillincreasetheamountsoffundingforcommunities,counties,citiesandstategovernmentstoexecutelargeinfrastructurecontracts,orcontractsforotherrecoveryprograms,thatbenefitmanyandnotonlyindividuals.

WhilethistrendmaybetrueatFEMA,thecomingyearattheDepartmentofHousingandUrbanDevelop-ment(HUD)willbemanagingthistrendinreverse.Soon,HUD’ssubstantialinvestmentintherecovery,intheformofCommunityDevelopmentBlockGrants,willincreaseonbehalfofindividuals.Thesegrantsaremadetothestatesandaredistributedbythestatestoindividualsinneedofhousingrecoveryassistance,asopposedtotemporaryshelter.

Thus,14monthsafterthe2005stormssubsided,therearenowfewerinstancesofvictimsapplyingforFEMAIAandmoreinstancesofcommunities,cities,counties,andstatesapplyingforPAfunds.Eligibilityforpublicassistancedollars,usuallyprovidedintheformofgrants,maylastfor

While the one-year anniversary of Hur-

ricane Katrina has passed, the work

of rebuilding has, in many ways, just

begun. Some estimate the rebuilding

will last ten more years, while others say

it could take a generation.

More than a year after the storms

wrought devastation along the Gulf

Coast, government relief efforts remain

substantial, and oversight remains a

formidable task. Twenty-two federal

Inspector General (IG) organizations

are focused on ensuring the $87.75

billion made available in four separate

emergency supplemental spending

measures in 2005 and 2006 is properly

used during the Gulf Coast hurricane

recovery.

Just before Hurricane Katrina, the

President’s Council on Integrity and

Efficiency (PCIE) and the Executive

Council on Integrity and Efficiency

(ECIE) had established the Homeland

Security Roundtable to deal with gov-

ernment-wide homeland security issues.

After the hurricane hit, the Roundtable

became the natural forum for the IG

community to conduct its ongoing dis-

cussions of and planning for hurricane

recovery oversight. Sharing the respon-

sibility for overseeing its department’s

hurricane expenditures, each IG office

draws from the experiences, input, and

best practices of all the federal IGs.

highlights of oversight Activities

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manyyearsfollowingacatastrophicevent.Currently,theDHSOIGexpectsthatsomelimitedeligi-bilityforIAwilllikelyextendforonlyanother18months,orroughlyuntiltheendof2007.

Inaddition,thenationalFloodInsuranceProgram(nFIP),willdemandaninvestmentoftimeandotherresourcesbyDHSOIGandGovernmentAccountabilityOffice(GAO)inthecomingyear.ThenFIPwillundergoareviewbytheDHSOIGtodeterminewhethertheclaimsprocesswasmanagedaccordingtolawsandpoliciesafterthestormssubsided.

contrAct ActionSAstheone-yearmarkafterHurricaneKatrinapassed,theflurryofcontractsissuedtoaddresstheimmediateneedsofthedisasterhasabated.Manyoftheinitialcontractswereactivatedfromcontin-gencycontractsthathadbeenpreparedtoprovideimmediatereliefinanemergency.Othercontractsfollowedroutineprocurementprocedures,andhavelong-termvalue.

AsofSeptember30,2006,federalagencieshadissued8,408contracts1,withatotalvalueexceeding$12billion.Ofthe$12billionundercontract,DHScontractsaccountedfor$7.59billion;DoDcontracts,$2.55billion;andtheGeneralServicesAdministrationcontracts,$670million.

AsofSeptember30,2006,therewere835contracts2withcompletedorongoingauditsandreviews.These835contractshadatotalcontractvalueof$8.5billion.Unprecedentedoversightisrequiredforsuchamassiveeffortthatinvolvestheworkofmultiplegovernmentagenciesacrossseveralstates.

Table2-1onthenextpagepresentsabreakdownofallhurricanerecovery-relatedcontractactions,byagency.

Sole-Source ContractsAlthoughexpeditedcontractingisoftenrequiredimmediatelyafteradisaster,oncetheemergencyperiodisover,thegovernmentshouldrecompetesomecontractstointroducecompetitionintotheprocessandensurethatthegovernmentisgettingafairprice.Thisrecompetitionpracticewasnotconsistentlyfollowedinthepost-2005hurricaneenvironment.

TheIG’sroleinhurricanereliefandrecoveryoversightincludescontractreviewsandinvestigationsmanagedfromfieldofficesalongtheGulfCoast.Beingonsitehelpstodetercontractorsthatmightimproperlydischargetheircontractsduringthecrisis.Overtime,contractactionsshouldintroducefullandopencompetitionasthetimelinemovesfromdisasterresponsetorecovery.

Whenadisasteroremergencyoccurs,thegovernmentisexpectedtorespondexpeditiously.Insomecases,contractsthatunderotherconditionswouldbeopenlycompetedmaybeawardedunderasole-sourceorlimitedcompetitionbasis.Thenumberofsole-sourcecontractsfollowingadisasterresponseperiodshoulddecline,astheurgencyofthesituationsubsidesandplanningcanbeimplemented.

1 Thisincludescontractsandcontractactions,suchastaskorders,modifications,deliveryorders,etc.2 Ibid.

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contrAct ActionS, By Agency

Agency

Total Contracts

(3) < $500K > $500K Contracts Greater Than $500K by Competition Type Value of Contracts (in thousands)

Full and Open Limited Sole Source Other < $500K > $500K Total

DHS 4412 3505 907 173 1 410 323 $289,490 $7,309,767 $7,599,257

DOC - - - - - - - $5,300 $1,200 $6,500

DoD(1) - - - - - - - $94,568 $2,460,066 $2,554,634

DOE(2) - - - - - - - $0 $0 $0

DOI 889 863 26 10 2 11 3 $29,873 $23,102 $52,975

DOJ 83 75 8 - - 3 5 $4,861 $12,100 $16,961

DOL 6 4 2 - - 2 - $2,712 $2,048 $4,760

DOT 71 56 15 7 2 6 - $7,655 $391,863 $399,518

ED - - - - - - - $0 $0 $0

EPA 280 191 89 76 - 13 - $14,161 $261,194 $275,355

GSA 1886 1,658 228 35 27 153 13 $71,865 $598,856 $670,721

HHS 202 169 33 23 - 10 - $15,243 $72,113 $87,356

HUD 21 11 10 - 4 3 3 $1,060 $18,325 $19,385

nASA 37 29 8 6 2 - - $4,920 $176,704 $181,624

SBA - - - - - - - $0 $0 $0

SSA 14 13 1 - 1 - - $1,454 $600 $2,054

TIGTA 19 19 - - - - $356 $0 $356

TREAS 0 - - - - - - $0 $0 $0

USDA 459 403 56 51 1 4 - $42,798 $83,605 $126,403

USPS 29 24 5 2 - 3 - $2,176 $6,173 $8,349

VA - - - - - - - $0 $0 $0

Total 8408 7020 1388 383 40 618 347 $588,492 $11,417,716 $12,006,208

Source: 11th PCIE ECIE Hurricane Katrina Report (as of September 30, 2006)

Note 1: The total dollar value of contracts was based on data provided by OSD AT&L and is current as of September 30, 2006. DoD reported that the number of contracts data has not been determined, but the Department may have it for the next report in April 2007.

Note 2: To date, DOE has received only a small portion of the funds allocated for hurricane-relief related funding.

Note 3: This includes contracts and contract actions, such as task orders, modifications, delivery orders, etc.

table 2-1

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Indeed,post-Katrinasole-sourcecontractsingeneralhavedeclinedasaproportionoftotalcontractsawarded(withvaluesgreaterthan$500,000)withinthepastyear,asseeninTable2-2.Inthefirst90daysafterKatrina,58.8%ofcontractswereawardedsolesource.Thatnumberdeclinedto50.5%within180days.Thelateststatisticsshowthatithasdeclinedfurtherto44.5%.

Sole Source contrActS, By Agency

First 90 days (As of 12/30/05) First 180 days (As of 3/30/06) First 360 days (As of 9/30/06)

Agency Contracts Sole Source Percentage Contracts Sole Source Percentage Contracts Sole Source Percentage

>$500k > $500K >$500 K

DHS 579 378 65.28% 770 420 54.55% 907 410 45.20%

DOC 2 0 0.00% - - - - - -

DoD(1) - - - - - - - - -

DOE - - - - - - - - -

DOI 3 1 33.33% 9 2 22.22% 26 11 42.30%

DOJ 2 2 100.00% 4 3 75.00% 8 3 37.50%

DOL 2 0 0.00% 2 2 100.00% 2 2 100%

DOT 17 7 41.18% 15 6 40.00% 15 6 40.00%

ED - - - - - - - -

EPA 60 11 18.33% 87 13 14.94% 89 13 14.60%

GSA 197 130 65.99% 219 147 67.12% 228 153 67.10%

HHS 27 6 22.22% 28 6 21.43% 33 10 30.30%

HUD 7 4 57.14% 10 3 30.00% 10 3 30.00%

nASA 7 2 28.57% 7 2 28.57% 8 - 0.00%

SBA - - - - - - - - -

SSA 1 - 0.00% 1 - 0.00% 1 - 0.00%

TIGTA - - - - - - - - -

TREAS - - - - - - - - -

USDA - - - 46 - 0.00% 56 4 7.14%

USPS 1 1 100.00% 5 3 60.00% 5 3 60.00%

VA - - 0.00% - - 0.00% - - -

Total 905 542 59.89% 1203 607 50.46% 1,388 618 44.52%


Note 1: DoD reported that the number of contracts data has not been determined, but the Department may have it for the next report in April 2007.

table 2-2

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lAw enForcement ActivitieSOIGinvestigativeteamshavebeendeployedtotheFEMAJointFieldOfficesinAlabama,Mississippi,Louisiana,Texas,andFloridatoinvestigateallegationsoffraud,wasteandabuse.Investigatorsarecoordinatingwiththeirrespectivefederal,state,andlocallawenforcementagenciesandprosecutorsaspartoftheirfrauddetectionandprotectioninitiatives.TheyhavealsoinitiatedinvestigationsintoallegationsreceivedthroughtheHurricaneFraudHotlineandothersources.

Sincethehurricanereliefandrecoveryprocesswasinitiated,throughSeptember30,2006,the22federalIGsinvolvedinhurricanerecoveryoversighthavereported439indictments,407arrests,and255convictions.ThisisalargeincreaseoverthefiguresreportedsixmonthsearlieronMarch31,2006,whentheyreported174indictments,152arrests,and48convictions.Therehavealsobeen22,647contactsmadetotheHurricaneFraudHotline,anincreaseofmorethan8,262contactsoverthe14,385hotlinecontactsreportedduringthefirstsixmonths.

Hurricane Katrina Fraud Task Force ActivitiesThisnationaltaskforce’sJointCommandCenter,establishedinBatonRouge,LA,followinghurricanesKatrinaandRitaisheadedbyU.S.AttorneyDavidR.DugasoftheMiddleDistrictofLouisiana.Thetaskforcehasreviewedandanalyzedmorethan6,000fraud-relatedtipsandcomplaintsintheoneyearsinceKatrina.Thirty-threeagenciesandDepartmentofJustice(DOJ)componentshaverepresenta-tivesassignedtotheJointCommandCenterordesignatedaspointsofcontacttofullyintegrateandcoordinatethenationallawenforcementresponsetofraudandcorruption.ThetaskforcereportedindicationsthattheprosecutionofKatrinafraudcaseswashavingadeterrentimpact,withFEMAandtheAmericanRedCrossreportingthereturnofmorethan$18.2millioninfundsbyrecipientsofIndi-vidualAssistance(IA)benefits.

Additionally,thetaskforceisreviewingfindingsin Expedited Assistance for Victims of Hurricanes Katrina and Rita: FEMA’s Control Weaknesses Exposed the Government to Significant Fraud and Abuse, publishedonJune16,2006bytheGAOofpotentially$1.6billioninallegedlyfraudulentFEMAIAclaims.

The 2006 New Orleans ConferenceAfterafullyearofvigorousactivity,thetaskforcehelditsfirstannualconferenceinnewOrleansonSeptember13,2006.Thepurposeofthisconferencewastotakestockoftheyear’sactivity,establishandreviewimportantlessonslearned,anddiscussthefutureworkofthetaskforce.Thisconferencebroughttogethernearly150seniorlevelandoperationalrepresentativesfromfederal,state,andlocallawenforcementagencies,agroupthatnowincludestheofficesoftheMississippiandLouisianaStateAttorneysGeneral,theMississippiStateAuditor’sOffice,theLouisianaIG,andotherkeystateandlocalpartners.Thecross-cuttingparticipationdemonstratestheeffectivenessofthetaskforce’snationalresponseanditsunprecedentedeffortinthefightagainstdisaster-relatedassistancefraud.

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aUdIts, InspectIons, and otHeR ReVIews


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Cameron, LA, May 20, 2006—FEMA asbestos inspectors George Legere, Walter Coleman, Jr., and Rocky Craigen check for asbestos in preparation for demolition. Crews and landfill operators need to know which hazardous materials are present. (Marvin Nauman/FEMA photo)

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• AsofSeptember30,2006,theagenciesunderreviewbytheIGshadissuedatleast8,408contractswithatotalvalueexceeding$12billion.Ofthe$12billionundercontract,theDepartmentofHomelandSecurity(DHS)accountedfor$7.59billion;theDepartmentofDefense(DoD),$2.55billion;andtheGeneralServicesAdministration(GSA),$670million

• AsofSeptember30,2006,therewere835contracts1withcompletedorongoingauditsandreviews.These835contractshadatotalcontractvalueof$8.5billion.Unprecedentedoversightisrequiredforsuchamassiveeffortthatinvolvestheworkofmultiplegovernmentagenciesacrossseveralstates(SeeTable3-1below)

• AsofSeptember30,2006,approximately337govern-mentauditorsandinspectorsweredevotedtothevariousreviews,withtheDoDhavingthelargestnumberofauditors(134)

• The835contractauditsincluded348auditscompletedand487ongoingaudits.Ofthe$8.5billionintotalcontractvalue,auditorsreportedquestionedcostsof$53.6million,ofwhich$33.3millionwasdeterminedtobeunsupported.Also,theOIGsreportedthatfromthecontractreviews,$80.9millionintaxpayerfundswereputtobetteruse.Finally,theOIGsreportedthatasaresultofthesereviews,$2.1millionwasdeobligated.

1 Thisincludescontractsandcontractactions,suchastaskorders,modifications,deliveryorders,etc.

Since hurricanes Katrina, Rita, and

Wilma struck America’s Gulf Coast, the

Inspectors General (IGs) for 22 federal

departments and agencies responsible

for auditing and evaluating the relief

efforts in that region have coordinated

their activities through the President’s

Council on Integrity and Efficiency

(PCIE) and the Executive Council on

Integrity and Efficiency (ECIE). The Gov-

ernment Accountability Office (GAO)

is also helping to oversee the effort.

Even though more than 14 months have

passed since the storms devastated

areas of the Gulf Coast, government

relief efforts remain substantial, and so

the auditors, inspectors, and investiga-

tors continue to face a formidable task.

Audit and review statistical highlights

for this reporting period include:

Audits, inspections, and other reviews

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AswiththeApril30,2006,PCIE ECIE Gulf Coast Hurricane Recovery Semiannual Report to Congress,thisreportfocusesonfraudandwasteprevention,improvingprogramoperations,andprotectingbeneficiaries,withauditorsandinspectorsperformingthefollowingwork:• Reviewingcontrols• Monitoringandadvisingdepartmentofficialsoncontracts,grants,andpurchasetransactionsbefore

theyareapproved• Meetingwithapplicants,contractors,andgranteestoadvisethemoftherequirementsandtoassess

theircapabilitytoaccountforthefunds• Reviewingprogramoperations,managementpractices,andbeneficiaryprotectionsinprograms

madeparticularlyvulnerableintheaftermathofthehurricanes.

Inadditiontocontractreviews,auditorshavereviewedpurchasecardproceduresandconductedothermanagementreviews.(SeeTable3-2onthenextpage.)

contrAct reviewS, By Agency

Agency Number of Reviews Value of Reviews (in thousands)

Total In Process Completed Total In Process Completed

DHS 311 142 169 $3,941,553 $2,452,133 $1,489,420

DOC 1 1 - $6,500 $6,500 -

DoD 11 7 4 $2,421,608 $2,172,608 $249,000

DOE - - - - - -

DOI - - - - - -

DOJ 1 - 1 $5,200 - $5,200

DOL 6 5 1 $4,760 $3,325 $1,435

DOT 1 1 - $247,023 $247,023 -

ED - - - - - -

EPA 136 1 135 $259,409 $981 $258,428

GSA 255 255 - $695,767 $695,767 -

HHS 72 63 9 $92,682 $66,466 $26,216

HUD 3 - 3 $22,880 - $22,880

nASA 33 11 22 $89,160 $11,243 $77,917

SBA - - - - - -

SSA - - - - - -

TIGTA - - - - - -

TREAS - - - - - -

USDA - - - - - -

USPS 4 1 3 $8,349 - $8,349

VA 1 - 1 $709,440 - $709,440

Total 835 487 348 $8,504,331 $5,656,046 $2,848,285

Comparedto:1st180days(2) 535 289 246


Note 1: Data is not provided for comparison purposes. Some reviews represent audits of multiple grants, mission assignments, and other non-contract vehicles. Some reviews use Yellow Book standards.

Note 2: 9th PCIE ECIE Hurricane Katrina Report (as of March 30, 2006).

table 3-1

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mAnAgement And perFormAnce reviewS, By Agency

Agency Purchase Cards Non-Contract Reviews

Grants Mission Assignments Other

Transactions ($)(in thousands)

% of Transactions Reviewed In Process Complete In Process Complete In Process Complete

DHS $22,687 100% 22 32 2 - 19 9

DOC $289 0% 1 - - - - -

DoD - - - - 2 1 8 4

DOE - - - - - - 1 1

DOI $19,711 0% - - - - 1 -

DOJ $6,000 63% - 1 - - - 1

DOL $717 0% 3 5 - - 5 8

DOT $1,205 0% 2 2 2 4 1 2

ED - - 7 1 - - - -

EPA $1,480 50% - - 0 5 - -

GSA $107 0% - - 1 - 1 -

HHS $2,201 0% 1 - - - 2 1

HUD - - - - - - 3 -

nASA $135 91% - - 1 - - -

SBA - - - - - - 7 5

SSA $224 0% - - 1 - - -

TIGTA $79 0% - - - - 1 9

TREAS - - - - - - 2 -

USDA $20,601 0% 1 - 10 4 11 1

USPS $17,750 100% - - - 1 - 10

VA - - - - - - 3 -

Total $93,186 - 37 41 19 15 65 51

Comparedto:1st180days(3) $81,880 - 41 12 19 7 51 21


Note 1: Data is not provided for comparison purposes. Some reviews represent audits of multiple grants, mission assignments, and other non-contract vehicles. Some reviews are Yellow Book audits.

Note 2: A total universe cannot be derived for purchase card transactions related to Hurricane Katrina.

Note 3: 9th PCIE ECIE Hurricane Katrina Report (as of March 30, 2006)

table 3-2

Auditorsandinspectorsareresponsibleforidentifying,asearlyaspossible,instancesoffraud,waste,andabuse.ThehurricanesremainvividmemoriesformanyAmericans,particularlythosewholivedorstillliveintheaffectedregionorwhohavefamilyandfriendsthere.ThedamageinflictedbythesenaturaldisastersonAmericansshouldnotbecompoundedbyanyoneinvolvedinfraud,waste,orabuseoffederaldollars.ThePCIEECIEauditorsandinspectorsprovidinghurricaneoversightarededicatedtoprotectingtheinterestsofthoseAmericanswhoareonlybeginningtoaddressthedisrup-tionstotheirlives.

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depArtmentAl SummArieS

depArtment oF homelAnd Security Management Advisory Reports Debit Card Overdrafts (GC-HQ-06-51, August 30, 2006) AuditorsdeterminedthatinSeptember2005,theFederalEmergencyManagementAgency(FEMA)issuedatleast10,954debitcards,valuedatmorethan$21.9million,tohurricaneevacueesatshel-tersinDallas,Houston,andSanAntonio.Eachcardhadaninitialvalueof$2,000.FEMAlateraddedvaluetosomecards.BylateSeptember2005,284cardholdershadoverdraftsorinstanceswherecardholdersreceivedmorefundsthanFEMAauthorized.Thatnumberincreasedtomorethan1,400byDecember2005andto2,300(21%ofcardsissued)byJuly2006.

Thereasonsforoverdraftsvaried.Oftheoverdraftsreviewedwithacombinedvalueof$28,433,miscellaneouspoint-of-saletransactionsaccountedforabout67%ofthenumberofoverdrafts,butonly5%ofthetotalamountoverdrawn.Carrentalagenciesandhotelsaccountedfor22%ofoverdrafttransactionsandmorethan71%ofthetotalamountoverdrawn.Cashwithdrawals,althoughrelativelyfewinnumber,accountedfor14%ofthetotalamountoverdrawn.

AuditorsrecommendedthatFEMAdothefollowing:• FormalizewiththeTreasuryDepartmentthetermsandresponsibilitiesforresolvingoverdrafts,

includingtherecoveryoffunds• Deactivatealldebitcardsandaccountsassoonaspracticable,afterprovidingcardholderswritten

notification• Stopaddingfundstodebitcards.

Hurricane Katrina Activities, City of Austin, Texas (GC-TX-06-32, April 6, 2006)ThecityofAustinreceived$44millionfromtheTexasDivisionofEmergencyManagement,aFEMAgrantee,foremergencyshelter,food,security,andinterimhousingforapproximately3,400evacuees.Auditorsdeterminedthatthecityhadaneffectivesystemtoaccountforandensureappropriateuseofthosefunds.However,theawardexceededthecity’sneedsby$21.5million;thecityearnedinterestonthefundsadvanced;anditdidnotdisposeof50personalcomputerspurchasedwiththefunds.

AuditorsrecommendedthatFEMAreducethegrantawardby$21.5million,requirethecitytoremitinterestearned,andeitherrecovertheremainingvalueofthe50computersorensurethecityusesthemforotherfederallyfundedprograms.

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Starship Facility Renovation Project, Anniston, Alabama (GC-HQ-06-52, September 6, 2006)FEMAspent$7milliontorenovatebuildingsattheabandonedFortMcClellanmilitarybaseinAnniston,Alabama,ashousingforupto660Katrinaevacuees,butfewerthan20residentswereinplacebeforetheprojectwasdiscontinuedinOctober2005.AuditorsdeterminedthatFEMAdidnotfollowproperchannelsofauthoritynordiditexercisesoundjudgmentinapprovingthefacilityfortemporaryhousing.FEMAprovidedlittleguidancetothecontractor,andcontractoversightwasinadequate.

AuditorsrecommendedthatFEMAdothefollowing:• Explorelegalavenuestorecoveritsinvestmentinthefacility• Strengthenmanagementofalternativehousingfordisastervictimsandrequirethathousingoffi-

cialsdeterminethatfacilitiesareacceptablebeforeacquiringthem• Requirethathousingdecisionsbeapprovedinwritingandcoordinatedwithfieldandheadquarters

recoverymanagers.

Assistance to Eligible Evacuees in Need of Housing (GC-HQ-06-41, June 9, 2006)FEMAreimbursedtheAmericanRedCrossforhotelandmotellodgingofsomeKatrinaevacuees.Auditorsreviewedthereimbursementtodeterminewhetherlodgingrateswerereasonable,allowable,andnecessary;whetherevacueeswhoreceivedlodgingwereeligible;andwhethercontractingpracticeswereeffective.DuringtheDHSOIGreview,theRedCrossidentifiedunallowablechargesitbilledtoFEMAforlodgingRedCrossemployeesandvolunteers.RedCrossprovidedweeklyupdatesofunal-lowablechargesandreimbursedFEMAfortheunallowablecharges.

AuditorsrecommendedthatFEMAdeterminetheextentofunallowablecharges,initiatecollectionprocedureswiththeRedCross,andestablishcontrolstodetermineandpreventfutureunallowablechargesunderlodgingcontracts.Afinalreportispending.

Hurricane Wilma Activities for Miami-Dade County, Florida (GC-FL-06-33, April 6, 2006)Miami-DadeCountyreceived$162.9millionfromtheFloridaDepartmentofCommunityAffairs,aFEMAgrantee,fordebrisremovalactivitiesafterHurricaneWilma.

Auditorsidentified$1.5millioninpotentialduplicateadministrativechargesrelatedtothecounty’sretentionof2.25%ofcontractors’invoicebillingstohelpdefrayprocurementcosts.Auditorsrecom-mendedthatFEMAnotifythecountythattheduplicatechargesareineligibleforFEMAfunding.Auditorsalsoreportedthat$72millionofthe$144millionawardedfordebrisremovalactivitiesshouldbede-obligated,becausethefinalcostwouldbeabout50%belowtheoriginalestimate.

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Review of Hurricane Wilma Activities for the City of Fort Lauderdale, Florida (GC-FL-06-50, August 14, 2006)ThecityofFortLauderdalereceived$24.6millionfromtheFloridaDepartmentofCommunityAffairs,aFEMAgrantee,fordebrisremoval.Despitefederalrestrictionsontimeandmaterialcontracts,theauditreportshowedthecityretained14contractorsunderarrangementsthatwereinviolationofthefederalrestrictionsandpaidthem$5.9millionforworkthatlasted370hours,300hoursbeyondthepermissiblelimit.Moreover,contractswereawardedwithoutdeterminingwhethermoresuitablearrangementsexistedwithoutaceilingprice.

Auditorsrecommendedthat,inconjunctionwiththeFEMAgrantee,theDirectorofFEMA’sFloridaLong-TermRecoveryOfficedothefollowing:• Instructthecity,forfuturedeclarations,tocomplywithfederalregulationsandFEMAguidelines

governingcontracting• Informthecitythat$1.1millionofthe$5.9millionintime-and-materialcontractchargesrepre-

sentsunreasonablecostsnoteligibleforFEMAfunding.

Reimbursements for Other Needs Assistance Items (GC-HQ-06-34, April 19, 2006)AuditorsreviewedpaymentstoapplicantsasaresultofhurricanesKatrina,Rita,andWilmaforitemsqualifyingunder“otherneedsassistance”(OnA)provisions(specifically,chainsawsandgenerators)anddeterminedthatcontrolshadnotbeenimplementedorwereineffectiveatpreventingoverpay-ments.Applicantsreceivedpaymentsforthemaximumallowedamountregardlessofactualcosts.

AuditorsrecommendedthatFEMAdothefollowing:• DevelopandimplementenhancementstothenationalEmergencyManagementInformation

System(nEMIS)toensurethatactualpurchaseamountsarerecordedduringfieldinspectionsandsystematicallycomparedtomaximumamountsauthorized

• Reviewandtestsystemandmanualreviewcontrolsforclaimsthatareprocessedmanually• Developaplantodetermineandrecoupanyfuturemoniesissuedforamountsgreaterthanactual

purchasepriceormaximumamountallowed,whicheverislesser• Researchandinstituteaprocessforassistingindividualswhohavelegitimatefinancialhardships

butareunabletomaketheinitialpurchaseforqualifyingitems.

Cannibalization of Travel Trailers by Bechtel (GC-HQ-06-35, April 21, 2006)AuditorsconfirmedthatBechtelnational,Inc.,aFEMAcontractor,cannibalized36traveltrailersandthatotherswerenotmissioncapable.Bechtelusedthetrailerparts,includingbatteries,propanetanks,andothersmallitems,torepairtrailersthatwereeitherdamagedornotmissioncapable.

AuditorsdeterminedthatBechteldidnotcomplywithcontractrequirementsthatitreporttoFEMAanypropertyreceivedinconditionnotsuitableforuse.AuditorsalsoreportedthatFEMAdid

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notinspectthetrailersbeforeacceptingthem.Somedeficienttrailersmayhavebeeneligibleunderthemanufacturer’swarranty,butBechtel’sdecisiontocannibalizedamagedtrailersmayhavevoidedthatwarranty.

AuditorsrecommendedthatFEMAdothefollowing:• Requirethecontractingofficer’stechnicalrepresentativestophysicallyinspectcontractorstoragesitesto

ensurethatcontractorsreportdamagedandnon-mission-capabletrailers• Determinetheresponsibilityforthedamagedtrailersandtakeappropriateactiontoreturnorrepair

damagedtrailersortorecovertherepaircostthroughthewarranty.

Review of Hurricane Katrina Activities, City of Houston, Texas (GC-TX-06-58, September 27, 2006) ThecityofHoustonreceived$252.6millionfromtheTexasDivisionofEmergencyManagement,aFEMAgrantee,forinterimhousing,projectmanagement,andsheltercosts.Theawardprovided100%FEMAfundingforupto100,000evacueesin34,000apartments.

Auditorsdeterminedthatthecitydidnotproperlyaccountforcertaininterimhousingcosts,repre-senting$222.3millionofthe$252.6million.Also,thecity’seffortstocorrectitsaccountingproblemsledtoescalatingprojectmanagementcosts,andthecityearnedapproximately$1millionininterestonfundsadvancedbyFEMA.

AuditorsrecommendedthatFEMAmonitorprojectmanagementcoststoensureexpendituresareusedonlyonapprovedactivities.TheyalsorecommendedthatFEMArequirethecitytoremitinterestearnedontheFEMAfundsasrequiredbyfederalregulation.

New Orleans Residential Damage Assessments (GC-HQ-06-53, September 27, 2006) ThecityofnewOrleansDepartmentofSafetyandPermitsconsidersappealsfromhomeownersrelatedtoresidentialdamageassessmentsperformedbythecityanditscontractors.Underthestan-dardrulesofFEMA’snationalFloodInsuranceProgram(nFIP),damageassessmentsthatexceed50%ofmarketvaluerequirehomeownerswhorebuildtomeetfloodprotectionrequirements.

Auditorsdeterminedthat,oftheappealssubmittedwithratingsabove50%followingKatrina,thecitylowereddamageratingsbelow50%fortheoverwhelmingmajorityanddidnotmaintaindocumen-tationtosupportabout95%ofthosepropertieswithlowerratings.Thecityalsodidnotperformsiteinspectionsofthedamagedhomesanddidnothavequalitycontrolmeasuresfortheappealsprocess.However,theinitialinspectionsappearedtohavebeenflawedbecauseinspectorsreliedonexternalinspectionsonlyandusedaquestionablemethodology.Therefore,auditorsquestionedtheaccuracyofboththeinitialinspectionprocessandtheappealsprocess.

AuditorsrecommendedthatFEMArequirethecitytoretainsupportingdocumentationforappeals,re-evaluateformulasforinspections,andconsiderre-inspectingasampleofallsubstantiallydamagedresidencestodeterminetheaccuracyofinitialinspections.

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Review of St. Tammany Parish Payments to Contractors (GC-LA-06-57, September 27, 2006) AuditorsactedonacongressionalinquiryaboutallegationsthatSt.TammanyParishdidnotmaketimelypaymentstocontractorsfordebrisremoval,andthatcontractorsinturndidnotpaysubcontrac-tors.ItwasallegedthattheParishdidnotpayontimebecauseitwasconcernedthatFEMAmightnotreimbursetheParish(FEMApolicyprohibitscontractpaymentscontingentonFEMAreimbursement).

Accordingtotheauditreport,contractworkwassubstantiallycompletebyMarch2006,buttheParishhadpaidtheprimecontractoronly50%oftheamountdueasofAugust2006;theprimecontractorhadpaidthesubcontractorsevenlessthan50%oftheirbillings.Parishofficialssaidthepaymentsweredelayedbecausetheywerereviewingthebillsforaccuracy.

AuditorsrecommendedthatFEMAencouragetheParishtoexpeditetheprocessandensurethatcontractorpaymentsarenotcontingentonFEMAreimbursement.

Review of Hurricane Katrina Activities, Dallas Housing Authority, Dallas, Texas (GC-TX-06-43, June 16, 2006) Accordingtotheauditreport,theTexasDivisionofEmergencyManagement,aFEMAgrantee,gave$29milliontotheDallasHousingAuthority(DHA)toprovideapproximately10,800hurricaneevac-ueeswithinterimhousing.TheDHAhadaneffectivesystemtoaccountforandensuretheappro-priateuseofdisastergrantfunds.However,theDHAearnedapproximately$206,000ininterestongrantfundsadvancedbyFEMAandgenerated$37,000inprogramincomethroughfurnituresalesto

Houston, TX—Hurricane Katrina evac-uees fill the floor of Houston’s Astrodome, which became temporary home to thou-sands. (Andrea Booher/FEMA photo)

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evacuees.FederalregulationsrequiresubgranteestoremitinterestandprogramincometoFEMA.AuditorsrecommendedthatFEMArequiretheDHAtoremitinterestearnedandprogramincome

fromfurnituresales.

Review of Hurricane Katrina Activities for Magnolia Electric Power Association (GC-MS-06-49, August 2006) TheMississippiEmergencyManagementAgency(MEMA),aFEMAgrantee,gave$10.7milliontoMagnoliaElectricPowerAssociationforemergencyprotectivemeasuresanddebrisremoval.Auditorsdeterminedthattheassociation’sexpendituresincluded$88,933ofineligibleovertimesalarycostsformanagersandsupervisors.Accordingtotheauditreport,followingthehurricane’spassageandapprovalofFEMAfunding,theassociationmodifieditsovertimepolicytomakemanagersandsupervi-sorseligibleforovertimepayduringtheperiodAugust29–September25,2005.AuditorsdeterminedthatthoseovertimepaymentswereineligibleforFEMAfunding.

AuditorsrecommendedthattheFederalCoordinatingOfficerforHurricaneKatrinainMississippi,incoordinationwithMEMA,disallowtheineligibleovertimecosts.

Review of Classification and Distribution of Hurricane Katrina Disaster Relief Costs(GC-HQ-06-45, July 11, 2006) AuditorsdeterminedthatFEMAchargeddirectcostsforAlabama,Louisiana,andMississippireliefeffortstoanadministrativecostcategory,resultinginoverstatedadministrativecostsandunderstateddirectcosts.TheyalsodeterminedthatFEMAchargedcoststotheMississippidisasterthatshouldhavebeendistributedamongthethreestates.Therefore,FEMAprovidedinaccurateinformationtomanagers,Congress,andthepubliconhowtaxpayerfundswerespent,accordingtotheauditreport.

AuditorsrecommendedthatFEMArevisetheclassificationsystemtoaccuratelydeterminedirectprogramandadministrationcostsandtoestablishadditionalaccountstoensureaccuratereporting.TheyalsorecommendedthatFEMAdevelopamethodologytoestimateanddistributecostsamongstateswhengoodsandservicesarenotstate-specific.

Review of FEMA Policy for Funding Public Assistance Administrative Costs (GC-HQ-06-40, April 28, 2006)FEMA’ssystemofprovidingassistanceviaanadministrativeallowanceforpublicassistancegrants,alongwithasystemofstatemanagementadministrativegrantstocoverneedsnotmetbytheallow-ance,createsthepotentialforexcessfundingandafinancialwindfallforstategrantees.

AuditorsrecommendedthatFEMAestablishmanagementcostratestoreplaceboththeadmin-istrativeallowanceandthestatemanagementgrantsasrequiredbytheStaffordAct.Intheinterim,theyrecommendedthatFEMArequirestategranteestoestablishbudgetsforadministrativeallow-ances,submitperiodicfinancialstatusreports,andrefundamountsnotusedundertheadministrativeallowances.

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Interim Review of City of New Orleans (GC-LA-06-56, September 27, 2006) Thecityreceivedmorethan$102millioninexpeditedfundingforhurricanedebrisremovalandinfra-structuredamages.Accordingtotheauditreport,thecity’saccountingsystemdidnotproperlyallocatecostsordocumentcosteligibility.

AuditorsrecommendedthatFEMAensurethatthecityestablishanaccountingsystemthatfacili-tatesthereconciliationoffinalclaimsforspecificprojects,includingonlypropercosts.Theyalsorecommendedthatcontractsbeamendedtoensurecompliancewithfederalrequirementsandthatthecityproperlymonitorcontractingactivities.

Interim Review of St. Bernard Parish (GC-LA-06-54, September 27, 2006) TheParishreceivedmorethan$31millioninexpeditedfundingrelatedtoKatrina,alongwithotherFEMAfunding,toaddressdebrisremovalandinfrastructurechallenges.AuditorsdeterminedthatParishmanagementdidnotallocatecostsproperlyordocumentcosteligibility.TheParishalsodidnotcomplywithfederalcontractingproceduresormaintainaccountabilityforcapitalassetpurchases.

AuditorsrecommendedthatFEMA,incoordinationwiththestateandtheParish,ensuresthattheParishestablishedanaccountingsystemtoreconcilethefinalclaimsforspecificprojects,includingonlythosecostsproperlyallocableandeligibleforthoseprojects.Auditorsalsorecommendedthatcontractsbeamendedtoensurecompliancewithfederalrequirements.

Joint dhS - gAo report Purchase CardsControl Weaknesses Leave DHS Highly Vulnerable to Fraudulent, Improper, and Abusive Activity (GAO-06-1117, September 28, 2006)InSeptember2006,theDHS-IGpublishedajointauditreportwiththeGAOregardingDHS’useofthefederalpurchasecardforthousandsoftransactionsrelatedtohurricanereliefoperations.Inthatreview,theteamreportedthatinadequatestaffing,insufficienttraining,andineffectivemoni-toring,alongwithinconsistentpurchasecardpoliciescontributedtoaweakcontrolenvironmentand

New Orleans, LA, May 11, 2006—Workers begin removing private property debris in the 9th Ward and putting it in curbside piles for removal to debris dump sites. FEMA is funding private property debris clean up. (Marvin Nauman/FEMA photo)

25


breakdownsinspecifickeycontrols.TheGAOandDHSOIGreportedalackofdocumentationthatkeypurchasecardinternalcontrolswereperformed.Basedonastatisticalsample,theyestimatedthat45%ofDHS’purchasecardtransactionswerenotproperlyauthorized,63%didnothaveevidencethatthegoodsorserviceswerereceived,and53%didnotgiveprioritytodesignatedprocurementsources.Theyalsoreportedcardholderswhofailedtodisputeimpropercharges,whichresultedinlossestothefederalgovernment.

Theweakcontrolenvironmentandineffectiveinternalcontrolactivitiesallowedpotentiallyfraudu-lent,improper,andabusiveorquestionabletransactionstooccur.Althoughthisworkwasnotdesignedtoidentify,andtheycouldnotdetermine,thefullextentoffraud,waste,andabuse,theteamdididen-tifynumerousexamplesofpotentiallyfraudulent,improper,andabusiveorquestionabletransactions.Inaddition,poorcontroloveraccountablepropertyacquiredwithpurchasecardsmayhaveresultedinlostormisappropriatedassets.Toprovidereasonableassurancethatfraud,waste,andabuserelatedtotheuseofpurchasecardsisminimized,theteamrecommendedthatDHS(1)makechangestothedraftpurchasecardmanualandissueafinal,agency-wideversion;and,(2)establishpoliciesandprocedurestoensuremoreeffectiveoversightandenforcementofthepurchasecardprogram.DHSconcurredwithGAO’srecommendations.(Linkto:http://www.gao.gov/new.items/d061117.pdf)

Ongoing ReviewsReview of FEMA’s Solicitation and Award of Temporary Housing Maintenance and Deactivation ContractsAuditorsareexamining36FEMAtaskordercontractstomaintainanddeactivatetrailersinAlabama,Louisiana,Mississippi,andTexasfollowingHurricaneKatrina.Theauditorsarefocusedonallega-tionsbyseveralunsuccessfulbidderswhohavemadethefollowingcomplaintsaboutFEMAtoFEMA,Congress,andthemedia:• Providedinconsistentinformationtobidders• Awardedcontractstounqualifiedbidders• Awardedcontractstocontractorswithexcessivecosts• Didnotproperlyconsidersmallandminority-ownedbusinesses• Providedinadequatedebriefingstounsuccessfulbidders• Awardedcontractsto“lowball”bidders• Intendedtodestroydocumentationsupportingunsuccessfulbids.

Selected Components of FEMA’s Individual and Households ProgramWithregardtoFEMA’sIndividualAssistanceprogram,auditorswillexaminewhethertheagencyeffi-cientlyandaccuratelyexpeditedassistanceclaimsprocessed;howFEMAmanagesrecertificationforrentalassistance;andhowFEMAensuresrecoupmentofoverpayments,duplicatepayments,andpaymentstoineligiblerecipients.

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FEMA’s Technical Assistance ContractsThisauditwillexaminewhether$3billioninsole-sourcecontractsawardedtofourcompaniesforinstallation,operations,maintenance,anddeactivationoftemporaryhousingunits,amongothertasks,wasproperlyawardedandexecuted.Auditorswilldeterminetheadequacyofcontractdocuments,whetherreasonablepriceswerepaid,theeffectivenessoftheinspectionandpaymentprocesses,theeffectiveuseofwarranties,andhowwellFEMAadheredtoeffectivecontractingpractices.

Contractor Billings for Hotels and MotelsImmediatelyafterHurricaneKatrina,theAmericanRedCrossprovidedhotelandmotelroomsforevacueesuntilOctober24,2005,undera$250millioncontract.Subsequently,FEMAassumedresponsibilityforprovidinghotelandmotelroomsandawardedataskorderunderaGSAcontract.

Auditorswilldeterminewhetherratesfortemporaryhousingwerereasonable,allowable,andmeasurable;whetherevacueeswereeligibletoreceivelodging;andwhetherFEMAandtheRedCrossfollowedeffectivecontractingpractices.

FEMA Mission AssignmentsAuditorsarereviewingmajorFEMAmissionassignmentstofiveDHScomponents:FederalProtec-tiveService,U.S.CoastGuard,U.S.CustomsandBorderProtection,U.S.ImmigrationandCustomsEnforcement,andthenationalCommunicationsSystem.Auditorswilldeterminewhether:• Thoseassignments,withatotalvalueof$775million,weremanagedtosatisfymission

requirements• Fundswerespenteffectivelyandaccuratelyaccountedfor• Contractingfollowedproperprocurementprocedures• Adequatedocumentationwasmaintained• Purchasedpropertywasmanagedaccordingtogoverninglawsandregulations.

FEMA Sheltering and Transitional Housing for EvacueesAuditorswilldeterminewhetherFEMA’stransitionalhousingprogrammetneedsanddetermineanyweaknessestobeaddressed.HurricanesKatrinaandRitaproducedmorethanonemillionevacuees,manyofwhomstillliveintransitionalhousing.

FEMA’s Property ManagementAuditorswillevaluatehowpersonalpropertyisacquired,received,issued,disposedof,controlled,andtrackedbytheJointFieldOffices(JFOs)agencylogisticscenters,territorylogisticscenters,andremotestoragesitesinvolvedindisasteroperations.Personalpropertyreceivedthroughinternationaldonationsalsowillbeincludedinthisaudit.

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Potential for Duplication Among Federal Disaster Assistance ProgramsTheauditorswilldetermineprogramsandareaswithinthefederalgovernmentthatareatriskofprovidingduplicatebenefitstodisastervictims.Thisisahigh-levelreviewratherthananefforttodeterminespecificincidentsofduplication.

Improved Intergovernmental Coordination and Data Sharing Among Federal AgenciesAuditorswilldeterminehowagenciescoordinateandsharedataandhowtheymightimprovedisasterresponseandrecovery.numerousfederalagenciescollectdatathatmaybenefitFEMAinactivities,suchasdeterminingeligibilityofindividualsforassistanceandpreventingduplicatepayments.Simi-larly,FEMAdatamightbeusefultootheragencies.

Planned Audits and ReviewsReview of Disaster Recovery Assistance GrantsAuditorswillexaminegranteesandsubgranteesnationwide,focusingonlargegrants(generallyinexcessof$3million)withsuspectedproblemsandareasofinteresttoCongressandFEMA.Auditswillcoverbothopenandrecentlyclosedapplicationsandprojects,andfocusoncostsaswellastheeligi-bilityofthegrantapplicantandthegrant-fundedwork.

Assessment of FEMA’s Readiness to Respond to the Next Catastrophic DisasterFollowingHurricaneKatrina,manyorganizationsidentifiedseriousproblemsthatresultedinFEMA’sfailuretoeffectivelyrespond.FEMAhasworkedtoimprovereadinessandnowclaimstobebetterpreparedtorespondtothenextdisaster.AuditorswilldeterminewhetherFEMAidentifieddeficienciesinitsresponsetoHurricaneKatrinaandimplementedimprovements.

FEMA Acquisition Management Review FEMAwasnotsystematicallywell-poisedtoprovidethekindofacquisitionsupportneededforacata-strophicdisaster,suchasHurricaneKatrina.AuditorswillconductanacquisitionmanagementreviewatFEMA,addressingthefollowingissues,amongothers:• Organizationalalignmentandleadership• Policiesandprocesses• Acquisitionworkforce• Informationmanagement

ThisreviewwilldeterminewherethereareopportunitiestoimprovetheefficiencyandeffectivenessofFEMA’sacquisitionmanagementandmonitoringeffortsinprovidinggoodsandservicesfordisasterresponseandrecovery.Auditorswillgeneratereportsonindividualprocurementissuesandwillbe

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followedbyacappingreportthatmeasuresFEMA’sprogressinimprovingacquisitioncapabilities.

Multilayered Disaster Contracts IntheaftermathofHurricaneKatrina,FEMAawardedmorethan$7billioninfederalcontractstohundredsofcompanies.TheIGcommunityandGAOhavereportedthatthemanagementandover-sightofthesedisastercontractshasbeenpoor.Auditorswilldeterminetheextentofmultilayereddisastercontractsanddocumentvariousproblems.

FEMA’s Storage and Maintenance of Housing AssetsAuditorswillassesstheoverallcost-effectivenessofmaintainingFEMAhousingstoragefacilitiesaswellastheoverallcapability,controls,andproceduresinplacetoensurehousingassetsareproperlymaintainedtopreventdeterioration.AfterhurricanesKatrinaandRita,morethan$2.5billionwasspentontraveltrailersandmobilehomes.FEMA’splansforfuturedisastersincludemaintaininganinventoryofhousingassetsinstrategicareasofthecountryforexpeditedresponsetohousingneeds.

Accountability for Travel Trailers, Mobile Homes, and Modular HomesInresponsetohurricanevictims’housingneeds,disasterassistanceinvolvedpurchasingtraveltrailers,mobilehomes,andmodularhomes.AuditorswillreviewhowFEMAmanagestheseassetsandevaluateinternalcontrolstoensurethatthehousingpurchasedisproperlyaccountedforandmanaged.

FEMA’s Exit Strategy for Transitional Housing in the Gulf Coast RegionAuditorswillassessDHS/FEMA’sstrategyfordealingwiththecurrentstatusoftransitionalhousingsites;evaluatewhetherthereisadequatecoordinationamongfederalagencies,localauthorities,andvoluntaryorganizations;anddeterminewhetherFEMAhasformulatedacoherentexitstrategy.Currently,tensofthousandsofFEMA-purchasedmanufacturedhomesandtraveltrailersareoccupiedby100,000evacueefamiliesatscoresofsitesthroughoutLouisiana,Mississippi,andAlabama.FEMApaysforthesecurityofthesetransitionalhousingsites.

Fraud Vulnerability of FEMA’s Individuals and Households Program (IHP)AuditorswilldeterminevulnerabilitiesandcontrolweaknessesthatenablefraudinFEMA’sIHP,whichprovideseligibleapplicantswithcashgrantsfortemporaryhousing,homerepairorreplacement,andotherdisaster-relatedneeds.InresponsetohurricanesKatrinaandRita,morethan$6.7billioninassistancehasbeenawarded.Ofthis,GAOestimatedthatapproximately$1.0billioninvolvedpoten-tiallyfraudulentapplications.

FEMA’s Debris Removal ProgramTheauditwillassessFEMA’sdebrisordebrisremovalprogram,includingarecentretoolingeffort,anddeterminebestpractices.Therehavebeenlong-standingproblemsassociatedwithdebrisremovaland

29


monitoringoperations,exacerbatedbytheextentofhurricanedamage.

FEMA’s Public Assistance Mitigation ProgramAuditorswilldeterminehoweffectivelyFEMAismanagingpublicassistancemitigationgrantsacrossthehurricanezone.FEMAprovidespublicassistancegrantstostateandlocalgovernmentstorepairorrestoreinfrastructuredamagedbydisasters.

FEMA’s Hazard Mitigation Grant Program (HMGP)ThisauditwilldeterminehoweffectivelyFEMAandthestatesaremanagingtheHMGPafterhurri-canesKatrinaandRita.Theprogramprovidesgrantstohelpstatesandlocalgovernmentsimplementlong-termhazardmitigationmeasuresafteramajordisasterdeclaration.

FEMA’s National Flood Insurance Program (NFIP)AuditorswilldeterminewhetherthenFIP’sWriteYourOwn(WYO)programproperlyattributeddamagefromHurricaneKatrinatoeitherfloodingorwind.Underthatprogram,participatingcompa-niesofferfloodinsurancetoeligibleapplicantsandarrangeforadjustment,settlement,payment,anddefenseofallclaimsarisingfromprogrampolicies.EachWYOcompanyactsasafiscalagentofthefederalgovernment.

Data Mining to Determine Duplication of Benefits AuditorswilldeterminewhetherrecipientsofFEMADisasterHousinghomerepairgrantsalsoreceivedbenefitsfromthenFIP.Theywilldeterminewhetherduplicateassistanceoccurredamonghousingprograms,suchasrent,trailers,mobilehomes,andhotelsormotels.FEMA’sFederalInsur-anceAdministrationmanagesthefloodinsuranceprogram.Themaximumcoverageis$250,000perapplicant.

depArtment oF commerce AfterhurricanesKatrinaandRita,threeDepartmentofCommerce(DOC)bureausmadeatotalofsixfinancialassistanceawards,involvingabout$9.42millioninfederalfunding.Theseincluded:• TheEconomicDevelopmentAdministration(EDA)awardedfourgrantstotaling$8,840,000tothe

statesofLouisiana($4million),Mississippi($4million),andAlabama($450,000and$390,000)foreconomicrecoveryplanningandtechnicalassistanceafterHurricaneKatrina

• TheDOCawardeda$300,000cooperativeagreementamendmenttotheHoustonMinorityBusi-nessDevelopmentCenter(MBDC)forsupplementalfundingtoprovidebusinessdevelopmentservicestominority-ownedbusinessesaffectedbyHurricaneKatrinainthestateofLouisianaanddisplacedminorityfirmsfromLouisianathatrelocatedinTexas.Therewasnonon-federalmatching

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sharerequirementfortheamendment• ThenationalTelecommunicationsandInformationAdministration(nTIA)awardedagrantwith

afederalshareof$283,320totheLouisianaEducationalTelevisionAuthority,underthePublicTelecommunicationsFacilityProgram,foremergencyreplacementoftransmissionequipment.Thegrantrequiredanon-federalmatchingsharecontributionof$94,440,bringingthetotalestimatedprojectcostto$377,760.

AfterreviewingtheEDA,MBDC,andnTIAawarddocumentsandregulationsanddiscussingtheawardswithagencyofficials,auditorsdeterminedthattheDepartment’sactionstoawardthegrantswerereasonable.(DenverRegionalOfficeofAudits:DEn-17829)

depArtment oF deFenSeFinal Audits and ReviewsDepartment of Defense OIGFinancial Management of Hurricane Katrina Relief Efforts at Selected DoD Components (D-2006-118, September 27, 2006)Accordingtotheauditreport,DoDcomponentsperformedtheirFEMAmissionassignmentsforhurricanereliefinatimelymanner,andDoD’saccountingfortheobligationsandexpenditurescompliedwithapplicablelaws.However,auditorsalsodeterminedthefollowing:• TheUnderSecretaryofDefense(Comptroller)/ChiefFinancialOfficerissuedreimbursement

guidancethatconflictedwithexistingDoDdirectives• DoDcomponentscouldnotreadilyreconcileobligationstoindividualFEMAmissionassignments

orfundingdocuments• DoDmayhaveexcessreimbursablefundingauthorityrelatedtothehurricanereliefthatshouldbe

de-obligated• DoDdidnotbillFEMAinatimelymanner,andthedailyandmonthlycostreportspreparedby

DoDcomponentsdidnotprovideaccuratedatatoDoDdecisionmakers.

Inresponsetotheaudit,theUnderSecretaryofDefense(Comptroller)/ChiefFinancialOfficerestablishedaFinancialManagementAugmentationTeamconsistingofmembersfromeachDoDcomponentthatprovidedhurricanereliefsupport.TheteamistoassistU.S.northernCommandintestingandvalidatingfinancialmanagementprocessesandcontrolsdevelopedforreimbursableopera-tionsforDefenseSupportforCivilAuthorities.

Ice Delivery Contracts Between International American Products, Worldwide Services, and USACE (D-2006-116, September 26, 2006)AuditorsrespondedtoacongressionalrequesttodeterminewhethertwocontractsbetweenInterna-

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tionalAmericanProducts,WorldwideServices,andtheU.S.ArmyCorpsofEngineers(USACE)forprocurementanddeliveryoficewereproperlyawardedandadministered.Ingeneral,accordingtotheauditreport,USACEproperlyawardedandadministeredthecontractsandappropriatelyevaluatedallotherproposals.

Asecondreportisexpectedandwilladdressotherissuesidentifiedduringthereview.

Expanded Micro-Purchase Authority for Purchase Card Transactions Related to Hurricane Katrina (D-2006-111, September 27, 2006)Auditorsdeterminedthatpurchasecardtransactionsinsupportofhurricanereliefgenerallywerereasonable,appropriate,andconsistentwithDoDpoliciesandprocedures.FortheperiodSeptember1–30,2005,Army,AirForce,andDefenseagencycardholdersmade34,060purchasecardtransactionsinexcessof$2,500each.However,auditorsdeterminedthatprogrammanagersdidnotcaptureallrelevantcardtransactions,didnotidentifyhurricane-relatedtransactionsconsistently,didnotconducttimelyfollow-uptransactionreviewsasrequired,anddidnotissuerequireddelegationofauthorityletterstocardholderswithauthorizedincreasedsinglepurchaselimitsformakinghurricane-relatedpurchases.

AuditorsalsodeterminedthatArmy,AirForce,andDefenseagencycardholdersmadehurricane-relatedpurchasesinexcessoftheirpurchaseauthorityandthatArmyandAirForcecardholdersmadehurricane-relatedpurchaseswithoutadequatesupportingdocumentationandsufficientjustification.Asaresult,Army,AirForce,andDefenseagenciescannotdeterminethetotalnumberanddollarvalueofpurchasecardtransactionsassociatedwithHurricaneKatrina.Furthermore,unlesscontingencyrelatedpurchasecardguidanceisrevisedandcardmanagerssignificantlyimproveguidancepractices,Army,AirForce,andDefenseagencypurchasecardprogramofficialscannotmitigatetheriskoffraud,abuse,ormismanagementrelatedtofuturedisasterrescueandreliefoperations.

Response to Congressional Requests on the Water Delivery Contract Between the Lipsey Mountain Spring Water Company and the United States Army Corps of Engineers(D-2006-109, August 29, 2006)

Biloxi, MS, August 15, 2006—Restau-rants along the Mississippi Gulf Coast are reopening following repairs to damage caused by Hurricane Katrina. (Mark Wolfe/FEMA photo)

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InresponsetoarequestfromRep.ChristopherShays,auditorsreviewedtheUSACEcontractwithLipseyMountainSpringWaterCompany.Theauditorsdeterminedthattheprocurementofemer-gencywaterwasproperlyawarded;however,thecompanydidnotconsistentlymeettimeperformancerequirements.Auditorsdeterminedthatthecompanymaybeincapableofsupplyingwaterinanemer-gencyoutsidethecontinentalUnitedStates.

InresponsetoarequestfromRep.BennieThompsontodeterminewhetherLipseyMountainSpringWaterCompanyowedTRC,Inc.,asubcontractor,severalmilliondollars,anauditordeterminedthattherewasnolongersuchanobligation.Afollow-upreportwilladdressotherissuesregardingwaterdeliverycontractadministration.

Army Audit AgencyAudit of Contracts for the Hurricane Protection System—New Orleans(Report Number A-2006-0198-FFD, August 22, 2006)Auditorsevaluated58contracts,valuedatapproximately$433million,whichUSACEawardedforemergencyrepairstoleveesandfloodwallsinthenewOrleansarea.AuditorsdeterminedthatUSACEdidacommendablejobawardingcontractsandexecutingprojectstomeettimelinesunderarduouscircumstances.USACEopenlycompetedabout92%ofcontractawarddollarsandobtainedadequatecompetitiondespiteshortsolicitationperiods.Thegovernmentpaidreasonablepricesforthework—averagingabout4%higherthantheindependentgovernmentestimate.

However,auditorsrecommendedthatcontractsolicitationsbeadvertisedinnationaltradeandmediaoutletstoensureadequatecompetitiononfuturecontractsastheavailabilityofcontractorsbecomesscarceduetotheincreasingworkload.AuditorsalsorecommendedthatUSACEdevelopariskmitigationstrategywithinitsacquisitionstrategy.

Naval Audit ServiceDepartment of the Navy’s Government Purchase Cards Used for Hurricane Relief Efforts(N2006-0042, August 25, 2006)Accordingtotheauditreport,mostpurchasecardtransactionswerenotreportedasrequiredbecausetherewasnocodeormethodintheautomateddatabasetoidentifypurchasesmadeunderspecialcircumstancessuchashurricanerelief.Auditorsdeterminedthatthecommercialpurchasecardsweregenerallyusedaccordingtoestablishedguidancebutthatgoodsandserviceswerenotalwaysproperlyaccountedfor.TheseweaknesseswereattributedtothenavyDepartment’squickresponsetothereliefeffort.

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Cash Accountability of Department of the Navy Disbursing Officers for Hurricane Relief Funds (N2006-0047, September 22, 2006) AuditorsdeterminedthatdisbursingofficersprovidedadequatecheckcashingandadvancepaytomilitaryandcivilianpersonnelaffectedbyHurricaneKatrinaandappropriatepaymentstovendorsforhurricanerelief-relatedservices.However,accordingtotheauditreport,opportunitiesexisttoimproveinternalcontrolsovercashaccountability,inbothdisbursingandreporting.

Ongoing Audits and Reviews DoD OIGAudit of Disaster Recovery Related to Hurricane Katrina on Army Information Technology Resources (Project Number D2006-D000AS-0135.000, February 13, 2006)Theauditisexaminingwhetheradequatedisasterrecoverycontrolsandplanswereinplacetosafe-guardArmyinformationtechnologyresources.AdraftauditreportwasissuedJuly20,2006.

Audit of the Use of DoD Resources Supporting the Hurricane Katrina Disaster (Project No. D2006-D000LA-0009.000, September 19, 2005)AuditorsarereviewingtheuseofDoDresourcesinhurricanereliefefforts.AdraftauditreportwasissuedAugust7,2006.

Audit of the Effects of Hurricane Katrina on DoD Information Technology Resources in Affected Areas (Project No. D2005-D000AS-0310.000, September 15, 2005)ThisauditisreviewingtheeffectsofHurricaneKatrinaonDoDinformationtechnologyresources.

Audit of the Army Corps of Engineers’ “Operation Blue Roof” Project in Response to Hurricane Katrina (Project No. D2006-D000CG-0081.000, November 9, 2005)Respondingtoacongressionalrequest,auditorsarereviewingtheadministrationandawardof“Opera-tionBlueRoof”contractsforhurricanerelief.Fieldworkiscomplete.Asecondreportisexpectedtoaddressotherissuesnotcoveredbythecongressionalrequest.

Audit of Costs Incurred Under the CONCAP Contract Task Orders for Hurricane Relief Efforts (Project No. D2006-D000CH-0110.000, January 9, 2006)Auditorsarereviewingthereasonablenessofcostsincurredontaskordersforreliefeffortsafterhurri-canesIvanandKatrina.Theywillexaminethenavy’smethodsandprocedurestoensureitpaidfairandreasonablepricesforlaborandmaterial.

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Army Audit AgencyAudit of Army Fund Accountability for Hurricane Relief Efforts (Project No. A-2006-FFD-0216.000, October 7, 2005)ThisauditexamineswhethertheArmyestablishedandimplementedappropriateproceduresandprocessestoaccountforfundsreceivedandcostsincurredandtoobtainreimbursementsforallowableexpenses.

Audit of Debris Removal Contracts (Project No. A-2006-FFD-232.000, October 12, 2005)AuditorsaredeterminingwhetherUSACEestablishedanappropriateacquisitionstrategyandprovidedadequateoversightofdebrisremovalcontracts.

Audit of Quality Assurance Service Contracts for Hurricane Operations (Project No. A-2006-FFD-0354.000, December 12, 2005)ThisauditevaluatesUSACEcontractrequirementsforqualityassurancepersonnelandassessestheadequacyoftheacquisitionstrategyandgovernmentoversightofqualityassuranceservicecontracts.Audit of Contract Data Reporting (Project No. A-2006-FFD-0250.000, December 12, 2005)AuditorsareexaminingtheUSACEprocessforaccuratelyreportingcontractinformationrelatedtohurricanesKatrina,Rita,andWilma.

New Orleans, LA—Work progresses on repairs to the 9th Ward Levee that was damaged by Hurricane Katrina. FEMA provided Public Assistance funds to repair New Orleans Levees to Category 4 status. (Marvin Nauman/FEMA photo)

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Audit of Demolition Contracts (Project No. A-2006-FFD-0484.000, May 3, 2006)AuditorsareassessingwhetherUSACEappropriatelyawardedandmonitoredcontractsfordemolitionofstructuresinthenewOrleansarea.

Audit of Contracts to Restore and Enhance Flood Protection System (Project No. A-2006-FFD-0483.000, May 22, 2006)ThisauditevaluatestheUSACEacquisitionstrategyandmonitoringofcontractstorestoreandenhancethefloodprotectionsystemfornewOrleans.

Naval Audit ServiceAudit of Hurricane Katrina Relief Funds (Project No. N2006-NFA000-0009.000, September 30, 2005)Auditorsarereviewingthedesignandimplementationofinternalcontrolsinthefollowingareas:allocation,use,andtrackingofHurricaneKatrinarelieffunds;accountingandreportingofcostsandbenefits;useofgovernmentpurchasecards;contractrequirementsgeneration,award,administra-tion,deliverables,andpayment;disbursingofficercashaccountability;managementofreimbursablearrangements;controlsandaccountabilityovermedicalequipment;adequacyofsupporttonavypersonnelandfamilies;andothermattersthatemergeasworkprogresses.

Audit of Department of the Navy’s Use of Hurricane Katrina Relief Funds (Project No. N2006-NFA000-0009.003, September 30, 2005)Auditorsareexaminingwhetherrelieffundswereusedaccordingtolawsandregulationsandwereproperlyaccountedforandreported.

Audit of Controls and Accountability Over Medical Supplies and Equipment—Hurricane Relief Efforts (Project No. N2006-NFA000-0009.005, October 17, 2005)Thisauditexamineswhethermanagementcontrolsovermedicalsuppliesandequipmentusedinhurri-canereliefeffortswereeffective.Auditorsareexaminingwhethermanagementcontrolsoverservicecontractswereadequatetoensurethefollowing:• Contractserviceswereproperlyjustified,wereofvaluetothenavy,andmetgovernmentrequire-

mentsconcerningauthorizeduseofservicecontracts• Contractdeliverableswereclearlydefinedandproperlymeasuredforresults,quality,andtimeliness• Contractdeliverablesmetcontractrequirementsforresults,quality,andtimeliness• Theappropriatecontracttypewasusedtoprovideservicesatthelowestcostandleastrisktothe

government.

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Air Force Audit AgencyAudit Planning, Hurricane Katrina Relief Efforts (Project No. F2006-FB1000-0124.000, October 5, 2005)Auditorsareformulatingauditobjectivesrelatedtofinancialmanagement,aviationfuelreimburse-ments,andreconstructionplanningefforts.

Hurricane Katrina Federal Emergency Management Agency (FEMA) Reimbursements(Project No. F2006-FB1000-0173.000, November 1, 2005)AuditorsareexaminingwhetherAirForcepersonneleffectivelymanagedFEMAreimbursements.Adraftauditreportalreadyhasbeenissued.

Hurricane Katrina Supplemental Funds Management (Project No. F2006-FD1000-0210.000, November 21, 2005)AuditorswilldeterminewhetherAirForcepersonneleffectivelymanagedHurricaneKatrina-relatedsupplementalfunds.

plAnned AuditS And reviewSDoD Office of Inspector GeneralTemporary RoofsAuditorswillreviewsubcontractandcontractpricingfortemporaryroofs.Specifically,auditorswillassesscontractors’costsusedtoestablishpricing,thepercentageofcontractcostforoverhead,andthenumberofsubcontractorsused.

Mission Assignments AuditorsalsoplantoreviewtheoverallDoDmissionassignmentprocess.

New Orleans, LA, March 11, 2006—FEMA debris inspector Drew Dunne, USACE inspector Tom Conway, and ECC inspec-tors Hillsay Careaer and Rata Murr give this house in the 9th Ward the final verification inspection for demolition for homes in the public right-of-way. All 9th Ward homes sitting in the public right-of-way must be demolished and receive several verification inspections including this final pre-demoli-tion checklist inspection. (FEMA photo)

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Air Force Audit Agency (AFAA)Keesler Air Force BaseAFAAplanstoconductaseriesofauditsrelatedtothereconstitutionofKeeslerAirForceBaseinMississippi.

depArtment oF energyFinal Audit and Review ProductsFollow-up Review of The Department of Energy’s Response to Hurricanes Katrina and Rita (Report IG-0733, July 2006)Auditorsdeterminedthat,fromnovember2005toMay2006,theDepartmentofEnergy(DOE)madesignificantprogresstowardimplementingearlierOIGrecommendationstoenhanceEmergencySupportFunction-12(ESF-12)missioncapabilities.Specifically,theDepartmentclarifiedcommunica-tionsprocessesduringESF-12deployments,addressedresponderequipmentneeds,andaugmentedstaffinglevelstomeetESF-12missionrequirements.

However,auditorsconcludedthereareadditionalopportunitiestoimproveDOEeffortstodeter-mineemergencyresponseassetsaheadofnaturaldisasters,forexample:• Expandingtheinventorynarrativetoincludesufficientdetailaboutquantitiesandcapabilitiesof

availableequipment,andhelpingcrisisrespondersdeterminewhetheravailableequipmentmeetstheirneeds

• EnsuringthattheassetbasesofallDOEentities,includingthenationalnuclearSecurityAdminis-tration,theBonnevillePowerAdministration,andtheStrategicPetroleumReserve,areincludedinDOE’sinventory.

Ongoing Audits and ReviewsThe Department of Energy’s Use of the Strategic Petroleum Reserve in Response to Hurricanes Katrina and RitaThisauditwillreview(orevaluate)whethertheStrategicPetroleumReservemetitsenergysecuritymissionduringtheresponsetohurricanesKatrinaandRita.

Planned Audits and ReviewsAuditorswillevaluateactionstakentoaddresslessonslearnedregardingtheuseoftheStrategicPetro-leumReserveintheresponsetohurricanesKatrinaandRita.

depArtment oF the interiorFinal Audit and Review ProductsTheOIGdidnotissueanyfinalauditproductsforthe180-dayperiodendingSeptember30,2006.

Ongoing Audits and ReviewsTheOIGhasoneongoingaudit,whichfocusesonevaluatingwhethertheDepartmentismakingthebestuseoffundsandexaminingtheappropriatenessofcurrentandfuturecontracts.

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Planned Audits and ReviewsUnderthefourthEmergencySupplementalAppropriationsAct(P.L.109-234),DOIreceived$213million,primarilyforreconstructionefforts.Auditorswillevaluaterelatedpost-hurricaneconstructionprojectstodeterminewhethertheyarereasonableandnecessary.Thiswillincludeareviewofconces-sionreconstructiontoensurethatDOIinterestsareproperlytrackedandaccountedfor.

AuditorsalsowillreviewwhetherDOIanditsindividualbureausareensuringthatexpendituresforhurricanereliefeffortsarereasonable,necessary,andproperlyrecorded.Specifically,auditorswillfocusonwhether:• Bureaushadinternalcontrolsforemergencyprocurement• Expendituresweredirectlyrelatedtohurricanereliefeffortsandwereallowablewithinapplicable

guidelines• Bureausaccuratelyaccountedforhurricaneexpenditures• BureaushaveadequatedocumentationtosupportreimbursablecoststoFEMA.

depArtment oF JuSticeFinal Audit and Review ProductsOversight of Department of Justice Expenditures Related to Hurricane Rita— Beaumont Federal Correctional Complex Roof Repair (06-34, June 23, 2006)AuditorsstudiedtheFederalBureauofPrisons’awardofa$5.2millionsole-sourcecontractforroofrepairsattheBeaumont,Texas,FederalCorrectionalComplex.Accordingtotheauditreport,useofasole-sourcecontractwasacceptableduetothecontractor’sstatusunderSection8(a)oftheSmallBusinessActandaccordingtoapartnershipagreementbetweentheDepartmentofJustice(DOJ)andtheSmallBusinessAdministration.Auditorsalsodeterminedthat$5.2millionwasafairandreason-ablepricefortherepairsandthatthecontractwasawardedonan“arm’s-length”basis.norecommen-dationsweremade.

Department of Justice Hurricane-Related Purchase Card Transactions (06-36, September 7, 2006)AuditorsexaminedpurchasecardpurchasesateightDOJcomponentsfromAugust2005throughDecember2005.Thesetransactionswere$3.8millionofthe$5.2millionthattheDOJcomponentsreportedashurricane-relatedpurchasecardexpendituresduringtheperiod.Theydeterminedthatnearlyallhurricane-relatedpurchasecardtransactionsreviewedwereauthorizedandvalid,andthegoodsorserviceswerereceived.

However,auditorsidentifiedinternalcontrolissuesthatshouldbecorrectedtoensurethatfuturegovernmentfundsarenotatrisk.Specifically,theratioofcardholderstoapprovingofficialswastoohighattheFederalBureauofInvestigationandtheBureauofAlcohol,Tobacco,Firearms,andExplosives.Theyalsodeterminedthatapprovingofficialsandcardholdersneedrefreshertraininginpurchasecarduse.

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Ongoing Audits and ReviewsTheOIGAuditDivisiondidnothaveanyongoingauditsrelatedtotheGulfCoasthurricanesasofSeptember30,2006.

Planned Audits and ReviewsTheOIGdoesnotanticipatestartinganyhurricane-relatedauditsorreviews.

depArtment oF lABorFinal Audit and Review ProductsIndividuals Received Unemployment Benefits in Louisiana While Receiving PSE Wages in Texas (06-06-006-03-315, September 29, 2006)AuditorsreviewedindividualsreceivingunemploymentbenefitsinLouisianaforthesameweekstheyreceivedwageswhileenrolledintheTexasnationalEmergencyGrantPublicServiceEmployment(nEGPSE)program.Accordingtotheauditreport,Louisianaoverpaid177individuals$126,663inUnemploymentCompensation(UC)orDisasterUnemploymentAssistance(DUA)benefitsforthesameweeksthatTexasreportedtheywereenrolledinPSE.Louisiana’sManagementInformationSystem(MIS)didnotaccuratelyreflectthestatusofPSEparticipants.

AuditorsrecommendedthatofficialsestablishandcollectbenefitoverpaymentsandupdatetheMIStoaccuratelyreflectPSEstatus.TheDepartmentofLabor(DOL)agreedtoimplementtherecommendations.

Individuals Received Unemployment Benefits in Louisiana While Receiving PSE Wages in Louisiana (06-06-007-03-315, September 29, 2006)AuditorsdeterminedwhetherindividualsreceivedunemploymentbenefitsinLouisianaforthesameweekstheyreceivedwageswhileenrolledinLouisiana’snEGPSEprogram.Accordingtotheauditreport,Louisianaoverpaid$105,170inUCandDUAbenefitsto105claimantsforthesameweeksasthestatereportedtheywereenrolledinPSE.Also,Louisiana’sMISdidnotaccuratelyreflectPSEparticipants’status.

AuditorsrecommendedthatofficialsestablishandcollectbenefitoverpaymentsandupdatetheMIStoaccuratelyreflectPSEstatus.DOLagreedtoimplementtherecommendations.

Individuals Received DUA in Louisiana While Receiving UC in Mississippi (06-06-009-03-315, September 13, 2006)AuditorsdeterminedwhetherindividualsreceivedDUAinLouisianawhilereceivingUCinMississippi.Accordingtotheauditreport,Louisianapaid$54,782inDUAbenefitsto45individualswhoalsoreceivedUCfromMississippi.

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Auditorsrecommendedthatofficialsestablishandcollectbenefitoverpayments.DOLagreedtoimplementtherecommendations.

Individuals Received DUA in Both Louisiana and Mississippi (06-06-010-03-315, September 29, 2006)TheauditexaminedwhetherindividualsreceivedDUAinbothLouisianaandMississippi.Accordingtotheauditreport,LouisianaandMississippibothpaidDUAtothesame43claimants,resultingin$74,382inoverpayments.


Texas and Mississippi Overpaid Unemployment Benefits to Some Texas PSE Participants(06-06-011-03-315, September 29, 2006)AuditorsdeterminedthatTexaspaid$17,384inDUAorUCbenefitsto17individualsandMissis-sippipaid$4,498inUCbenefitstothreeindividualsforthesameweeksasTexasreportedtheywereenrolledinPSE.


Questionable Eligibility of College Students in Mississippi’s NEG Training Program (Report Number 04-06-008-03-390, September 28, 2006)Accordingtotheauditreport,basedonstudents’self-certificationofeligibility,someMississippijobcentersapprovedWorkforceInvestmentAct(WIA)IndividualTrainingAccountsforstudentswhowerealreadyenrolledincollege.

AuditorsrecommendedthatDOLworkwithMississippitoensurethatnEGparticipantsmeettheeligibilityrequirements.DOLagreedtoimplementthatrecommendation.

Ongoing Audits and ReviewsDUA Social Security Number (SSN) Verification Data Analysis (Project No. 06-A06-001-03-001)AuditorsareexaminingtheimpactonfederalfundsoftheillegaluseofSSnsforfilingDUAclaims(i.e.,individualsusingtheSSnsofdeceasedindividualsorusingSSnsthattheSocialSecurityAdmin-istrationhasneverissued).

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DUA Claimant Eligibility in Louisiana and Mississippi (Project No. 06-A06-001-03-001)ThisauditexamineswhetherDUAclaimantswereentitledtothepaymentstheyreceivedandwhetherthestateseffectivelyimplementedDUApaymentcontrolsandeligibilityreviewproceduresinaddressingmodifiedDUAeligibilityrules.

Individuals Received Unemployment Benefits in Mississippi and Texas While Receiving PSE Wages in Louisiana (Project No. 06-A06-001-03-001)AuditorsareexaminingwhetherindividualsreceivedunemploymentbenefitsinMississippiandTexasforthesameweekstheyreceivedwagesunderLouisiana’snEGPSEprogram.

Louisiana DUA Debit Card Assessment (Project No. 06-A06-001-03-001)ThisauditexaminestheimpactonfederalfundsofLouisiana’sautomaticpaysystemfordebitcardsthatwereneveractivatedorwerenotdeliveredtotheclaimant.

Analysis of Louisiana’s NDNH Database Match Outcomes (Project No. 06-A06-001-03-001)AuditorsaredeterminingtheimpactonstateandfederalfundsofindividualscontinuingtocollectunemploymentbenefitsinLouisianaafteracceptingemploymentinanotherstate.

Review of NEG and High Growth Initiative Grants—Texas (Project No. 04-A06-008-03-390)TheauditwillreviewwhethernEG-fundedprogramsareeffectiveandwhetherthepotentialforfraud,waste,andabusemaybereduced.

Review of NEG and High Growth Initiative Grants—Mississippi (Project No. 04-A06-001-03-390)AuditorsseektoensurethatnEG-fundedprogramsareeffectiveandtoreducethepotentialforfraud,waste,andabuse.

Review of NEG and High Growth Initiative Grants—Louisiana (Project No. 04-A06-009-03-390)TheauditseekstoensurethatnEG-fundedprogramsareeffectiveandtoreducethepotentialforfraud,waste,andabuse.

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Planned Audits and ReviewsAnauditisplannedtoreviewthemonetaryimpactonfederalfundsasaresultofclaimantsinLoui-sianawhowereinitiallyeligibleforUIbutwerepaidDUAinstead.

depArtment oF trAnSportAtionFinal Audit and Review ProductsInternal Controls Over Payments for Emergency Disaster Relief Transportation Services(AV-2006-051, June 30, 2006)Accordingtotheauditreport,betterinternalcontrolsareneededtoensurethatthegovernmentreceivesthetransportationservicesitpaysfor.Auditorsdeterminedthatcontractingofficersreliedondocumentationprovidedbythecontractortoverifythatserviceswereprovided.FederalAviationAdministration(FAA)managementagreedwiththereportandisintheprocessofaddressingthisissuethroughanonlinecontractadministrationsystem.

Audit of the Mississippi Department of Transportation’s (MDOT) Award of Selected Hurricane Katrina Emergency Repair Contracts (MH-2006-065, September 6, 2006) AuditorsdeterminedthatthelackofstandardconstructioncontractprovisionscausedMDOTtoawardsomecontractswithouttheassuranceoffairandreasonableprices,andthattheFederalHighwayAdministration(FHWA)shouldstrengthenitsEmergencyReliefManualandrelatedfederalregula-tionstobetterassiststatesinawardingemergencyhighwayrepaircontracts.FHWAconcurredwiththereportandagreedtotakecorrectiveaction.

Ongoing Audits and Reviews Oversight of Airport Improvement Program (AIP) Hurricane GrantsAuditorsarereviewingFAA’soversightofthefundsprovidedtoairportstocompleterepairsofdamagecausedbyhurricanesKatrinaandRita.Design and Price Analysis of the Emergency Transportation Services Contract AuditorsareexaminingwhetherFAA’smodificationoftheDepartment’semergencytransportationservicescontractwillhelpensurefairandreasonablecoststothegovernment.

Opportunities to Free Up Unneeded Funds in States Affected by Hurricanes Katrina and Rita and Use Those Funds on Recovery EffortsAuditorsaredeterminingwhetherAlabama,Florida,Louisiana,Mississippi,andTexashaveDOTfundsdedicatedtocongressionallydirectedhighwayprojectsthatarenolongerneeded,and,ifso,whetherthefundscanbedirectedtohurricane-relatedreconstruction.

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Planned Audits and ReviewsPotentialfutureauditissueareasincludeensuringthatFHWAemergencyfundsarespentaccordingtoprogramguidelinesandfocusoncontractoversightforsignificanttransportationinfrastructureconstructionprojects.

depArtment oF veterAnS AFFAirSOngoing Audits and ReviewsVA Response and Recovery to Gulf Coast Hurricanes (Assignment No. VA OIG; Project No. 2006-00595-R9-0057) AuditorsarereviewingwhethertheVeteransHealthAdministrationhadcontrolsinplacethatwereoperatingeffectivelytoaccountforhurricane-relatedcosts.

depArtment oF educAtionFinal Audit and Review ProductsHurricane Relief Funds Provided to Mississippi Institutions of Higher Learning (Control No. A04G0014)AuditorsreviewedtheMississippiInstitutionsofHigherLearning’s(IHL’s)administrationofits$95millionappropriationinhurricanerelieffundingtoassessthefollowing:• IHL’smethodologyforallocatinghurricanerelieffundstoschools• TheadequacyoftheinformationprovidedbyschoolstoIHL• IHL’scontrolsinaccountingforthehurricanerelieffundsandcomplyingwithlawsandregulations.

AuditorsdeterminedthatIHLhasimplementedmethodologiestoallocatehurricanerelieffundstoitsinstitutionsandtomakehurricanereliefassistanceawardstoeligiblestudentsthroughtheSpecialLeveragingEducationalAssistancePartnershipProgram.Forthe$50.5millioninhurricanerelieffundsspentthroughthisprogramasofJuly20,2006,IHLimplementedanadequateinternalcontrolsystem.

AseparateauditwillassessIHL’sfulldistributionofitshurricanerelieffunding.

ongoing Audits and reviewsDepartment Controls Over Hurricane Education Recovery Act Funding(Audit No. A19G0003)AuditorsareassessingtheadequacyofDepartmentcontrolsoverHurricaneEducationRecoveryAct(HERA)fundingfortheRestart,EmergencyImpactAid,andHomelessYouthprograms.Specifically,auditorsareevaluatingcontrolsovertheawardingoffundstogranteesand,onceauthorized,controlstoensurethatfundsareexpendedaccordingtogranttermsandapplicablelaws,regulations,policies,andprocedures.

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Texas State Education Agency (SEA) and Local Education Agency (LEA) Controls Over HERA Funding (Audit No. A06G0009)TheauditfocusesontheadequacyofTexasSEAandLEAcontrolsoverHERAfundingfortheEmer-gencyImpactAidandHomelessYouthprograms.Forthetwoprograms,auditorsaredeterminingwhethertheSEAandLEAhaveinternalcontrolsinplacetoensureaccuratedisplacedstudentcountdata;haveadequatecontrolsandcriteriatomakeaccurateallocationsoffunds;andhavemadeexpen-dituresaccordingtothetermsofthegrantandapplicablelawsandregulations.

Louisiana SEA and LEA Controls Over HERA Funding (Audit No. A06G0010)TheauditfocusesontheadequacyofLouisianaSEAandLEAcontrolsoverHERAfundingfortheEmergencyImpactAidandHomelessYouthprograms.Forthetwoprograms,auditorsaredeterminingwhethertheSEAandLEAhaveinternalcontrolsinplacetoensureaccuratedisplacedstudentcountdata;haveadequatecontrolsandcriteriatomakeaccurateallocationsoffunds;andhavemadeexpen-dituresaccordingtothetermsofthegrantandapplicablelawsandregulations.

Mississippi SEA and LEA Controls Over HERA Funding (Audit No. A04G0012)TheauditassessestheadequacyofMississippiSEAandLEAcontrolsoverHERAfundingfortheEmergencyImpactAidandHomelessYouthprograms.Forthetwoprograms,auditorsaredeterminingwhethertheSEAandLEAhaveinternalcontrolsinplacetoensureaccuratedisplacedstudentcountdata;haveadequatecontrolsandcriteriatomakeaccurateallocationsoffunds;andhavemadeexpen-dituresaccordingtothetermsofthegrantandapplicablelawsandregulations.

Alabama SEA and LEA Controls Over HERA Funding (Audit No. A05G0020)AuditorswillassesstheadequacyofAlabamaSEAandLEAcontrolsoverHERAfundingfortheEmergencyImpactAidandHomelessYouthprograms.Forthetwoprograms,auditorsaredeterminingwhethertheSEAandLEAhaveinternalcontrolsinplacetoensureaccuratedisplacedstudentcountdataandhaveadequatecontrolsandcriteriatomakeaccurateallocationsoffunds.

Georgia SEA and LEA Controls Over HERA Funding (Audit No. A04G0015)TheauditassessestheadequacyofGeorgiaSEAandLEAcontrolsoverHERAfundingfortheEmer-gencyImpactAidandHomelessYouthprograms.Forthetwoprograms,auditorsaredeterminingwhethertheSEAandLEAhave:

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• Internalcontrolsinplacetoensureaccuratedisplacedstudentcountdata• Adequatecontrolsandcriteriatomakeaccurateallocationsoffunds.

Controls Over Hurricane Assistance Provided to the Louisiana Board of Regents (Audit No. A06G0011)AuditorsareexamininghowtheLouisianaBoardofRegentsallocatedandused$95millionprovidedforpostsecondaryinstitutionsofhighereducation.Fundsaretobeusedforstudentfinancialassis-tance,facultyandstaffsalaries,equipment,andinstruments.

Planned Audits and ReviewsRestart ProgramAuditorswillexaminehowfundsareexpendedundertheRestartPrograminLouisianaandMissis-sippi,whichtogetherreceivedalmost90%ofRestartProgramfunding.

Mississippi Institutions of Higher Learning AuditorswillcompletetheirevaluationoftheMississippiIHL’sadministrationofitscompleteamountof$95millionhurricanereliefappropriation.

HERAAuditorswillevaluatewaiverstoprogramregulationsgrantedbytheDepartmentunderHERA.TheDepartmenthasauthoritytowaiveormodifystatutoryorregulatoryprovisionsapplicabletofederalstudentaidprogramsforstudentandinstitutionaleligibilityprovisionsoftheHigherEducationAct(HEA),extendandwaiveHEAreportingdeadlines,andmodifyrequiredandallowableactivitiesincertaincompetitivegrantprograms.

environmentAl protection AgencyFinal Audit and Review ProductsEPA Provided Quality and Timely Information on Hurricane Katrina Hazardous Material Releases and Debris Management (2006-P-00023, May 2, 2006)AuditorsdeterminedthattheEnvironmentalProtectionAgency(EPA)establishedtimelyapproachesforrapidlydetermining,prioritizing,andassessingtheimpactofhazardousmaterialreleasesfollowingHurricaneKatrinaandforhandlinghurricane-generatedhazardousdebrisandwaste.

HurricaneKatrinacreatedanestimated86millioncubicyardsofdebris,causedmorethan7milliongallonsofoiltospill,andproducedfloodwatersthatdepositedhazardoussubstancesinsediments.Thestormaffected18SuperfundnationalPriorityListsitesandmorethan400industrialfacilitiesthatstoreormanagehazardousmaterials.

Theauditorsmadenorecommendations.

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Lessons Learned: EPA’s Response to Hurricane Katrina (2006-P-00033, September 14, 2006)AuditorsdeterminedthatEPAandstateresponsestoHurricaneKatrinagenerallyimprovedonlessonslearnedfromthe2001WorldTradeCentercollapse.ThreeearlierOIGreportsaddressedissueswiththerestorationofdrinkingwaterandwastewatertreatmentfacilitiesanddebrisandhazardouswasteremovalinthehurricanezone.Theearlierreportsincludedrecommendationsforimprovinginter-agencycoordination,bettertraining,andenhancedlogistics.

Existing Contracts Enabled EPA to Quickly Respond to Hurricane Katrina; Future Improvement Opportunities Exist (2006-P-00038, September 27, 2006)Accordingtotheauditreport,EPA’sexistingcontractsforrespondingtonaturaldisastersworkedasintendedandallowedEPAtoquicklyrespondtoHurricaneKatrina.nonetheless,auditorsidentifiedopportunitiesforadditionalimprovements,includingconductingabetterreviewofcontractorinvoicestopreventpaymentofduplicate,unallowable,orunreasonablecosts.

AuditorsreportedthatEPAmovedduringtheaudittohavecontractorsrepayunjustifiedamounts.Auditorsmadeseveralrecommendationsforimprovingfutureperformance.

Ongoing Audits and ReviewsEPA’s Katrina Expenditure Oversight (Assignment No. 2005-001709)AuditorsarereviewingEPA’sre-competedhousingcontract,whichwasusedtoobtaintrailerstohouseEPAemployeesintheHurricaneKatrinaresponsearea.Auditorsaredeterminingwhetherthecontract’sstatementofworkundulylimitedcompetition.

FederAl communicAtionS commiSSionPlanned Audits and ReviewsLow-Income Program Support for Hurricane Katrina Victims Auditorswilldetermineareasofrisk,potentialvulnerabilities,andcompliancewithprogramrequire-mentsandregulationsrelatedtotheFederalCommunicationsCommission’sefforttoprovideeligiblelow-incomeevacueesandotherswhohavenotelephoneserviceinthehurricane-affectedareawithwirelesshandsetsandapackageof300freeair-timeminutes.

generAl ServiceS AdminiStrAtionOngoing Audits and ReviewsAssessment of GSA’s Response to Hurricane KatrinaUnderthe2004nationalResponsePlan,thefederalgovernment’sunifiedapproachtorespondingtonaturalorman-madedisasters,GSAservesacentralroleinprocuringequipmentandservicesfor

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FEMA.GSAhasawardedapproximately$1billionincontractsonFEMA’sbehalf.Todate,GSAaudi-torshaveexamined255ofGSA’sprocurementcontractsforFEMA,totalingmorethan$695million.AuditorsalsohavebeenreviewingchargesagainstMAsaswellastherelatedmanagementcontrolsandprocessesinternaltoGSA.

Auditorshavesharedsomeobservationswithmanagement,viamemoranda,specifyingthattheagencyneedstohavemoreconsistentandupdatedpoliciesandguidanceinareassuchasMAs,procurementtracking,reimbursementforservicesperformedonbehalfofFEMA,FEMA’sobligationprocessforfundingawards,andcontractorresponsibilitydetermination.

Additionally,auditorswillexamineGSA’sresponsibilityaslandlordtofederalagenciesintheaffectedarea.Initially,84facilitiesinfourstateswereaffected.

depArtment oF heAlth And humAn ServiceSFinal Audit and Review ProductsAudit of Selected Procurements Under Contract 200-2005-11531 with Sanofi Pasteur, Inc.(A-04-06-01024, June 15, 2006)Accordingtotheauditreport,theCentersforDiseaseControlandPrevention(CDC)compliedwithapplicablepartsoftheFederalAcquisitionRegulation(FAR)whileissuingdeliveryorderstoSanofiPasteur,Inc.,foremergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospi-talsandtheMississippiDepartmentofHealth.Further,CDC’sclaimsforreimbursementfromFEMA,totaling$950,700,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.

Therewerenofollow-uprecommendations.

Audit of Selected Procurements Under Contract 200-2005-11533 with Merck Vaccine Division (A-04-06-01025, June 12, 2006)AuditorsdeterminedthatCDCcompliedwithapplicablepartsoftheFARwhileissuingdeliveryorderstoMerckVaccineDivisionforemergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospitalsandtheMississippiDepartmentofHealth.Further,CDC’sclaimsforreimburse-mentfromFEMA,totaling$2,270,300,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.


Audit of Selected Procurements Under Contract 200-2005-12567 with Merck Vaccine Division (A-04-06-01026, June 15, 2006)Accordingtotheauditreport,CDCcompliedwithapplicablepartsoftheFARwhileissuingdeliveryorderstoMerckVaccineDivisionforemergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospitalsandtheMississippiDepartmentofHealth.Further,CDC’sclaimsforreimburse-mentfromFEMA,totaling$1,805,645,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.


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Audit of Selected Procurements Under Contract 200-2005-12645 with GlaxoSmithKline (A-04-06-01027, June 15, 2006)Accordingtotheauditreport,CDCcompliedwithapplicablepartsoftheFARwhileissuingadeliveryordertoGlaxoSmithKline(GSK)foremergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospitals.Further,CDC’sclaimsforreimbursementfromFEMA,totaling$925,000,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.


Audit of Selected Procurements Under Contract 200-2005-11532 with GlaxoSmithKline (A-04-06-01028, June 15, 2006)Accordingtotheauditreport,CDCcompliedwithapplicablepartsoftheFARwhileissuingdeliveryorderstoMerckVaccineDivisionforemergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospitalsandtheMississippiDepartmentofHealth.Further,CDC’sclaimsforreimburse-mentfromFEMA,totaling$916,700,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.


Cameron, LA—The local environment was damaged when storage tanks like these in Cameron, LA, broke and leaked and mixed with other unknown chemicals from Hurricane Rita. The EPA, funded by FEMA, undertook a massive operation to identify and clean up any hazards. (Marvin Nauman/FEMA photo)

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Audit of Selected Procurements Under Contract #200-2005-11534 with Wyeth(A-04-06-01029, June 15, 2006)Accordingtotheauditreport,CDCcompliedwithapplicablepartsoftheFARwhileissuingadeliveryordertoWyethforemergencyshipmentsofvaccinestotheLouisianaDepartmentofHealthandHospitals.Further,CDC’sclaimsforreimbursementfromFEMA,totaling$541,200,accuratelyreflectedthecostsactuallyincurred,asevidencedbyvendorinvoices.


Audit of Program Support Center’s (PSC) Procurement Process for Contract #HHSP233200500328A with Cardinal Health 200, Inc. (A-03-06-00503, June 21, 2006)AuditorsdeterminedthattheProgramSupportCenter(PSC)compliedwithapplicablesectionsoftheFARandHealthandHumanServicesAcquisitionRegulationwhileexecutingthisprocurement.


Audit of PSC’s Procurement Process for Contract Action #HHSP233200500508G with Alaska Structures, Inc. (A-03-06-00504, June 26, 2006)Accordingtotheauditreport,PSCcompliedwithapplicablesectionsoftheFARandHealthandHumanServicesAcquisitionRegulationwhileexecutingthisprocurement.


Audit of PSC’s Procurement Process for Contract Action #HHSP233200600085U with Analytic Services, Inc. (A-03-06-00511, June 15, 2006)AuditorsdeterminedthatPSCcompliedwithapplicablesectionsoftheFARandHealthandHumanServicesAcquisitionRegulationwhileexecutingthisprocurement.


Ongoing Audits and ReviewsAuditing Vulnerable Hurricane-Related ProcurementsAuditorsarereviewingallhurricane-relatedcontractualprocurementsover$500,000,focusingonmethodsofprocurement;costsincurred;andthequantity,quality,andtimelinessofdeliverables.Auditorswillexamine72procurements(allofthemvaluedover$500,000),withatotalvalueof$92.7million.AsofSeptember2006,nineauditreportshadbeenissued,coveringanauditedvalueof$26.2million.Transporting Medically Needy EvacueesAuditorsareexaminingtheperformanceandmonetarychargesofacontractorresponsiblefor

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returninganestimated6,000evacueestoTexas,Louisiana,andMississippi.Theevacueesrequireden-routemedicalcareandwereunabletotravelviacommercialairorwithoutmedicalassistance.

Duplicate Medicaid Payments to Providers (Medicaid) AuditorsareexaminingwhetherprovidersaresubmittingclaimsandbeingpaidbymultiplestateMedicaidagenciesforthesameserviceforthesameevacuee.

Duplicate Payments to Nursing Homes (Medicaid)TheauditexamineswhethermultiplenursinghomesinonestateaffectedbythehurricanesaresubmittingclaimsandbeingpaidbythestateMedicaidagencyforthesameserviceforthesamebeneficiary.

Uncompensated Care (Medicaid) AuditorsarereviewingthefundingofonestateaffectedbyHurricaneKatrinaforuncompensatedcareunderaMedicaidwaiver.Theywilldeterminewhetherthestatecompliedwiththefollowingguidance:• Establishedprocedurestopreventabuse,includinganincometest• Establishedprocedurestopreventpaymenttoindividualswhohadothercoverageoroptions

available• Consideredalternativecoveragemethods,suchaspremiumassistanceforprivateinsurance,for

uninsuredevacuees• Maintainedadequatedocumentationtosupportpaymentsmadefromthefund.

Planned Audits and ReviewsDepartment Accounting for Federal Emergency Management Agency Mission Assignments AsofJune30,2006,thespendingauthorityfortheDepartmentofHealthandHumanServices(HHS)FEMA-requestedMAs(tasks)totaled$315.4million.Thisspendingauthorityiscontainedwithin121individualmissionassignmentswithdifferentmagnitudesandobjectives.Auditorswilldeterminewhethertheagencyisappropriatelyaccountingforthesecosts.

Use of Emergency Preparedness Grants in Selected Gulf Coast States AuditorswillexamineuseofHHSemergencypreparednessgrantsinGulfCoaststatestodeterminewhethersuchfunding,providedannuallybytheCDCandtheHealthResourcesandServicesAdmin-istration,wasusedforapprovedpurposesandwhetheritemsfundedbythesegrantswereeffectiveinhurricaneresponseandrecovery.

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depArtment oF houSing And urBAn developmentFinal Audit and Review ProductsSouthwest Alliance of Asset Managers, LLC, Addison Texas; Did Not Effectively Enforce the Lease Terms Over Payment of Property Utilities (Audit Report: 2006-AO-1001, June 23, 2006)AuditorsreviewedwhetherSouthwestAlliancecompliedwiththeDepartmentofHousingandUrbanDevelopment’s(HUD’s)regulations,procedures,andinstructionsinthemanagementofHUD’srealestate-ownedpropertiesheldoffmarketfordisastervictims.Accordingtotheauditreport,SouthwestAlliancegenerallycompliedwiththetermsofitscontract,withoneexception:itdidnotensurethatthedisastervictimstransferredthebillingofpropertyutilityservicesintotheirnameswithinsevendaysofoccupancy,asrequiredbytheleaseagreements.Asaresult,afteroccupancybytenants,HUDpaid$79,306inutilitycostsfor636leasedpropertiesfromSeptember2,2005,throughApril25,2006.

AuditorsrecommendedthatSouthwestAlliancebeinstructedtotakeappropriateactionagainstthetenantswhodonotcomplywiththeleaserequirementsoverutilitypaymentsandthatSouthwestAlli-anceinitiatecollectionactionsagainsttenantstorecoverthe$79,306HUDpaidforutilitycosts.

Cityside Management Corporation, Hammond, Louisiana; Did Not Enforce the Lease Terms Over Payment of Property Utilities (Audit Report: 2006-AO-1002, August 31, 2006)AuditorsdeterminedthatCitysidecompliedwithHUD’sregulations,procedures,andinstructionsinmanagingHUD’srealestate-ownedpropertiesheldoffmarkettohousedisastervictims,withoneexception:itdidnotensurethatalldisastervictimstransferredthebillingofpropertyutilityservicesintotheirnamesandpaidchargesforutilityservicesinfull,asrequiredbytheleaseagreements.Accordingtotheauditreport,Citysidedidnotenforcefulltenantcompliancewiththeleasetermsoverpaymentofpropertyutilitieswhenstaffbecameawareoftheissue.Instead,Citysideused$17,744inHUDfundstopaythemonthlybillingson133leasedpropertiesfromOctober13,2005,toMarch31,2006.

AuditorsrecommendedthatCitysidebeinstructedtotakeappropriateactionagainsttenantswhodonotcomplywiththeinstructionandrequirementsregardingutilitypayments,andtoinitiatecollec-tionactionsagainsttenantstorecoverthe$17,744thatHUDpaidforutilitycostsandanyadditionalcostsHUDincurredafterMarch31,2006.

Departments’ Procurement Office Did Not Maintain Complete Contract Files; Washington, DC (Audit Report: 2006-AT-0001, August 29, 2006)Accordingtotheauditreport,theProcurementOfficedidnotmaintaincompletefilesforcontractactionsinresponsetodisaster-relatedrelief.In11of13contractfilesreviewed,auditorsdeterminedthatinformationwaseithermissingornotpreparedaccordingtoapplicableregulations,policies,andprocedures.AuditorsdeterminedthattheProcurementOfficelackedadequatecontrolstoensurethat

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fileswerecompletewhencontractsneededtobeawardedpromptly.Asaresult,auditorsdeterminedHUDcannotbeassuredthatcontractfilesrelatedtoemergencycontractactionswerecompleteandcompliedwithapplicablestatutes,regulations,policies,andprocedures.

AuditorsrecommendedthattheChiefProcurementOfficerdevelopandimplementinternalcontrolstoensurecontractfilesarecompleteandcomplywithapplicablestatutes,regulations,policies,andprocedures.

Ongoing Audits and ReviewsCommunity Development Block Grant (CDBG) Disaster FundingAuditorsarereviewingcontrolsovertheCDBGhomeownersprogramthatisfundedthroughblockgrantstoMississippiandLouisiana.

Katrina Disaster Housing Assistance Program (KDHAP) VouchersAuditorsarereviewingfundsissuedundertheprogram.

Coordination With State AuditorsHUDauditorsareworkingwithstateauditorsintheaffectedareatocoordinatevariousauditefforts.

nAtionAl AeronAuticS And SpAce AdminiStrAtionFinal Audit and Review Products NASA’s Management of Hurricane Katrina Disaster Relief Efforts (ML-06-009, August 29, 2006)AuditorsdeterminedthatthenationalAeronauticsandSpaceAdministration(nASA)establishedadequateinternalcontrolsforsegregating,accumulating,andaccountingforFY2005fundsusedforHurricaneKatrinarecoveryandreconstruction.Also,nASA’sestimatedfundingwasreasonableandtheproceduresandprocessesusedtospendthefunds,ingeneral,wereadequatetoensureusefortheirintendedpurposes.

Somedeficienciesincontractadministrationwereidentified;nASAisactingonauditors’recom-mendationstocorrectthedeficiencies.

NASA’s Implementation of the National Incident Management System (IG-06-016, August 29, 2006)Accordingtotheauditreport,nASA’semergencypreparednessplansdidnotfullycomplywiththenASAnationalIncidentManagementSystem(nIMS)ImplementationPlan.AuditorsmadeseveralrecommendationsandnASAistakingcorrectiveaction.

Ongoing Audits and ReviewsAudit of FEMA Mission Assignments for Hurricane Katrina Disaster Relief Efforts

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TheobjectiveistoreviewandreportonnASA’saccountingforFEMAmissionassignmentfundsforHurricaneKatrinadisasterreliefefforts.

Planned Audits and Reviews noadditionalauditsareplanned.

SmAll BuSineSS AdminiStrAtionFinal Audit and Review ProductsAudit of Loan Disbursements Following the 2005 Gulf Coast Hurricanes Katrina, Rita, and Wilma (6-29, September 19, 2006)Auditorsstudiedthelowrateofdisasterloandisbursementstodetermineimpedimentsintheloanclosinganddisbursementprocessesafterthedisaster.Auditorsreviewedprocessingdatafor220loansintheSmallBusinessAdministration’s(SBA’s)DisasterCreditManagementSystem(DCMS).Oftheseloans,37%hadnoproblems.Theproblemswiththeremainderoftheloanswereattributedprimarilytoborroweractions,suchasdelaysinfilingclosingdocumentsanddifficultiesgettingSBAassistanceduringtheclosingprocess,indecisionorreluctancetoassumetheloans,andrequeststomodifyloantermsandconditionsortoupdateborrowerinformation.

Becauseloanprocessingtimeswerewithinexpectedrangesandwerelargelyborrowerdriven,audi-torsmadenorecommendations.However,theOIGhasinitiatedanauditofSBA’sloanmodificationprocessassociatedwithborrowerrelocations,anditmayrecommendimprovementsneededtoprocesstheseactionsmoreexpeditiously.

The Disaster Credit Management System Upgrade Project Needs a Certification and Accreditation Prior to Production (6-21, April 27, 2006)AuditorsdeterminedthatSBA’sDCMSUpgradedidnotincludeaplannedcertificationandaccredita-tion.SBAagreedtotheauditors’recommendationthatitperformafullcertificationandaccreditationofthesystembeforeplacingitintoproduction.

Review of the Disaster Credit Management System—Performance Test Plan (6-24, June 8, 2006)AreviewoftestplansforDCMSdeterminedthatSBAwasonlyplanningtotestthesystemforamaximumof2,000concurrentusersbeforeacceptingit,althoughthesystemwasexpectedtosupport10,000concurrentusers.

SBAagreedtoauditors’recommendationthattheagencymodifyitstestplansandcontinuetoimproveandfinetunefuturesystemenhancements.

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Advisory Memorandum Report on Controls Relating to Duplication of Benefits to Gulf Coast States (06-28, September 25, 2006)AuditorsdeterminedthatSBAdidnottakeadequatestepstocoordinateaiddistributioneffortswithMississippiDevelopmentAuthority(MDA),identifydisasterloanstobeimpactedbyHUDgrants,orproperlytestdatatransfermechanismstoensurethatinformationsharedbetweenagenciesissafe-guardedandthatduplicatebenefittransactionsareproperlyrecordedforfinancialreportingpurposes.

SBAagreedwiththeauditors’recommendationsthatitstrengthencontrolstoensurethatdatatransferredbetweenagenciesisprocessedcorrectly;thatloansareaccuratelyadjustedbeforegrantfundsaredisbursed;andthatfinancialtransactionsareproperlyinitiated,recorded,processed,andreportedintheagency’sfinancialstatements.

Flexible Staffing of SBA Personnel During Emergencies or Catastrophes to Aid Disaster Loan Processing (06-31, September 25, 2006)Agencyofficialsagreedtoauditors’recommendationsthatSBAdevelopacatastrophicdisasterplanthatincludesflexiblestaffingofSBApersonnelagency-wideandthatSBAdetermineinfrastructurerequirementsneededtofullyactivatetheflexiblestaffingcatastrophicdisasterplan.

Ongoing Audits and ReviewsGulf Coast Hurricanes Loss Verification ProcessThisauditisexaminingwhetherthedisasterloanlossverificationprocessresultedinaccuratepropertydamageassessmentsandloanvalues.

Hurricane Katrina and Related OIG InvestigationsAuditorsareexaminingearlydefaultpatternsandtrendstosupportauditandinvestigativeeffortsinidentifyingfraud,waste,andabuserelatedtoKatrina.Theeffortisevolvingaspotentialriskssurfacethroughmultiplesources,includingthePCIETaskForceandhotlineallegations.

PCIE Review of Gulf Coast Hurricane Small Business ProcurementsAspartofthePCIEContractingSubgroup,theOIGalreadyhasissuedareviewguideforotherOIGsassessingprocuringagencycompliancewithsmallbusinesscontractingrequirementsinthewakeofthe2005hurricanes.TheOIGwillissueareportsummarizingtheresultsofreviewsbyotherOIGs.

Audit of Borrower Relocation ProcessAuditorsareexaminingwhetherSBAhascontrolsinplacetoeffectivelyprocessandmonitorloanmodificationsassociatedwithborrowerrelocations.

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Review of 8(a) Contracts Related to the 2005 Gulf Coast HurricanesThisauditwillexaminewhether8(a)companiesarereceivingandperforming2005GulfCoasthurri-canecontractsaccordingto8(a)programandsmallbusinessrequirements.

Review of the Expedited Disaster Loan Application ProcessAuditorsareevaluatingthequalityandtimelinessofloansapprovedundertheExpeditedLoanApplica-tionProcess.

FY 2006 Financial Statement AuditTheannualfinancialstatementauditisbeingperformedbyaCertifiedPublicAccountingfirm.Theauditincludestestinginternalcontrolsrelatedtoprocessingofdisasterloans.

Planned Audits and ReviewsReview of the Disaster Loan Servicing CentersThisauditwilldeterminewhetherloanservicingcentersproperlyservicedandtransferredloanstoliquidationinatimelymanner.

Review of Loan Progress PaymentsAuditorswilldeterminewhetherloanprogresspaymentswereproperlysupportedandmadeaccordingtoSBAprocedures.

Review of SBA’s Disaster Staffing and MobilizationThisauditwillexaminewhetherGulfCoastdisasterstafflevelswereappropriateandwhetherstaffwereproperlytrainedanddeployed.

Duplication of Benefits With Disaster Assistance Programs and Insurance BenefitsAuditorswilldeterminewhetherloanrecipientsreceivedduplicatebenefitsfromotheragenciesorfrominsuranceproceedsand,ifso,whetherSBAloanswereappropriatelyreduced.

Review of Disaster Assistance-Related Complaints and ReferralsTheauditwilldeterminewhethercomplaintsorreferralsofprogramabuseorwrongdoingarevalidand,ifso,evaluatetheimpactontheSBADisasterAssistanceLoanprogram.

SociAl Security AdminiStrAtionFinal Audit and Review Products The Social Security Administration’s Service Delivery to Individuals and Beneficiaries Affected by

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Hurricanes Katrina and Rita (A-06-06-26072)Accordingtotheevaluationreport,theSocialSecurityAdministration(SSA)tooknumerousstepstoensurecontinuedserviceinthewakeofthehurricanes,includingimplementingemergencyproce-dures,locatingemployeesandlaunchingrecoveryoperationsatdamagedfacilities,continuingservicedeliverytobeneficiariesandrecipients,andexpendingfundstoaddresstheemergency.Auditorsdeter-minedthatapproximately1millionbeneficiariesandrecipientsreceivingapproximately$700millioninmonthlybenefitpaymentswereaffected,withmorethan1,200SSAemployeesdisplacedandnumerousSSAfacilitiesdamagedandinoperable.

However,auditorsalsodeterminedthatSSAcouldimproveitsresponseinsuchsituationsbyemphasizingtheimportanceanduseofitsemergencycontactproceduresandnationalemergencytoll-freenumber,ensuringthatstaffersfollowproceduresforissuingSocialSecuritynumber(SSn)verificationprintouts,andimplementingacentralizedcommonaccountingnumbertotrackcostswhendisastersoccur.

Ongoing Audits and ReviewsReview of the Social Security Administration’s Accountability of FEMA Funds Provided for Hurricane Relief EffortsTheobjectiveistoevaluatetheeffectivenessofSSA’sinternalcontrolproceduresandaccountabilityoffundsprovidedbyFEMAinresponsetohurricanesKatrina,Rita,andWilma.

New Orleans, LA, March 13, 2006—Hurri-cane Katrina disaster victims Loi and Hinh Thi Nguyen paint their new fishing boat that they purchased with a SBA loan. SBA provides disaster loans for primary resi-dences, businesses, and non-profit orga-nizations. (Marvin Nauman/FEMA photo)

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treASury inSpector generAl For tAx AdminiStrAtionFinal Audit and Review Products Tax Products and Computer Programs for Individual Income Tax Returns Were Accurately Updated for the 2006 Filing Season (2006-40-088, May 5, 2006)TheKatrinaEmergencyTaxReliefAct(KETRA),signedintolawSeptember23,2005,contained$3.3billioninestimatedtaxreliefforFY2006.TheGulfOpportunity(GO)ZonelegislationfollowedinDecember2005,withanadditional$3.9billioninestimatedtaxreliefforFY2006.

Accordingtotheauditreport,thetaxreliefprovisionswereimplementedcorrectly.Therewerenoauditrecommendations.

The Exempt Organizations Function Effectively Processed Requests for Tax-Exempt Status From Charitable Organizations Supporting Hurricane Relief (2006-10-089, June 5, 2006)OnSeptember6,2005,theInternalRevenueService(IRS)announceditwouldexpediteprocessingofapplicationsfortax-exemptstatusofneworganizationsprovidingreliefforvictimsofHurricaneKatrina.

AuditorsdeterminedthattheExemptOrganizations(EO)functionledtoeffectiveandtimelyapplicationprocessing.TheEOfunctionestablishedprocedurestoensurethatreferralsofpotentiallyabusiveorganizationswerereviewedtodeterminewhethertheallegationsshouldbesenttoanEOExaminationsfunctiongroupforfurtherdevelopment.

Auditorsmadenorecommendations;however,keyIRSmanagementofficialsreviewedthereportbeforeitwasissuedandagreedwiththefacts,findings,andoutcomemeasures.

Taxpayers Residing in the Hurricanes Katrina and Rita Disaster Areas Were Accurately Identified for Tax Relief (2006-40-109, July 31, 2006)TheIRShastheauthoritytograntextensionstofilecertaintaxreturnsandpaycertaintaxes,waivepenalties,andabateinterestfortaxpayersaffectedbynaturaldisasterssuchashurricanes.Accordingtotheauditreport,theIRScorrectlyidentifiedtaxpayersaffectedbythehurricanesandproperlyplaceddisasterindicatorsontheiraccountstopreventbalance-duenoticesfrombeingissued.

Auditorsdeterminedthatasmallnumberofindicatorsgeneratedmanually(ratherthanbycomputer)hadanincorrectbeginningorendingdateforthedisaster-relatedtaxreliefperiod.Asaresult,taxpayerswiththeseindicatorsontheiraccountsdidnotreceivethefullbenefitofthedisasterreliefprovisions.

AuditorsadvisedtheIRSofthisduringthereview,andIRSmanagementactedtocorrectthosedisasterindicators.AuditorsalsorecommendedthatIRSemployeesregularlyreceiveanupdatedjobaidformanualdisasterindicatorsandemphasizetheimportanceofusingthecorrectdatesforinterest

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andpenaltycalculations.IRSmanagementagreedwiththeadditionalrecommendationandistakingcorrectiveaction.

Automated Underreporter Program Compliance Activities Were Properly Suspended for Taxpayers Affected by Hurricanes Katrina and Rita, but Notification Could Be Improved(2006-40-104, August 25, 2006)AuditorsdeterminedthattheIRSensuredemployeestookpromptactiontosuspendAutomatedUnderreporter(AUR)Programcomplianceactionsandpreventnoticesfrombeingissuedtoaffectedtaxpayers.

However,accordingtotheauditreport,theIRScouldimproveitsnotificationtotaxpayerswhohadalreadyreceivedAURnoticestoadvisethemofthetaxreliefperiod.TaxpayerswhohadnotseentheIRSnewsreleasesorvisitedtheIRSWebsitemayhavebeenunawaretheydidnotneedtogathersupportingdocumentationconcerningthediscrepanciesbythedatespecifiedonthenotice.Theyalsomayhavebeenunawareofavailabledisasterrelieforhowtoobtainadditionalinformation.

Toeffectivelycommunicatethetaxreliefgrantedduringcatastrophicdisasters,auditorsrecom-mendedtheAURProgramsendanoticedirectlytotaxpayerswhohadpreviouslyreceivedAURcorre-spondence,notifyingthemthatcomplianceactivitieshadbeensuspendedbecauseofadisaster.

IRSmanagementdisagreedwiththerecommendations,citingvariouslogisticalandcostchallenges.AuditorsdisagreedwiththeIRS’sreasoningandhavecalledfortheIRStoworkwiththeU.S.PostalServiceonasuitablesolutiontothenotificationissue.

Individual Tax Returns Were Timely Processed in 2006, but Opportunities Exist to Improve Verification of Certain Tax Deductions (2006-40-164, September 20, 2006)Accordingtotheauditreport,duringthe2006filingseasontheIRSprocessedreturnsonscheduleandissuedrefundswithintherequired45calendardays.Mostkeytaxlawchangesforthe2006filingseasonwereimplementedcorrectly,eventhoughthefilingseasonwasunusualduetothesignificanttaxlawchangestoassisttaxpayersadverselyaffectedbytheGulfCoasthurricanes.

However,auditorsidentifiedopportunitiesandmaderecommendationstoimprovetheprocessingandaccuracyofreturnscontainingthefollowingtaxprovisions:• Taxpayersovertheageof70½receivingimproperIndividualRetirementAccountdeductions• Eligibletaxpayersnottakingfulladvantageofthesalestaxdeduction• Singletaxpayerscontinuingtoclaima“dualbenefit”ofboththetuitionandfeesdeductionandthe

EducationCredit.IRSmanagementgenerallyagreedwiththeauditrecommendationsandistakingcorrectiveaction.

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Customer Service at Taxpayer Assistance Centers Showed Improvement During the 2006 Filing Season (2006-40-122, August 30, 2006)AuditorsdeterminedthatsomepersonnelattheIRS’swalk-inserviceTaxpayerAssistanceCenters(TAC)werenotproperlyaddressingtaxlawquestionsrelatedtotheKatrinaEmergencyTaxReliefAct.SomeTACassistorsansweredquestionsincorrectlybecausetheydidnotusetherequiredtools.Othercontributingfactorsincludedthecomplexityofthetaxlawandthenumberofpotentialquestions.WhenTACassistorsdidnotorcouldnotanswerquestionsorrefertaxpayerstootherIRSsources,taxpayersultimatelywereprovidednoservice,accordingtotheauditreport.

AuditorsrecommendedthattheIRSdevelopormodifyprocedurestoensurethatassistorsproperlyanswertaxpayers’questions,anddevelopguidelinesandprovidetrainingtoTACmanagersandassis-torsonhowtomanagecustomertrafficandwaittimes.IRSmanagementagreedwiththerecommen-dationsandistakingcorrectiveaction.

Untimely Processing of Taxpayer Carryback Loss Claims Resulted in Significant Interest Costs (2006-40-139, August 31, 2006)Whentaxpayersincurasignificantlossfrombusinessactivitiesornaturaldisasters,totheextenttheirdeductionsexceedtheirincome,theycanopttocarrythelossbacktopriortaxyearsandobtainarefundoftaxespaidinthoseprioryearsbyfilinganApplicationforTentativeRefund(Form1045)oranAmendedU.S.IndividualIncomeTaxReturn(Form1040X).TheKETRAandGOZonelawsincludeprovisionsthateliminatethelimitationsonpersonalcasualtyortheftlossescausedbythe2005hurricanes.

AuditorsdeterminedthattheIRSdidnotprocesssomecarrybackclaimsandissuerefundswithin45calendardaysofreceiptoftheformortheduedateofthelossyearreturnasrequiredtoavoidpayinginterestontherefundamounts.

Theauditors’concernwasheightenedbecausethevolumeofcarrybackclaimstheIRSreceivesislikelytoincreaseasaresultofthehurricanes.TheimpactofinefficienciesintheIRS’procedureswillbecompoundedastheinventoryofclaimsgrows.

Auditorsmadenumerousrecommendationstohelpimprovetheidentificationandprocessingoftheseclaims.IRSmanagementagreedandistakingcorrectiveaction.

Ongoing Audits and ReviewsReview of Hurricane Tax Relief Efforts for Compliance Activities (Review No. 200630006) InresponsetothesixseparatefederaldisasterdeclarationsthatPresidentBushmadeforthe2005hurricanes,theIRSuseditsadministrativeauthoritytograntbroadtaxreliefforaffectedtaxpayers.Reliefwasautomaticallygrantedtotaxpayerswhoresideorhavebusinessesinthehardesthitareas,

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generallythosedesignatedbyFEMAfor“individual”relief,whosetaxpayeraccountsweretobefrozensystemically.Additionally,reliefwasgrantedtotaxpayersinareasdesignatedbyFEMAfor“public”relief;however,thesetaxpayershadtodeterminetheireligibility.

AuditorswillreviewIRSexaminationandcollectionactivitiesfortaxpayersintheZIPcodesFEMAidentifiedas“individual”affectedareas,whoseaccountsweretobesystemicallyfrozen.AnyproblemsinthisareawillneedtobeaddressedtoensurethataffectedtaxpayersarenotundulyburdenedbytheIRSnoworinfuturenaturaldisasterrecoveryperiods.

depArtment oF the treASuryOngoing Audits and ReviewsOffice of the Comptroller of the Currency’s Response to Hurricanes Katrina and Rita (Project No. A-BK-06-001) andOffice of Thrift Supervisor’s Response to Hurricanes Katrina and Rita (Project No. A-BK-06-002) TheOfficeoftheComptrolleroftheCurrency’s(OCC’s)andOfficeofThriftSupervisor’s(OTS’s)auditsbothhavethefollowingtwoobjectives:• DeterminethepreparednessforandresponsivenessoftheOCCandOTSinaddressingtheneeds

ofnationalbanks,thrifts,andsavingsandloansandtheircustomersduringthehurricanes• DetermineOCCandOTSplansandabilitiestoassessandmanageincreasedrisksresultingfrom

thehurricanes’impactontheirregulatedinstitutionsandfromtherelaxationofcertainoperational,compliance,andreportingrequirements.TheOIGisfocusingontheadequacyandeffectivenessofOCC’sandOTS’scontinuityofoperationsplansaswellastheirabilitiestorespondandmonitorfinancialinstitutionsfollowingthehurricanes.

depArtment oF AgricultureFinal Audit and Review ProductsControls Over Multifamily Housing Funds Provided for Hurricane Relief Efforts(Audit 04601-0013-Ch)TheRuralHousingService(RHS)placed11,000evacueesin4,100ruralhousingapartmentunitsin45statesandprovided$2.6millioninemergencyrentalassistance.AuditorsdeterminedthatmostvictimsneededonlyadequatehousingandnotrentalassistancebecausethatwasprovidedbyFEMA’sTransitionalHousingAssistanceProgram.Accordingtotheauditreport,RHS’sfailuretocoordinatewithotheragenciesresultedinduplicationofmuchofthe$2.6millioninemergencyrentalassistanceprovidedbyRHS.Auditorsalsodeterminedthefollowing:• TheRHSdatabasecontainedgenerallyinaccurateandincompleteinformation• RHSlackedsufficientcontrolstoidentifyvictimsusingotherindividuals’FEMAidentifying

numberstoobtainassistance• RHSdidnotproperlymonitorownersandmanagementagents,sosomeownersrequiredvictimsto

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payrentforRuralRentalHousing(RRH)unitseventhoughtheownershadreceivedrentalassis-tanceforthosevictimsdirectlyfromRHS

• Someownersreclassifiedpre-existingtenantsashurricanevictimswhentheyhadnochangeinincomeorothercircumstances,resultinginunnecessaryRRHrentalassistancetothosetenants.

Asaresultoftheaudit,RHSisimplementingcorrectiveactionstoprepareforfuturedisastersbydevelopingpolicyandproceduresforcoordinatingactionsandsharingcomputerinformationrelatedtohousingassistancewithotherfederalagenciesthatalsoprovidesuchassistance.Inaddition,RHSwillimprovetheagency’sinformationsystemandrelatedcontrolsovertheaccuracyandcompletenessofdata.

Non-recourse Marketing Assistance Farm-Stored Loans (03601-47-Te)Marketingassistanceloans(MAL)helpfarmersstorecropsatharvestwhenpricesarelowandsellthemlateratmoreadvantageousprices.Toaddressthehurricanes’effectongrainstorage,on-groundstoragewasapprovedforcommoditiesofferedasMALcollateralforcropyears2005and2006.

AuditorsdeterminedthatFarmServiceAgency(FSA)controlsgenerallywereadequate,buttheagencycouldimprovehowitsecuresloancollateral.AmbiguitiesinproceduresandregulationsledFSAtoovervaluehigh-moisturecollateralfor16loansby80%,ornearly$1.6million;countyofficesdidnotconsistentlyusecommoditysealstodeterminecollateral;and,evenwhenregulationswereclear,countyofficesdidnotalwayscomply.Asaresultoftheaudit,FSAagreedtodothefollowing:• ClarifyproceduresregardingMALcollateralvalueoflow-quality,high-moisturecommoditiesand

theuseofcommodityloanseals• Determineandrecoverpotentiallyoverstatedvalueofsuchcollateral• StrengthenspotchecksofloancollateralandproceduresforcompletingandreviewingMAL

documents• TrainthestateandcountyofficethatcommittederrorsadministeringMALs.

Ongoing Audits and ReviewsHurricane Relief Initiative—Hurricane Indemnity Program and Tree Indemnity Program (03-601-0013-AT)ThisauditexamineswhetherthecontrolsovertheHurricaneIndemnityProgramandtheTreeIndemnityProgramareadequate.

Risk Management Agency’s 2005 Hurricane Relief Efforts in Florida (05-099-0028-AT)Auditorsareassessingtheadequacyofcontrolsoverhurricanereliefefforts.

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Controls Over Single Family Housing Funds Provided for Hurricane Relief Efforts (04-601-15-CH)Auditorsareevaluatingaccountabilityforsingle-familyhousingassistancethattheUnitedStatesDepartmentofAgricultureprovidedtodisastervictims.

Hurricane Relief Initiatives—Barge Movement and Transportation Differential Agreements (03-601-0021-KC) AuditorsareexaminingwhetherCommodityCreditCorporationpaymentsforbargemovement,bargeunloading,andtransportationdifferentialagreementsremovedbargesfromthenewOrleansarea,therebyreducingtransportationdemandsforthesebargesontheupperMississippiRiver.

Hurricane Relief Initiatives—Livestock and Feed Indemnity Programs (03-601-0023-KC)AuditorswillassessadequacyofcontrolsovertheLivestockandFeedIndemnityPrograms.

Hurricane Relief Initiatives—Emergency Forestry Conservation Reserve Program(03-601-0024-KC)ThisauditexaminestheadequacyofcontrolsovertheEmergencyForestryConservationReserveProgram.

Hurricane Relief Initiatives—Natural Resources Conservation Service Emergency Watershed Protection Program and Dead Animal Debris Disposal Project and Farm Service Agency Emergency Conservation Program (50-601-0051-KC)AuditorsaremonitoringfundinglevelstoevaluatetheadequacyofmanagementcontrolsandreviewthereasonablenessofreimbursementsundertheEmergencyWatershedProtectionProgram(EWP)andtheEmergencyConservationProgram(ECP).TheyalsowillaccesswaiversorrevisedproceduresapplicabletoEWPandECPandreviewnaturalResourcesConservationService(nRCS)effortstoassistagriculturalproducersinthedisposalofdeadanimaldebris.

Food and Nutrition Service (FNS) Disaster Food Stamp Program (DFSP) for Hurricanes Katrina, Rita—Louisiana, Mississippi, and Texas (27099-49-Te)TheauditexamineswhetherFnSRegionalOfficesareproperlyoverseeingDFSPoperationsandwhetherstateagenciesareoperatingtheDFSPaccordingtowaiversapprovedbytheFnSAdministrator.

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Planned Audits and ReviewsReview of Crop Insurance Emergency LossAuditorswilldeterminetheadequacyofcontrolsoverthisprogram.

Controls Over Housing Funds Provided for Hurricane ReliefTheauditwillassesstheadequacyofcontrolsoverthesehousingfunds.

Review of Loans for Telecommunications and Electrical AssistanceAuditorswilldeterminewhethertheRuralUtilitiesServiceadministeredDirectRuralTelecommunica-tionsloansaccordingtoregulationsandwhetherfundswereusedforapprovedpurposes.

united StAteS poStAl ServiceFinal Audit and Review ProductsReview of Postal Service’s Replacement and Repair of Facilities Affected by Hurricane Katrina (FA-MA-06-001, May 26, 2006)AuditorsreportedthatPostalServicefacilitiesresumedoperationsasquicklyaspossibleafterHurri-caneKatrina.TheFacilityServiceOffice(FSO)suspendedrentpaymentsforleasedfacilitiesdeemedunusableasaresultofthestorm.

AuditorsidentifiedseveralwaystoimprovethePostalService’sresponsetofuturedisasters,includingimprovingfacilityaccessibility,followingstandardizedlockdownprocedures,pre-arrangingforuseofmobilehomeandtrailerhaulers,improvingcommunications,providingappropriatelysizedgenerators,andsecuringmultiplenationalclean-upcontracts.PostalServicemanagementagreedtodevelopmanyoftheseprocedures.

Postal Inspection Service’s Procurement Transactions Related to Hurricane Katrina Response, Recovery, and Reconstruct Efforts (SA-AR-06-004, May 30, 2006)Accordingtotheauditreport,thePostalServiceandthePostalInspectionServicehadeffectivecontrolsoverprocurementtransactionsrelatedtoHurricaneKatrinaefforts.Procurementtransactionswerevalid,authorized,andsupportedbytheappropriatedocumentation;however,auditorsdeterminedthatmanagementcouldstrengthencontrolstoensurethatInternationalMerchantPurchaseAutho-rizationCard(IMPAC)cardholdersreview,sign,anddateU.S.bankstatementswithinfivedaysofreceipt,asrequired.

Postal Inspection Service Emergency Preparedness for Hurricane Katrina (SA-AR-06-005, June 5, 2006)AuditorsconcludedthatthePostalInspectionServicerespondedtoHurricaneKatrinarapidlyandsuccessfullyandtookactionsconsistentwiththeIntegratedEmergencyManagementPlan(IEMP).

norecommendationsweremadebytheauditors.

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Hurricane Katrina—The Effectiveness of the Postal Service Transportation and Logistics Network (NL-AR-06-006, June 29, 2006)AuditorsdeterminedthatthePostalServicetooktimelyactiontosuspendandterminateunneededhighwaycontractroutesinthehurricaneemergencyzone,savingabout$2.8millionandfreeingthosefundsforemergencytransportationneeds.

AuditorsrecommendedandPostalServicemanagementagreedtoverifytheterminationofunneededhighwaycontractroutes;coordinatewithappropriatefederalauthoritiestobetterleveragePostalServicecapacityduringfuturenationalemergencies;andreviseorvalidateIEMPandotherappropriatepolicies.

Postal Service Emergency Preparedness (EP) for Hurricanes Katrina and Rita (SA-AR-06-007, August 3, 2006)AuditorsdeterminedthatwhilethePostalServicetooknoteworthyactionsinrespondingtothehurri-canes,opportunitiesexisttoenhanceemergencypreparednessandresponse.

Auditorsrecommendedandmanagementagreedtodothefollowing:• RevisetheIEMPtosufficientlyaddressareaandheadquarterslevelfunctions• Ensurefieldoperationspersonnelcomplete,approve,validate,andimplementIEMPsthatincorpo-

ratestandaloneplansforhurricanesandlessonslearned• DevelopanalternativeincidentmanagementsystemtoassistthePostalServiceinmanagingemer-

genciesthroughouteachstageofemergencypreparedness• Establishperformancemeasuresforallhazardstoachieveemergencymanagementgoalsthateffec-

tivelyenhancethePostalService’sEPandincorporatethemintothecoregoalsforheadquarters,area,andfield-levelemergencymanagers.

Postal Service Actions to Locate and Track Employees After Hurricane Katrina (HM-AR-06-005, August 28, 2006)Accordingtotheauditreport,PostalServiceactionstoinitiallylocateemployeesinthedaysafterHurricaneKatrinaweretimelyandeffective,giventhedevastationcausedtotheaffectedareas.TheMississippiDistrict’sactionstotrackemployees’locationsinthedaysandmonthsfollowingthehurri-canewereeffective,buttheSouthwestArea’sactionsneededimprovement.

AlthoughthePostalServicehastakenmanycorrectiveactions,auditorsrecommendedandmanage-mentagreedtohelpimprovethePostalService’sabilitytoaccountforemployeesafteranaturalemergency.

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other hurricAne recovery AuditSGovernment Accountability OfficeEnhanced Leadership, Capabilities, and Accountability Controls Will Improve the Effectiveness of the Nation’s Preparedness, Response, and Recovery System (GAO-06-618, September 2006) TheGAOteamexaminingDHS’soverallresponsetoHurricaneKatrinaobservedthatthedisaster’sscopeanddestructionseverelytestedalllevelsofgovernmentintheaffectedareasandthenationasawhole.Thedestructionalmostimmediatelyoverwhelmedstateandlocalfirstresponders,andtheresponserequiredoutsideactionandsupportfrommanysources.

Auditorsoutlinedthreebasicelementsinpreparingfor,respondingto,andrecoveringfromanycatastrophicdisaster:leadership,capabilities,andaccountability.DHShasmaderevisionstothenationalResponsePlandesignedtofurtherclarifyfederalrolesandresponsibilities,buttheeffectsofthesemeasureshasnotyetbeentestedinanactualdisaster.

Accordingtotheauditreport,thedevelopmentofcapabilitiesneededforcatastrophicdisastersshouldbepartofanoverallnationaleffortdesignedtointegrateanddefinewhatneedstobedone,where,bywhom,andhowwell.AuditorsreportedthatDHShasannouncedanumberofactionstoimprovereadinessandresponseforcatastrophicdisasters;however,thereislittleinformationavailableontheextenttowhichthesechangeswereoperationalatthetimeoftheSeptember2006GAOreport.

Recognizingthatitisdifficulttobalancethedemandforrapidresponseandrecoverywiththeneedforappropriateaccountabilityafteradisaster,theauditorscitedsomeDHSfailurestoproperlybalancethoseneeds.Accordingtotheauditreport,DHShastakenstepstoaddresssomeoftheauditors’concerns,includingworkingtocompetemorecontractsforkeyservicesinadvanceofadisasterandimprovingitsabilitytoverifyindividualclaimanteligibilityfordisasterbenefitsandassistance.

TheGAOreportincludessixspecificrecommendationstotheSecretaryofHomelandSecurity.TheDHSgenerallyagreedwiththerecommendations,describingactionstakentoimplementthem.Thereportalsoincludesamatterforcongressionalconsideration.(Linkto:http://www.gao.gov/new.items/d06618.pdf)

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inspectionsThe Department of Health and Human Services TheOIGcompletedoneinspectionreportduringthisperiod.Theofficeiscontinuingitsinspectionofthreeadditionalmatters.

Completed InspectionNursing Home Emergency Preparedness and Response During Recent Hurricanes (OEI-06-06-00020, August 2006)ThisfinalreportrecommendsthattheCentersforMedicare&MedicaidServices(CMS)considerstrengtheningfederalcertificationstandardsfornursinghomeemergencyplans.ThestudyofselectednursinghomesinfiveGulfStatesreportedthatallexperiencedproblems—whetherevacuatingorshel-teringinplace—duringthe2004and2005hurricanes.Issuesthatoftenaroseincludethefollowing:• nursinghomeadministratorsandstaffdidnotfollowtheiremergencyplans• Suggestedprovisionsweremissingfromplans• Theneedtoenhancecollaborationamongstateandlocalemergencymedicalentities.

CMSconcurredwiththereport’sfindings.Thecentersareexploringwaystostrengthenfederalcertificationstandardsforemergencypreparednessandtopromotebettercoordinationamongfederal,state,andlocalemergencymanagemententities.

Ongoing Inspections Emergency Response to Katrina: Use of the International Merchant Purchase Authorization Card (OEI-07-06-00150)TheOIGisconductinganinternalanalysisabouthowHHSpersonneldeployedinresponsetoHurricaneKatrina-usedpurchasecards.Thestudyfocusesoncompliancewithbothestablishedandemergencyspendingguidelinesandprocedures.ItbuildsonOIG’sMarch2003report“Interna-tionalMerchantPurchaseAuthorizationCardProgram:ReviewofCalendarYear2001Transactions,”whichreportedthat44%oftransactionssampleddidnotfullycomplywithrequirementsforusingthepurchasecards.

Commissioned Corps Deployment in Response to Hurricanes Katrina and Rita (OEI-09-06-00030)TheU.S.PublicHealthServiceCommissionedCorps’responsestohurricanesKatrinaandRitaarebeingevaluatedtodeterminewhethertheCorpscouldimproveitsperformanceinfuturepublichealthemergenciesand,ifso,how.IntheweeksafterHurricaneKatrina,morethan1,400officersworkedwithstate,local,andprivateagenciesinsevenGulfStates.Afteronemonth,morethan700remainedintheGulfStatesandevacueeareastoprovidereliefservices.ThedeploymentinresponsetothehurricaneswasoneofthelargestintheCorps’207-yearhistory.ItcameastheCorpswasworkingtowarditsongoinggoalofbeing100%deployable.

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Katrina-Related Medical Review Contract (OEI-05-06-00140)HHSprogrambeneficiarieswholivedintheGulfStatesmayhavebeenevacuatedtovariousplacesintheUnitedStates.ToensurethatvictimsofKatrinareceivedneededhealthcare,HHSusedthewaiversinSections1115and1135oftheSocialSecurityAct,42U.S.C.§§1315and1320b-5,toexpandMedicaidcoveragecriteria.Inthisstudy,theservicesandpaymentsmadeunderSection1115,MedicaidwaiversforKatrinavictims,arebeingdescribed,andtheextenttowhichprovidersenrolledinMedicaidunderSection1135oftheSocialSecurityAct,42U.S.C.§1320b-5,waiverauthorityisbeingdetermined.

Department of Housing and Urban Development TheOIGisusingforensicauditorsintheGulfCoastregiontoreviewandevaluatethefollowingresources:• Managementandmarketingfirms• Publichousingauthorities• Multifamilyproperties• TheMississippiDevelopmentAuthority• HurricaneKatrinaFraudTaskForce—LouisianaStateUniversity

Management and Marketing FirmsAcompany,HooksVanHolm,receivedadvancepaymentsfromHUDtorehabilitateandrepairrealestate-ownedpropertiesfordisastervictims.HooksVanHolm’scontractwithHUDwasincreasedmorethan$15milliontorepairsingle-familypropertiessetasideforHurricaneKatrinavictims.TheOIGreviewedtheworkperformedtodeterminewhetherthecontractorproperlyaccountedforandmadethenecessaryrepairs,asspecified.Interviews,reviewsofdocumentation,andpropertyinspectionsshowedthattherepairworkwasadequateandthecontractormaintainedproperdocumentationfortherepairs.

Public Housing Authorities HUDconductsinspectionsofpublichousingauthoritiestoensurethatadequateproceduresandcontrolsareinplacetosafeguardCommunityDevelopmentBlockGrantdisasterrecoveryfunding,whichwasusedtorepairandreplacepublichousingunitsinnewOrleansandelsewhere.Thereviewwillalsodeterminewhethercostsandexpensesareproperanddocumented.

HUDisconductinganongoingreviewofallcontractsawardedtotheHousingAuthorityofnewOrleanspost-Katrinaandoftheauthority’shomeownershipprogram.

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New Orleans, LA, August 31, 2005—Members of the FEMA USAR (Urban Search and Rescue) task force remove residents from a nursing home affected by Hurricane Katrina. The entire city of New Orleans was being evaucated because of the floods caused by the breaks in the levees following Hurricane Katrina. (Jocelyn Augustino/FEMA photo)

Multifamily Properties TheOIGisreviewingHUDrecertificationandhousingassistancepaymentsproceduresforselectedmultifamilypropertieslocatedintheGulfCoast.TheOIGisalsoconductinganongoingreviewofSunlightManorApartmentscontractstorepairdamagefromHurricaneRitaandtheproperty’shousingassistancepaymentprocedurestoensuretheywereaccountedforproperly.

Mississippi Development AuthorityHUDwillconductareviewtodeterminewhethertheMississippiDevelopmentAuthority(MDA)oritscontractor(s)usedreportsdesignedtodetectfraudduringthehomeownerassistancegrantapplica-tionprocess.ThisisanongoingreviewofthehomeownerapplicationprocessusingreportssuppliedbyMDA’scontractor.Thesereportsidentifyhomeownerswhosubmittedmultipleapplicationsonthesamepropertyorformorethanoneproperty.

Hurricane Katrina Fraud Task Force—Louisiana State University ThisisanongoingreviewofcomplaintsreceivedbytheHurricaneKatrinaFraudTaskForcetodeter-minewhetheritwarrantsfurtherinvestigation.ItincludesananalysisofHUDSection8tenantsusingthenationalEmergencyManagementInformationSystem(nEMIS)todeterminewhichtenantsreceivedfundingthroughFEMA.

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Chalmette, LA, December 16, 2005—A free health clinic opened in a trailer for St. Bernard Parish residents located at the Super Wal-Mart parking lot on West Judge Perez Drive. The FEMA Disaster Medical Assistance Team (DMAT) and the U.S. Public Health Service provide the staffing of the facility. (Robert Kaufmann/FEMA photo)

United States Postal ServiceTheUnitedStatesPostalService(USPS)OfficeofInspectorGeneralcompletedtwoinspectionsduringthissemiannualreportingperiod.

Postal Inspection Service’s Procurement Transactions Related to Hurricane Katrina Response, Recovery, and Reconstruction Efforts (Report Number SA-AR-06-004, May 30, 2006)Overall,theUSPSandthePostalInspectionServicehadeffectivecontrolsoverprocurementtrans-actionsrelatedtoHurricaneKatrinaefforts.Procurementtransactionswerevalid,authorized,andsupportedbytheappropriatedocumentation.However,managementcouldstrengthencontrolstoensurethatholdersofInternationalMerchantPurchaseAuthorizationCards(IMPAC)review,sign,anddateU.S.bankstatementswithinfivedaysofreceiptasrequired.Managementagreedthatautho-rizingofficialswillensurethatallIMPACholdersreview,sign,anddateU.S.bankstatementswithinfivedaysofreceipt,asrequired.

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Postal Inspection Service Emergency Preparedness for Hurricane Katrina (Report Number SA-AR-06-005, June 5, 2006)ThePostalInspectionServicerespondedtoHurricaneKatrinarapidlyandsuccessfullyunderdifficultandunprecedentedcircumstances,takingactionsconsistentwiththeIntegratedEmergencyManage-mentPlan.Morethan300postalinspectorsandpostalpoliceofficersrespondedimmediatelytosafe-guardUSPSemployees,providesecurity,andensurethatinfrastructuresweresecureandoperational.

PostalInspectionServiceofficialsrequestedandobtainedright-of-wayauthorityfromFEMAtoensurethatinspectorscouldfullyconducttheirmission,whichincludedescortingfuelandotherrecovery-relatedgoods,suchaslightsandgenerators,intoAlabama,Louisiana,andMississippi.

Further,thePostalInspectionServiceinitiatedaneducationalcampaigntopreventfraudschemesrelatedtoHurricaneKatrinareliefefforts.ByimplementingtheIEMP,updatingpolicies,andprovidingICStraining,thePostalInspectionServiceenhanceditsemergencyplanandresponsetoHurricaneKatrina.norecommendationsweremade.

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InVestIGatIons


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New Orleans, LA, February 20, 2006—A FEMA Community Relations Specialist (R) assists a New Orleans Police Officer, residing on the Carnival Cruise Ship Ecstasy, in securing alternate housing. Disaster victims still housed on the ship have been assigned a FEMA representative to locate other venues to accommodate housing needs. (Robert Kaufmann/FEMA photo)

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Sincethehurricanereliefandrecoveryprocesswasinitiated,throughSeptember30,2006,the22federalIGsinvolvedinhurricanerecoveryoversighthavereported439indictments,407arrests,and255convictions.ThisisasignificantincreaseoverthefiguresreportedsixmonthsearlieronMarch31,2006,whentheyreported174indictments,152arrests,and48convictions.Therealsohavebeen22,647contactstoallofthevarioushotlines,anadditionof8,262contactstothe14,385hotlinecontactstotalreportedduringthefirstsixmonths.(SeeTable4-1onthenextpage.)

depArtmentAl inveStigAtive cASe SummArieSThefollowingcasesummariesrepresentinvestigationsreportedbythefederalIGsinvolvedinhurricanerecoveryoversight.

Department of Homeland SecurityDHSOIGOfficeofInvestigationsinvestigatorscontinuetobeactiveparticipantsontheDepartmentofJustice(DOJ)Hurri-

Federal Inspectors General (IGs) are

investigating potential violations of law

related to hurricane recovery efforts in

the Gulf Coast region. Where concerns

arise, criminal investigators determine

whether a law has been violated. As

members of the President’s Council on

Integrity and Efficiency (PCIE) and Exec-

utive Council on Integrity and Efficiency

(ECIE), federal IGs submit monthly

reports to DHS Office of Inspector Gen-

eral (OIG) with case summaries about

their investigations.

Investigative teams have been

deployed to each of the Federal

Emergency Management Agency

(FEMA) Joint Field Offices in Alabama,

Mississippi, Louisiana, Texas, and Flor-

ida to investigate allegations of fraud,

waste, and abuse. The investigators

are coordinating with their respective,

federal, state, and local law enforce-

ment agencies and prosecutors as part

of their fraud detection and protection

initiatives and investigations.

investigations

New Orleans, LA—Department of Justice officials arrived in New Orleans to meet with local law enforcement officials to create a bureau for violent crime being funded by FEMA. (Marvin Nauman/FEMA photo)

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oig inveStigAtionS StAtiSticS

Agency

Cases

Opened

(2)

1st 180 days

(3)

Cases

Opened

(2)

1st 360

days

Arrests

1st 180

days

Arrests

1st 360 days

Indictments

1st 180 days

Indictments

1st 360 days

Convictions

1st 180 days

Convictions

1st 360 days

Hotline

Contacts

1st 180

days

Hotline

Contacts

1st 360 days

CnCS - 1 - - - - - - - 1

DHS 466 1,239 117 315 140 338 40 203 4,533 12,711

DOC - 1 - - - - - - 1 2

DOD(1) 6 8 1 1 - - 2 2 9,664 9,664

DOE - - - - - - - - 2 2

DOI 1 1 - - - - - - - -

DOJ 6 8 - 1 - 1 - - - -

DOL 206 260 14 28 13 39 1 24 10 14

DOT 10 18 2 4 3 3 1 1 1 1

ED - 1 - - - - - - - 1

EPA 6 9 0 - - - - - 6 9

GSA 2 3 - - - - - - - -

HHS 17 17 - - - - - - 2 6

HUD 18 83 6 11 5 10 2 3 81 126

nASA 11 11 5 5 1 2 - - - -

SBA 3 12 - 7 - 8 - 2 12 19

SSA 17 55 4 25 9 28 1 15 22 29

TIGTA 2 3 1 1 1 1 - 1 - -

TREAS - 3 - 2 - 2 - 2 - -

USDA 11 16 2 7 2 7 1 2 1 6

USPS 3 7 - - - - - - 50 56

VA - - - - - - - - - -

Total 785 1,756 152 407 174 439 48 255 14,385 22.647

Source: 11th PCIE Hurricane Katrina Report (as of September 30, 2006)

Note 1: DoD hotline contact numbers represent the Katrina Fraud Hotline contacts reported through March 2006, when the Hotline was transferred to DOJ management. Katrina Fraud Hotline numbers are found under DHS reporting. All other agency numbers represent their individual hotline operation.Note 2: These Open Cases numbers reflect some joint investigations in which several OIGs are participating in the same case. See more information on non-OIG cases managed by the Hurricane Katrina Fraud Task Force at: htttp://www.usdoj.gov/katrina/Katrina_Fraud/docs/09-12-06AGprogressrpt.pdfNote 3: 180-day data is from the 9th PCIE Hurricane Katrina Report (as of March 30, 2006). Also, these numbers reflect fraud and non-fraud case information or complaints, such as benefits, eligibility, etc.

table 4-1

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caneKatrinaFraudTaskForceestablishedbytheU.S.AttorneyGeneralonSeptember8,2005.AsaresultofhurricanesKatrinaandRita,theOIGhasestablishedofficesinBatonRouge,Louisiana;Biloxi,Mississippi;Mobile,Alabama;andHattiesburg,Mississippi.Theseofficesarestaffedprimarilywithtemporaryinvestigatorswhoareacadreofon-responseordisasterassistanceemployees. Duringthis6-monthreportingperiod,DHSOfficeofInvestigationsconducted466investigations,whichresultedin140indictments,117arrests,and40convictions.ThefollowingarerepresentativeKatrina-relatedcasesummariesinitiatedthroughtheHurricaneFraudHotlineandothersources.

False Claims Involving Debris Removal ThisisajointlymanagedcasewiththeFederalBureauofInvestigation(FBI)involvingfourindividualswhoparticipatedinaschemetofilefalsedocumentationclaimingtruckloadsofdebristhatdidnotexist.Threeofthesubjectsworkedforacontractorwhowashiredtoperformworkasthecounty’smonitorforthedebrisremovaloperationsthroughoutthecounty.Oneoftheirprimaryresponsibilitieswastodocumentandapprovetruckloadsofdebristhatwerehauledanddisposedof.Thefourthindi-vidualwasasubcontractorwhohadtrucksinvolvedinthedebriscleanup.Theinvestigationrevealedthatthemonitorssubmittedfalsedumpticketsinthesubcontractor’sname,thesubcontractorreceivedpaymentsforthesefalseloads,andtheproceedsweresplitbetweentheindividuals.Thetotalamountofthefraudisinexcessof$717,000.AFederalGrandJuryindictedeachofthefoursubjectsononecountofTitle18USC§1001,(False Statements)andonecountofTitle18USC§371,(Conspiracy).Threeofthefoursubjectshavebeenarrestedandnotrialdatehasbeenscheduled.

Guilty Plea in $100,000 FEMA Hurricane Relief Fund Fraud Scheme TheDHSOIG’sinvestigation,whichwasconductedjointlywiththeU.S.SecretService,U.S.PostalInspectionService(USPIS),andDepartmentoftheTreasuryOIG,determinedthatbetweenSeptemberandDecember2005,thesubjectappliedforemergencyFEMAfundsinconnectionwithhurricanesKatrinaandRita,usingthenames,birthdates,andSocialSecuritynumbers(SSns)ofotherindividuals.Asaresultofthescheme,FEMAmailed38U.S.Treasurychecks,madeouttotheindividualsthesubjectidentified,tothesubject’smotelorprivatemailboxesthatherented.Thesubjectthenforgedthesignaturesofthepayeesanddepositedthechecksintobankaccountsthathehadopenedinthenamesofotherpeople.OnAugust28,2006,thesubjectpleadedguiltytoathree-countinformation,chargingviolationsof18U.S.C.§1344(Bank Fraud),18U.S.C.§1341(Mail Fraud),and18U.S.C.§1957(Money Laundering).SentencingisscheduledforDecember1,2006.

Three Indicted for FEMA Hurricane Relief FraudTheOIGconductedaninvestigationinvolvingsuspectswhodevisedaschemetodefraudFEMAbymisrepresentingthemselvesasevacueesfromHurricaneKatrina.ThefalsestatementsresultedinFEMApayingout$33,432infalseclaims.OnAugust30,2006,astategrandjuryindictedthreesuspectsforastateviolationofSecuringandExecutingaDocumentbyDeception.

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Hotel Owner Charged With Defrauding FEMA—Update AjointinvestigationwiththeU.S.SecretServiceresultedina39-countindictmentagainsttheownerofahotelwith22countsof18U.S.C.§1343(Wire Fraud)and17countsoffilingfalseclaimsunder18U.S.C.§287(False Claims).Theownerwasarrestedandreleasedona$75,000bond.Theownerisaccusedofwirefraudandfilingfalseclaimstotalingatleast$232,000inconnectionwiththedisasterrelieflodgingprogramsforhurricaneevacueesfundedbyFEMA’sPublicAssistanceProgram.AFederalMagistrateconcluded,baseduponthetestimonyofacourt-appointedpsychiatristatahearing,thatthedefendantwascurrentlyincompetenttostandtrial.

Two Temporary FEMA Employees Arrested—Update AjointinvestigationwiththeFBIresultedinthearrestoftwotemporaryFEMAemployeesunder18U.S.C.§201(Bribery of Public Officials and Witnesses)forsolicitingbribesfromacontractorsupplyingfoodforresidentsdisplacedbyHurricaneKatrina.BothranaFEMAcampnearnewOrleansandaskedfora$20,000bribeinexchangeforinflatingthecateringcontract.

ThetwoemployeespleadedguiltyandonAugust30,2006,thefirstsubjectreceived21monthsinprison,2yearsprobation,anda$30,000fine;andthesecondsubjectreceived21monthsinprison,2yearsprobation,anda$20,000fine.

Texas Residents Arrested for FEMA Katrina Fraud—Update AjointinvestigationwiththeDepartmentofLabor(DOL)OIG,theU.S.PostalService,andtheLouisianaDepartmentofLaborhasresultedinthearrestofnumerousTexasresidentsunder18U.S.C.§641(Theft of Public Money)forstealingmorethan$80,000inFEMAfundsbyfilingfalseclaims.OneresidentdevisedaschemetoimpersonatehurricaneevacueesanddefraudFEMAoutofthou-sandsofdollars.ShefiledthefraudulentclaimswithFEMAandtheLouisianaDepartmentofLaborusingtheidentities,includingnamesandSSns,ofotherpeople,manyofthemwithasimilarsurnameashers,withouttheirconsent.Co-conspiratorswerearrestedonconspiracychargestodefraudtheUnitedStates.BetweenJune1,2006,andJune26,2006,12subjectspleadedguiltyandareawaitingsentencing.

Subject Sentenced for Defrauding FEMA—UpdateTheDHSOIGjointinvestigationwiththeDOLOIGrevealedthatasubjectfiledforandreceivedmorethan$70,000fromFEMAthatthesubjectwasnotentitledtoreceive.Thesubjectwasadrugdealerwhopurchasedindividuals’biographicalinformationinexchangefordrugs.ThesubjectthenusedtheirinformationtofileclaimsforassistancethroughFEMAandtheLouisianaDisasterUnem-ploymentSystem.Thesubjectpleadedguiltytoviolating18U.S.C.§371(Conspiracy)and18U.S.C.§1708(Conspiracy to Commit Wire Fraud),andwassentencedto27monthsconfinement,$17,836restitution,and3yearssupervisedrelease.(The original arrest in this case was reported in the earlier reporting period—October 1, 2005 - March 31, 2006.)

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Fugitive Pleads Guilty to Filing False Claim for Disaster Assistance TheOIGdisclosedthatthesubject,afugitivewhowasbeingsoughtbytheU.S.MarshalsServiceonafederalwarrantforviolatingthetermsofhissupervisedrelease,filedafalseclaimforHurricaneRitadisasterassistance.ThesubjectclaimedthathelivedatanaddressinBeaumont,Texas,duringthehurricanewhen,infact,thesubjectwasonfederalprobationinHouston,Texas.Asaresultofhisfalseclaim,thesubjectreceivedaFEMAregistrationnumberandstayedinFEMA-fundedhotelswhilebeingsoughtbytheU.S.MarshalsService.ThesubjectwasarrestedbytheU.S.MarshalsServiceinnorthCarolinaandreturnedtoHouston,Texas.Thesubjectpleadedguiltytoviolatingonecountof18U.S.C.§287(Filing a False Claim).

Subjects Charged with Filing Multiple False Claims for FEMA Assistance TheOIGinvestigationsstaffconductedajointinvestigationwiththeUSPIS,SocialSecurityAdmin-istration(SSA)OIG,andtheSmallBusinessAdministration(SBA)OIG,involvingtwosubjectswhofraudulentlyobtainedmorethan$48,000indisasterassistancebenefitsbyfiling39separateapplica-tions,claimingtohavesuffereddamagesfromhurricanesKatrinaandRita.Followingtheirindictmentforviolating24countsof18U.S.C.§1341(Mail Fraud)andsixcountsof18U.S.C.§1028A(Aggra-vated Identity Theft),thesubjectswerearrestedwithoutincident.

Fourteen Charged with FEMA Fraud TheDHSOIGOfficeofInvestigationsconductedaninvestigationandreportedthat14subjectsinLosAngelesusedfraudulentaddressesandSSnstoobtainFEMAbenefitstowhichtheywerenotenti-tledfollowingHurricaneKatrina.Specifically,eachoftheseindividualsfraudulentlyclaimedtohaveresidedinAbitaSprings,Louisiana,whenHurricaneKatrinastruckinAugust2005,whentheyactuallyresidedinLosAngeles.These14subjectsreceived19FEMAcheckstotaling$38,716.TheLosAngelesCityAttorneychargedthese14LosAngelesresidentswithGrandTheft,aviolationoftheCaliforniaPenalCode.TwelveoftheseindividualswerealsochargedwithConspiracy.Todate,11individualshavepleadedguilty.Sentenceshaveincludedupto30daysinjail,restitution,andcommunityservice.

Four Indicted for FEMA Hurricane Relief FraudTheOIGconductedajointinvestigationwiththeU.S.SecretService(USSS)targetingfoursubjectswhoknowinglydevisedaschemetodefraudFEMAbymisrepresentingthemselvesasevacueesfromHurricaneKatrina.TheirfalsestatementsresultedinFEMApayingout$20,425infalseclaims.OnMarch1,2006,afederalgrandjuryindictedthefoursubjectsforviolationsof18U.S.C.§1343(Wire Fraud), 18U.S.C.§1341(Mail Fraud),and18U.S.C.§641(Theft of Government Property).OnMarch3,2006,thesubjectswerearrestedpursuanttotheindictments.Threesubjectspleadedguiltytoonecountof18U.S.C.§1343(Wire Fraud)andtheothersubjectpleadedguiltytoonecountof18U.S.C.§641(Theft of Government Property).Sentencingispending.

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Eleven Indicted for FEMA Hurricane Relief FraudTheDHSOIGinvestigationsstaffconductedajointinvestigationwiththeFBIandtheUnitedStatesPostalInspectionsService(USPIS)thatidentifiednumeroussubjectsresidinginOregonwhofiledfraudulentFEMAdisasterbenefitapplicationsfollowingHurricaneKatrina.Todate,theOfficeofInvestigationshasidentified11subjectsinOregonwhowereresponsibleforfiling253fraudulentHurricaneKatrinaapplicationswithFEMA,totaling$470,406inclaims.OnOctober12,2005,andonJanuary27,2006,the11subjectswereindictedandarrestedforviolationof18U.S.C.§641(Theft of Government Property).Todate,eightsuspectshavepleadedguiltytoonecountof18U.S.C.§641(Theft of Government Property)andtwosuspectshavepleadedguiltytoatotalofsixcountsof18U.S.C.§1341(Mail Fraud).ninesuspectshavebeensentencedtoatotalof63monthsconfinement,27yearsprobation,$800infines,and$441,184inrestitution.Onesuspectisawaitingsentencingandonesuspectisstillatlarge.

One Indicted for FEMA Hurricane Relief FraudTheDHSOIGconductedajointinvestigationwiththeDOLOIG,HousingandUrbanDevelopmentOIG,SocialSecurityOIG,LasVegasMetroPoliceDepartment,theUSSS,andtheUSPIS,whichidentifiedapproximately800suspectedfraudulentFEMAapplicantsresidingintheLasVegasMetro-politanArea.Todate,theinvestigationhasidentifiedapproximately50subjectswhowereresponsibleforfilingfraudulentHurricaneKatrinaapplicationswithFEMA,totalingapproximately$264,000inclaims.OnJune5,2006,asubjectwasindictedandarrestedforviolationof18U.S.C.§287(False Claims)forparticipatinginaschemetodefraudFEMAbyobtaininghotelroomsclaimingtohavebeenavictimofHurricaneKatrina,andre-rentingtheroomsforthepurposesofnarcoticstransactionsandprostitution.

Applicant Filed Numerous False Disaster Assistance Claims TheDHSOIG’sinvestigationdisclosedthatasubjectfiled30claimsfordisasterassistanceusingaddressesinnewOrleans,Louisiana;Pascagoula,Mississippi;Biloxi,Mississippi;andtwolocationsinAlabama.ThesubjectuseddifferentSSnsanddifferentspellingsofthefirstandlastnamesontheseclaims.Morethan$277,000waspaidindisasterassistance.Asearchwarrantwasconductedonthesubject’sresidenceandthemajorityofthehomefurnishingswereseized.Inaddition,numerousprop-erties,includingland,wereseized.AFederalGrandJuryindictedthesubjecton66countsoffraudagainstthegovernment.Thejudgeorderedthedefendantbedetainedincustodypendingtrial.

Multiple Applicants Filed Numerous False Disaster Assistance Claims ThiswasajointinvestigationwiththeUSSSandUSPISwhereDHSOIGconductednumerousinves-tigationsintofraudulentdisasterassistanceclaimsinFlorida.Theschemeinvolvedafewindividualsactingas“brokers”byfilingclaimsforfamily,friends,andassociates,andinsomecasesreceivinga

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portionofthedisasterfundsasacommissionorfeeforfilingtheclaim.TheapplicantswouldusefalseSSnsandfalsedamagedaddresses,usuallyinthenewOrleans,Louisiana,areaandvariousloca-tionsineastTexas.TheseclaimswerefiledforhurricanesKatrinaandRita.The25individualswhoweresubsequentlyindictedandarresteddidnotliveinLouisianaorTexaswhenthehurricanesmadelandfall.Thetotallosstothegovernmentasaresultofthesefalseclaimswasapproximately$206,000.Allbutonesubjecthaveenteredguiltypleasandnotrialdatehasbeenscheduledforthelonesubjectawaitingtrial.

Applicant Filed False Disaster Assistance Claims TheDHSOIG’sinvestigationdisclosedthatasubjecthadfiledaclaimfordisasterassistanceclaimingtohaveaprimaryresidenceinGulfport,Mississippi,wheninfacttheindividualwasapermanentresi-dentinnewYorkCity.Thesubjectreceived$6,324inindividualassistanceand$26,000waspaidbyFEMAforhotelroomsoccupiedbythesubject.ThesubjectwasindictedbyastateDistrictAttorney’sOfficeontwocountsofgrandlarcenyinthethirddegree,twocountsofgrandlarcenyinthefourthdegree,andonecountofOfferingaFalseInstrumentinthefirstdegree.Thesubjectisawaitingtrial.

Department of DefenseAsofSeptember30,2006,theDefenseCriminalInvestigativeService(DCIS),thecriminalinvestiga-tivearmoftheDepartmentofDefenseOIG,hasreceived22criminalallegationsrelatedtohurricanesKatrinaandRita.DCISwasstillexaminingthreeallegationsasofOctober1,2006.DCISagentshavealsoexaminedfiveallegationsconcerningMealsReady-to-Eat,whichwerereferredbytheGovern-mentAccountabilityOffice.TheseallegationsweredeterminedtobeunrelatedtoHurricaneKatrina.Inaddition,DCIShasopenedeightcasesdealingwithbribery,kickbacks,falseclaims,andpossibleproductsubstitution.Oneoftheopencaseshasresultedinasuccessfuljudicialaction.

Bribery Case AdjudicatedOnJune28,2006,twoindividualswereeachsentencedtoserve12monthsinprisonandpaya$5,000fine,followedbyatwo-yeartermofsupervisedrelease.BothindividualshadpreviouslypledguiltytoconspiringtocommitbriberyinvolvingdebrisremovalinPerryCounty,Mississippi.OnesubjectworkedasaQualityAssurancerepresentativefortheU.S.ArmyCorpsofEngineers(USACE).Heacceptedcashbribesinexchangeforcreatingfalseloadsthatthesecondsubject,acontractorrespon-siblefordebrisremovalinMississippipost-Katrina,didnothaulordump.DCIScollaboratedwiththeFBIandtheU.S.ArmyCriminalInvestigationCommandonthiscase.

Department of JusticeTheOfficeofInspectorGeneralInvestigationsDivisionopenedtwocasesduringthe180-dayreportingperiod.AsofSeptember30,2006,theInvestigationsDivisionhadopenedeightcasesconcerning

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hurricane-relatedbenefitfraud.OneinvestigationhasresultedintheindictmentofaFederalBureauofPrisonsseniorcorrectionalofficeronchargesthathefalselyclaimedtobeavictimofHurricaneKatrina,receivingmorethan$30,000indisasterreliefbenefits.

ThreeothercaseshavebeenreferredtotheappropriateU.S.Attorney’sOffices.Onehasbeendeclinedandtheothertwocasesarependingaprosecutiondisposition.

Oftheremainingfourcases,onecontinuestobeunderinvestigation bytheDOJOIG.Theotherthreewereeitherdeclinedforprosecution,andthenforwardedforadministrativeaction,orthecasewasclosedbecausetheallegationswerenotsubstantiated.

Hurricane Katrina Fraud Task Force ThenationwideHurricaneKatrinaFraudTaskForceisbasedinWashington,DC,andoperatesfromacommandcenterinBatonRouge,Louisiana.ThenumbersinFigure4-1belowrepresentalllawenforcementprosecutions,includingDOJ,FBI,DHSOIG,andstateandlocalstatistics.

Themosttangibleproofoftheircommitmentisthedramaticincreaseinthenumberofprosecu-tionsstemmingfromhurricanesKatrinaandRita.AsofOctober17,2005,thedateofthefirstprogressreport,thetaskforcehadcharged36peoplein17separatecaseswithhurricane-relatedfraud.AsofSeptember6,2006,morethan400peoplehavebeenfederallychargedwithhurricane-relatedfraud.

New Orleans, LA—FCO/PFO Vice Admiral Thad Allen and FEMA Deputy Director of Gulf Coast Recovery Gil Jamieson address members of the DOJ Task Force at the New Orleans FEMA Area Field Office. (Marvin Nauman/FEMA photo)

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FederAl criminAl proSecutionS, 2005, hurricAne-relAted(9/1/05-9/6/06)

Source: U.S. Department of JusticeNote: Totals represent 412 persons charged in 30 districts.

Figure 4-1

Department of LaborTheDOLOIGisplayingasignificantroleinmonitoringactivitiesintheaffectedarea.TheOfficeofInvestigationscontinuestoinvestigatefraudinvolvingtheUnemploymentInsurance(UI)andDisasterUnemploymentAssistance(DUA)programs.Todate,39individualshavebeenindictedonfraudchargesasaresultoftheIG’sinvestigativework.TheOffice continuestoreceivereferralsfromHurri-caneKatrinaFraudTaskForcememberagenciesassignedtothePCIE/ECIEHotline.

TheOfficeinitiatedseveralsignificantenforcementactionsduringthisreportingperiod.Threecasesofdisasterassistancefraudaresummarizedbelow.

Bayou Abatement: Labor Leasing Company Owner Charged with Using $1.4 Million in Unpaid Employment Taxes for Cars, Boat, Swimmng Pool, and Other Personal Expenses TheownerofanIndiana-basedlaborleasingcompanywaschargedAugust8,2006,withmailfraudandfailuretoaccountforandremitemployeewithholdingtaxes.Thechargeswererelatedtothecompany’sdisasterreconstructionworkinvolvingreconstructioncontractsforhurricanesFrancisandKatrina.Intheallegedscheme,employeeswerehiredtotraveltoFlorida.Thecompanypaidthe

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employeeshourlywagesandpurportedtowithholdtheirincomeandSocialSecuritytaxes.Theownerallegedlywithheldthetaxes,butdidnotaccountforandpaythefederaltaxestotheInternalRevenueService.ThecompanywasalsorequiredtopayunemploymentcompensationtaxesandestablishanunemploymentcompensationaccountwiththestateofIndiana.Theownerischargedwithneitherregisteringwiththestate,norpayingintoanunemploymentcompensationfund.

Thechargesfurtherallegethattheownerspentthe$1.4million—thatshouldhavebeenpaidtostateandfederalagencies—onpersonalexpenses,includingmortgagepayments,automobiles,aboat,aswimmingpool,homeimprovements,andjewelry.Thisisajointinvestigationthatincludesthecoop-erationoffederalandIndianaagencies.

Former Contractor Pleads Guilty to Defrauding Disaster Assistance Program (Ref: U.S. v. Wayne P. Lawless; Middle District, Louisiana)WaynePeterLawless,aformercontractorfortheLouisiananationalGuardattheBatonRougeCareerandJobCenter,pledguiltyJuly17,2006,toextortionundercoverofofficialrightforhisroleinthefilingofapproximately80falseandfraudulentDUAandUIassistanceclaimsrelatedtoHurri-caneKatrinareliefpayments.LawlesshelpedfileandprocessDUAandUIclaimsforpeopleheknewwerenotqualifiedtoreceivethisassistance.Asaresult,debitcardstotalingmorethan$141,942weremailedtoclaimantsataddressesprovidedbyanaccomplice.

Eachfalseclaimhadthepotentialtocollect$3,822infraudulentbenefitsforatotalof$305,760.TheSocialSecurityAdministration(SSA)OIG,PostalInspectionService,andtheFBIconductedthisjointinvestigation.

Man Pleads Guilty to Disaster Assistance Fraud (Ref: U.S. v. Dee Jay Frazier; Middle District, Louisiana) DeeJayFrazierpledguiltyJuly6,2006,toFalseUseofSocialSecuritynumbersforhisschemetoobtainLouisianaDUAdebitcards.Frazierfraudulentlysubmitted11differentclaimsforLoui-sianaDUAusingvariousnamesandSSns.DUAdebitcardsweremailedtoFrazieratfourdifferentaddressesinDenver,Colorado.Whenhewasarrested,29weeksofDUAbenefitshadbeenloadedoneachofthe11cards,resultinginatotallossofapproximately$28,420.Frazierfacesamaximumpunishmentoftenyearsimprisonment,afineof$500,000,orboth.TheSSAconductedthisjointinvestigationwithDOLinvestigators.

Department of TransportationOnefull-timeinvestigatorwasdetailedtotheHurricaneKatrinaFraudTaskForceandtheFBI’sPublicCorruptionTaskForceduringthissemi-annualreportingperiod.TheDepartmentofTransportation(DOT)OfficeofInvestigationssummarizedinformationforthetaskforceinvolvingapproximately75hurricane-relatedacquisitioncontractsmonitoredbytheDOT’sseniorprocurementexecutive.Thisinformationwillbeanalyzedtoidentifypotentialfraudulentactivity.Forexample,datawillbe

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comparedtofilingsfromfinancialinstitutionstoleadsforpossibleprocurement-relatedfraudandcorruption.TheinformationwasalsoforwardedtotheDOLforcross-checkingagainstFederalInsur-anceContributionsAct(FICA)andotherwithholdingsdatabasestoidentifypossibleorganizedcrimeactivities.

Bus Company Owner ArrestedTheOIG’sinvestigationresultedintheindictmentandarrestoftheownerofGlobalLimo,whichoperatedabusthatcaughtfirewhileevacuatingresidentsofaHouston-areanursinghomeinadvanceofHurricaneRita.Twenty-threeelderlypassengersdiedinthefire.ThecompanywassubsequentlyorderedoutofserviceafteraninspectionbytheFederalMotorCarrierSafetyAdministration(FMCSA)andhassinceceasedoperations.AsaresultofOIG’sinvestigation,boththecompanyanditsownerwereindictedintheSouthernDistrictofTexaswithonecountofconspiracytomakefalsestatements(18U.S.C.§371)andtwocountsofviolatingFMCSAregulations(49U.S.C.§521(b)(6)).OIagentsarrestedthecompanyownerathisresidenceinMcAllen,Texas.Heenteredapleaofnotguiltyandwasreleasedona$75,000signaturebond.

Department of EducationTheOIhasanongoinginvestigationconcerningthepossiblemisuseofrecoveryfundsonconstructioncontracts.Atthistime,thepotentiallossinthismatterhasnotbeendetermined.

Environmental Protection AgencySinceSeptember2005,theOIG’sOfficeofInvestigationshasdeployedsixspecialagentsonseveralmissionstotheaffectedGulfStatestomeetwithappropriateauthorities.EnvironmentalProtectionAgency(EPA)agentsfromEPARegion6havecontinuedtoworkcloselywiththeHurricaneKatrinaFraudTaskForce,learningthetaskforcedatabaseprotocolandcapabilities,andmeetingwithEPARegion6procurementstaffduringseveralongoinginvestigations.

TheOIGhasthreeopeninvestigations,anditclosedsixinvestigationswithanadministrativeaction,duringthisreportingperiod.

TheEPAismanagingthreeopencases,whichinvolvepotentialfalseclaims,fraud,anduseofnon-certifiedmaterials.

ThefollowingcasesthatinvolvetheEPAhavebeenclosed,including:• AwomanallegedlyclaimedtobeanEPArepresentativeassheapproachedcitizensandtookenvi-

ronmentalsamplesinthenewOrleansarea,whennoEPAemployeeswereassignedforsuchactivi-tiesinthatarea.Thesubjectoftheinvestigationcouldnotbelocated.

• Abusinessoperatorseekingalandfillpermitallegedthatastateofficialsaidthatthebusinesswouldnotgetapermituntilitmadeapaymentorarrangedforsometypeofbusinessownership.Theallegationwasunsubstantiated.

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• AcontractorfalselyclaimedtohaveapprovalfromanEPAon-scenecoordinatortobegincleanupandrescueoperationsinnewOrleans.Althoughtheallegationsweresubstantiated,thecontractorusedtheapprovalonlytoenterdesignateddisasterareas;noEPA-appropriatedfundingwaspaidtohim.ACeaseandDesistOrderwasissuedtothecontractor.

• TheEPAIGinvestigatedallegationsthatanEPAofficialhadinappropriatelyinfluencedtheawardofanEPAcontractinnewOrleans.Theallegationsweredeterminedtobeunfounded.

• TheEPAIGinvestigatedallegationsthatacontractemployeesubmittedfalseclaimsonEPAcontractsbyworkingandchargingtimefordifferentcleanupcontractorsonthesamedate.The“contractemployee”wasactuallytwodifferentindividualswhohappenedtosharethesamename,eachworkingforadifferentcontractor.nodoublebillingoccurred.

• AnEPAcontractorallegedlychargedlaborhoursbeyondthoseworkedbyitsemployees,andthecontractorchargedforequipmentnotusedinthecleanupeffortforJackson,Mississippi,andMobile,Alabama.ThesecostswerenotbilledtotheEPA,withtheexceptionofanoverpaymentintheamount$1,877,whichwasbeingadjustedthroughadministrativeprocedures.

General Services AdministrationTheOfficeofInvestigationsreceivedfourcontractfraudallegationsrelatingtohurricanesKatrinaandRitaprocurementactivities.ThreeinvestigationshavebeenopenedinvolvingprocurementcontractsbyGeneralServicesAdministration(GSA)contractingofficialsforFEMA.Asaresultoftwooftheseinvestigations,FEMAreceivedadministrativerecoveriesofapproximately$1.5millioninbillingerrorsbythecontractor.Inaddition,acivilcomplainthasbeenfiled,andapproximately$1.4millionhasbeengarnishedfromthecontractor.Thethirdinvestigationisstillunderway.

TheOfficealsohasparticipatedintheHurricaneKatrinaFraudTaskForcesincenovember2005.OnbehalfofFEMA,GSAcontractingofficershaveprovidedthetaskforcewithinformationaboutcontractsthatwereeitherGSAcontractsorfacilitatedbytheGSA.

The Department of Health and Human ServicesTheOIGOfficeofInvestigationscurrentlyhas11openinvestigationsthatinvolveallegationsofhealthcarefraud,poorqualityofcare,andpatientabandonment.TheofficeisassistingtheLouisianaMedicaidFraudControlUnitininvestigatingcircumstancessurroundingnursinghomedeaths.AsaparticipantinHurricaneKatrinaFraudTaskForcemeetings,theOfficeisalsostartingtoreceiveandprocesscomplaintsthatariseatmeetings.

Department of Housing and Urban DevelopmentTheOfficeofInvestigationsopened66casesduringtheperiodendingSeptember30,2006,whichresultedinfiveindictmentsandfourarrests.ThroughitsactiveparticipationintheHurricaneKatrinaFraudTaskForce,DepartmentofHousingandUrbanDevelopment(HUD)OIGcollaboratedwith

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otherfederaldepartmentsandagenciestojointlyaddressallegationsoffraudandpubliccorruption.ExamplesofHUDinvestigationsincludethefollowing:

• ATexaspublichousingtenantwasindictedandarrestedafteraHousingAuthorityemployeereportedthatthetenantwasallegedlyineligiblefortheKatrinaDisasterHousingAssistanceProgram,becauseshehadaleaseforaresidenceinTexaswhenHurricaneKatrinahitthestateofLouisiana.

• AnIllinoiswomanwasindictedandarrestedafterapplyingtoreceivedisasterreliefbenefits,alleg-edlyclaimingtobehomelessandthathertwochildrenhaddiedasaresultofHurricaneKatrina.ThewomanlivedinIllinoisanddidnothavetwochildrenatthetimeofthehurricane.Inaddition,sheallegedlyfailedtoreportherhusband’sincomeasrequiredonherapplicationforrentalassis-tanceinIllinois.

• ALouisianaSection8tenantwasindictedandarrestedforallegedlyclaimingtheeffectsofHurri-caneKatrinadamagedherpersonalpropertyandasaresultsheneededtoevacuateherhome.AninspectionoftheFederalHousingAdministration(FHA)-insuredapartmentcomplexwherethewomanlivedrevealedneitherstructuraldamagenorevidencethattenantswereforcedtoevacuate.

• AMississippiwomanwasindictedforallegedlyfalsifyingherFEMAapplicationwithaGulfport,Mississippi,addresswhenshelivedelsewhereinSection8housing.

• ATexasindividualwasindictedandarrestedforallegedlyclaimingtobeahurricanevictimtoreceiverentalassistancebenefits.

U.S. Small Business Administration MostcasesarebeingcoordinatedwithajointtaskforcecomposedofmultipleagenciesandledbytheDHSOIG.TheSmallBusinessAdministration(SBA)OIG,inconjunctionwiththistaskforce,hasreviewedthefollowingallegations:• Unauthorizeduseofloanproceeds• Overstatementoffinancialloss• Falsestatementsaboutpriorcriminalrecordsandfinancialliabilities.

TheSBAisalsoinvestigatingborrowerswhoallegedlyfiledapplicationsforresidentialrepairseventhoughtheyresidedinlocationsnotaffectedbytheGulfCoasthurricanes.

Workingwithotherlawenforcementagencies,theSBAhasassistedinobtainingeightindictmentsandtwopleas.Ithas11opencasesinvariousstagesofdevelopment.

Asmoreloansaredisbursedandthe12-monthdefermentofprincipalandinterestpaymentsformanydisasterloanscomestoanend,theSBAanticipatesthatfraudcommittedagainsttheSBADisasterLoanprogramwillincreaseintheGulfCoastregion.

TheOfficecontinuestoseekpotentialviolatorsbyconductingcriminalhistorychecksonastatis-ticalsampleofloanstoensurecompliancewiththeSBA’spolicyofdenyingassistancetothoseofpoorcharacter.TheOfficealsousesSBAdisasterdatabasestodevelopinformationaboutpotentialduplicatepayments,aswellasotherpatternsoffraud.Inaddition,theofficewillworkwiththeHUDOIGto

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determineandpreventduplicatepaymentsforborrowerswhohavebeenapprovedforSBAloans,butwhohavealsoreceivedCommunityDevelopmentBlockGrantmoneyintheGulfCoastregion.

U.S. Social Security Administration TheOIGreceivedatotalof34allegationsofpotentialfraudrelatingtohurricanesKatrinaandRitaduringtheperiodofApril1,2006,throughSeptember30,2006.Theallegationsarecategorizedas(1)SSnmisuse,whichincludesidentitytheft,falseclaims,andotherviolations,and(2)theftorfraudrelatedtoSocialSecuritybenefitprograms.Duringthisperiod,36investigationswereopened,and18casesclosed.Mostinvestigationsareworkedjointlywithotheragenciesorlocallawenforcement.

SSAOfficeofInvestigationshasbeenanactiveparticipantintheDOJHurricaneKatrinaFraudTaskForcesinceitwasestablishedbytheAttorneyGeneralinSeptember2005.

Investigativehighlightsinclude:• AstheresultofajointinvestigationbytheOfficewiththeGovernmentAccountabilityOffice

(GAO),DepartmentofHomelandSecurityOfficeofInspectorGeneral(DHSOIG),andtheUSPIS,anindividualwasarrestedintheDallasareaforviolationsrelatingtoidentitytheftandmailandwirefraud.InJune2006,afederalgrandjuryindictedthispersonforfraudulentlyobtainingmorethan$35,000indisasterassistancefundsfromFEMA.Accusedoffraudulentlyfiling15separateapplicationsfordisasterassistancefundsatlocationsthroughoutTexasandLouisiana,thisindividualuseddifferentaddresses,otherindividuals’SSns,andallegedlymadefalsestatementstoreceivehurricanesKatrinaandRitadisasterrelieffunds.

• Inasimilarcase,alsoajointinvestigationbySSA,GAO,DHSOIG,andUSPIS,federalagentsarrestedanindividualaftera22-countcriminalindictmentforviolationsrelatingtoidentitytheftandmailandwirefraud.Theindividualallegedlysubmitted18separateapplicationsthroughoutTexasandLouisianatoreceivehurricanedisasterassistancerelieffunds.InMay2006,theindi-vidualwasindictedbyafederalgrandjuryforfraudulentlyobtainingmorethan$36,000indisasterassistancefundsfromFEMA.

• AjointinvestigationbytheSSAwithDHSOIGandtheUSSSrevealedthataBatonRouge,Louisiana,couplefiledfraudulentFEMAapplicationsforhurricanedisasteraid.Usingtheirtruenames,theyprovidedfalsenewOrleansaddressesandSSns.Asaresult,thehusbandfraudu-lentlyobtained$4,000inFEMAdisasterfunds.Boththehusbandandwifewerecharged.Origi-nallychargedinamulti-countindictment,allchargesagainstthehusbandweredroppedunderapleaagreement,exceptforTitle18U.S.C.§287(Making False Claims).InAugust2006,hewassentencedtosixmonthshomeconfinementandfiveyearsprobation.HewasalsoorderedtopayFEMA$4,000inrestitutionandaspecialassessmentof$100tothecourt.

LosAngeleswasthesiteofseveraljointinvestigationsbetweenSSAOIGandDHSOIGtargetingLosAngelesarearesidentssuspectedofsubmittingfraudulentapplicationsforHurricaneKatrina

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disasterreliefbyclaimingresidencyinnewOrleansduringthehurricane,includingthesecases:• SevenindividualsmisusedSSnstofilefraudulentapplicationsfordisasterassistance.Each

receiveda$2,000FEMApayment.AllsevenpledguiltytograndtheftofFEMAfunds.InAugust2006,allsevenindividualsweresentencedto36months’probation,orderedtopayrestitutionof$2,000,andassessedafineof$220.Sixoftheseindividualswerealsorequiredtoperform15daysofcommunityservice.Theseventhpersonwassentencedto30daysofincarceration.

• TwopeoplefraudulentlyfiledFEMAapplicationsfordisasterassistance,receiveda$2,000FEMApayment,andfailedtonotifytheSSAofthepaymentsotheycontinuedtoreceiveSupplementalSecurityIncome(SSI)benefits.BothpledguiltytograndtheftofSSIandFEMAfunds,andinAugust2006theyweresentencedto36monthsprobationandassessedafineof$220.Inaddition,oneoftheindividualswasassigned15daysofcommunityserviceandorderedtopayrestitutionof$3,260;theotherpersonwasassigned150hoursofcommunityserviceandorderedtopayrestitu-tionof$2,812.

• AwomanfiledthreefalseFEMAapplicationsfordisasterreliefbymisusingtwoSSnsandreceived$6,000inFEMAfunds.SheenteredaguiltypleaforgrandtheftofFEMAfunds.InAugust2006shewassentencedto36monthsprobationand30daysofcommunityservice;shewasorderedtopayrestitutionof$6,000,andfined$220.

U.S. Department of the TreasuryDuringthesemi-annualperiod,theTreasuryOfficeofInvestigationshashadtwosignificantprosecutions.

AspartoftheU.S.AttorneyGeneral’sandthePCIE’santi-fraudcommitmenttocombathurricanesKatrinaandRitarelatedschemes,theTreasuryOIGparticipatedinajointinvestigationwiththeMetroAreaFraudTaskForce,theUSPIS,theUSSS,andtheDHSOIGofJeffreyRothschild.RothschildwasarrestedonJune27,2006,inElPaso,Texas,onchargesofidentificationdocumentfraud.Rothschildconfessedtocommittingapproximately$100,000inFEMAKatrina/Ritabenefitsfraud,$40,000to$50,000increditcardfraud,andanadditional$40,000inacheckkitingscheme,throughtheuseoffraudulentorcompromisedidentities.

OnAugust28,2006,JeffreyRothschildpledguiltyintheU.S.DistrictCourtfortheDistrictofColumbiatoathree-countinformationchargingbankfraud,mailfraud,andmoneylaunderingfromSeptembertoDecemberof2005,inconnectionwithaschemetodefraudFEMAofmorethan$100,000inrelieffundsintendedforvictimsofhurricanesKatrinaandRita.AllsuchfundingpaymentsaremadethroughtheDepartment’sFinancialManagementServicebureau.SentencingforRothschildisscheduledforDecember1,2006.Hefacesbetween84and105monthsinprisonunderthefederalsentencingguidelines.

TheOIGalsoparticipatedinacaseagainstaWashington,DCresident,CharlesWashington,formakingafalsestatementonaFEMAapplicationtoobtaindisasterrelieffromHurricaneKatrina.Washingtonfalselyclaimedthatherentedandwaslivingatasingle-familyresidenceinnewOrleans,

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Louisiana,duringHurricaneKatrinaandthathishomewasdamagedandthathelostpersonalprop-ertyasaresultofthehurricane,receivingthreeTreasurycheckstotaling$14,749.

WashingtonpledguiltyonJune13,2006,intheU.S.DistrictCourtfortheDistrictofColumbia,toafalsestatementcharge.Washingtonfacesamaximumoffiveyearsofimprisonment.

U.S. Department of Agriculture TheU.S.DepartmentofAgriculture(USDA)OIGrecentlyopenedaninvestigationintoanallegationoffarmprogramfraudrelatingtohurricanesKatrinaandRita.FutureresourceswillfocusonUSDAprogramfraudinvestigations.

OtherinvestigationsduringthisperiodoriginatedfromreferralsbytheU.S.Attorney’sOfficesinMississippiandLouisianaandtheHurricaneKatrinaFraudTaskForce.Mostofthecasesinvolvegovernmentbenefitfraudbyindividualswhosubmittedfalseclaimsormadefalsestatementstoobtainbenefitsfraudulently.

OnApril2006,amanwassentencedinPortland,Oregon,toserveonedayinprisonand36monthsofsupervisedrelease,andhewasorderedtopay$447inrestitutionanda$100specialassessment.ThemanhadsubmittedanapplicationtotheStateofLouisianaDepartmentofHumanServices,listinganewOrleansaddressashisresidence,andreceived$447indisasterfoodstampassistancefromSeptemberthroughnovember2005.However,hedidnotliveintheaffectedarea.InJanuary2006,anindividualpledguiltytomakingfalsestatementsonthefoodstampapplicationthatthemanhadsubmitted.

InJuly2006,a72-year-oldwomanpledguiltyinMississippitomakingfalseclaimstoFEMA.Thewoman;herdaughter,whowasinthestatepenitentiaryatthetime;andherdaughter’sboyfriend,whoresidedinadrugrehabilitationunit,wereallineligiblefortheapproximately$6,000inFEMAbenefitstheyreceived.Sentencingispending.

United States Postal Service (USPS)TheOfficeofInvestigationshasaddressedfouropenallegationsandisinvolvedwiththreeactiveinvestigations.Oftheseseveninvestigativeactivities,fiveoftheallegationsandcasesarerelatedtofraudcommittedbyUSPSemployeesintheaffectedareas.Thesecaseshavenotresultedinanysignifi-cantcriminal,civil,oradministrativeactions.TheUSPSalsoreceivedsixhotlinecontactsduringthisreportingperiod.

lessons leaRned


5

New Orleans, LA—A boat lifted off its trailer is marked as property by its owner months after the storm subsided. (SBA photo)

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“ThePCIEreviewhasadifferentpurpose,”hesaid.“Atthisstage,thelessonslearnedandissuesidentifiedregardingthefederalresponsetothe2005stormscanbeevaluatednowwiththerigorsofcompletedaudits,inspections,andformalinvestigations.Thiswillprovidepolicymakersandgovernmentofficialsmoreconfidencethattheagencyorprogramadjustmentsorreformstheyareconsideringarevalid.”

ThegoalofthiseffortistocontinuetodevelopagencyandprogramimprovementsandrecommendationsforimprovedOIGcoverageofdisasterreliefoperations,andthentotracksolutionsimplementingtheserecommenda-tions.BeginningOctober1,2006,theAfterAction/LessonsLearnedReviewwillevolveunderthenewDisasterReliefWorkingGroup.Itwillcontinuetotrackneededagencyoversight,policyadjustments,recommendations,andpotentialreforms.

Methodology TheleadagencieswereaskedtopresenttotheRoundtableonOctober5,2006,theissuestobeaddressedwithintheirfocusareaandaproposedplanformovingforwardtothePCIEECIERoundtable.Eachoftheleadagenciessolic-itedcommentsfromthefederalIGcommunity,asawhole,oracommunitysegment,todetermineissueareasandexpectations,andtodeveloptheirtimeline.Forexample,aquestionnairewasdevelopedtocanvassagencypersonnelontheirfamiliaritywiththenationalResponsePlan(nRP),otherresponseissues,shortcomings,andrecommendations.

Focus AreasItwasdecidedthattheAfterAction/LessonsLearnedReviewwouldfocusonlessonslearnedineightkeyareas.ThestudyareasandleadagenciesarepresentedinTable5-1onthefollowingpage. ThefocuselementsdescribedbelowwereidentifiedbytheLessonsLearnedteam.Theyformedthebasisforthecanvassingandinterviewsthattookplaceinthefallof2006.

pcie ecie AFter Action/leSSonS leArned review

On August 15, 2006, under the auspices

of the President’s Council on Integrity

and Efficiency/Executive Council on

Integrity and Efficiency (PCIE/ECIE)

Homeland Security Roundtable, Matt

Jadacki, the Special Inspector General

(SIG) for Gulf Coast Hurricane Recovery,

convened a meeting to begin an After

Action/Lessons Learned Review.

Roundtable efforts have been

focused on Hurricane Katrina since

September 2005. Twenty-two Offices

of Inspectors General (OIGs) have par-

ticipated in reviewing their department

or agency’s role in the federal govern-

ment’s response to the hurricane. This

review was launched to ascertain and

act on the lessons learned from the

federal response to the unprecedented

2005 hurricanes Katrina, Rita, and

Wilma.

“Shortly after the first three months

following the 2005 storms, a number

of lessons learned reports were issued

by various organizations, including the

White House,” said Mr. Jadacki. “These

reports were quite helpful in determin-

ing what immediate and short-term

solutions could be put in place while

the recovery period was still ongoing.”

lessons learned review

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Law Enforcement• BuildmoreeffectiveworkingrelationshipswithfederalOIGpersonnelandwithDepartmentof

Justice(DOJ),FederalBureauofInvestigation(FBI),andotherstateandlocallawenforcementofficials

• Developaninventoryofcriminalinvestigators,organizedbyskillorspecialtysets,willingtodeploytocatastrophiceventlocations

• Formalizethetaskforcearrangement,beforeacrisisoccurs,amongtheagencieswithnRPrespon-sibilities,toformalizethetaskforcearrangementthatcananticipatecrisissituationsandsatisfyspecialtyrequirementsoftheOIGcommunity.

Contracts• MakebetteruseoftheFederalProcurementDataSystem(FPDS)todeterminedisastercontracts

andtofacilitateauditsandinvestigations• Developadatabaseofexistingcontractstoobtaingoodsandservicesexpeditiouslyduringemer-

gencysituations.

Data Sharing• DeterminewhatdataareavailableforIGandlawenforcementpurposesandwhoneedsaccessto

theinformationandwhy• Determinehowdataaccessshouldbemanagedandshared• Identifyandresolverestrictionsandotherimpedimentstodataaccess.

AFter Action/leSSonS leArned review

Focus Area Lead Agency

LawEnforcement OfficeofPersonnelManagement(OPM)OIG,FirstResponders

DepartmentofJustice(DOJ)OIG,Anti-Fraud

Contracts GeneralServicesAdministration(GSA)OIG

DataSharing DepartmentofHomelandSecurity(DHS)OIG

StateandLocalLiaison DepartmentofHealthandHumanServices(HHS)OIG

DepartmentofHousingandUrbanDevelopment(HUD)OIG

Training DHSOIG

FundingandStaffing SmallBusinessAdministration(SBA)OIGandDHSOIG

Reporting DepartmentofDefense(DoD)OIG

MissionAssignments DHSOIG

Source: DHS OIG

table 5-1

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State and Local Liaison• Increaseoutreach,coordinationandcommunicationwiththestateandlocalauditcommunity,

includingleveragingtheirworktoavoidduplicationandrelyingonanotherIG’sworkongranteesorsubgrantees

• Useandconsiderthetimelinessandeffectivenessofsingleauditstoaddresscostreasonableness,performance,andeligibilityissues

• Determinehowtoimprovedatasharingonfederalprogramswithstateandlocalofficials,e.g.,jointapplicantbriefings.

Training• IdentifyoversightpersonneltrainingneedstopreparetheIGcommunitytodealwithdeclared

disasters• Developcoursestoprovidedisastermanagementtraining;topicstoincludethenRP,thenational

IncidentManagementSystem,andMissionAssignments(MAs).

Funding and Staffing• Identifyoptionsformakingadditionalfundingavailablesooner• Identifyoptionstorecruitandhireadditionalstaffmorequickly,e.g.,StaffordActauthorityfor

directhire.

Reporting • ClarifywhatneedstobereportedacrosstheIGs,andthefrequencyofreporting• Establishconsistentterminologytoavoidinconsistencyandduplication.

Mission Assignments (MAs)• EvaluatetheMAprocess,systems,andcontrols• IdentifytrainingneedsforstaffinvolvedinexecutingthephasesofanMA• Evaluatefundsmanagement,status,andtraceability• Determinehowtoimprovefieldstaffcoordination• Clarifyandimprovethebilling,reimbursement,andcloseoutprocesses.

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leSSonS leArned And potentiAl recommendAtionSInitialresponsesfromtheIGcommunityproducedthefollowinglessonslearnedandpotentialrecommendations.

Law EnforcementInrecentyears,catastrophiceventsintheUnitedStateshavedemonstratedtheimportanceofarapidandeffectivefirstresponsebylawenforcement.Mostrecently,duringtheaftermathofHurricaneKatrinain2005,thelawenforcementresourcesdeployedfromfederalagencies,aswellasstateandlocalgovernments,protectedlivesandproperty,andprovidedsecuritytotherescueandrecoveryefforts.However,theHurricaneKatrinaexperiencealsohighlightedtheimportanceofpreparednessandcoordinationamonglawenforcemententitiesinaddressingtheseevents.

First Responders—Inthelawenforcementarea,theOfficeofPersonnelManagement(OPM)hadalreadypursueddraftingamemorandumofunderstanding(MOU)withtheDepartmentofJusticeonbehalfoftheIGcommunity;i.e.,anMOUthatwouldofferlawenforcementresourcestotheAttorneyGeneralintimesofregionalornationalemergency.OPMhadcirculatedthedraftMOUamongthePCIEECIEcommunityforcomment.

TheproposedMOUbetweentheIGcommunityandDOJwouldsetuniformproceduresforthedesignation,selection,andassignmentofvolunteerfirstrespondersfromtheIGcommunity.However,commentsreceivedbyOPMinresponsetothedraftMOUhavehighlightedtheneedtoresolvefundingissues.

Anti-Fraud Measures—InadditiontoOPM’seffort,DOJOIGofferedtoaddressanti-fraudlessonslearned.In2005,theDOJlaunchedaseriesofanti-fraudmeasures.TheDOJcontactedthePCIEECIEHurricaneKatrinaFraudTaskForceregardingwhatlessonscouldbelearnedconcerninganti-fraudandwhatmeasuresshouldbetakenbeforethenextmajornaturaldisaster.TheOIGaskedthePCIEECIEmemberstocommentontheeffectivenessoftheiragency’santi-fraudmeasureswhenawardingpost-hurricanerelief;newanti-fraudmeasurestopreventfraudwhendistributingpost-disasterrelief;distributionofbenefits;procurements;andgrantawards.

Lessons Learned:TwelveOIGorganizationsrespondedtothesurvey.Theprincipalpointsgatheredfromthesurveyaresummarizedbelow.

Balancing the Need for Immediate Relief with the Need for Internal Controls—Respondentssaidfederalagenciesmustperformadelicatebalancingactbetweenmeetingthegoalofexpeditingemergencyassistanceandthegoalofensuringintegrityintheprocess.Manysurveyresponderscommentedthattheiragencyhadadequateinternalcontrolsinplace,butthosecontrolswerewaivedtoexpediterelief.

Additional Verification Procedures—ManyOIGscommentedthatadditionalverificationproce-dureswouldhelppreventfraud.TheDHSOIGnotedthatwhennotbypassed,FederalEmergencyManagementAgency(FEMA)hadanumberofcontrolsinplacetohelpreducetheriskofimproper

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payments.ThesecontrolsincludedreviewstoidentifyandprocessappropriatelythoseapplicantswhosuppliedduplicateSocialSecuritynumbers;verificationofcertaininformationthroughthird-partydatasources;physicalinspectionsbyFEMAcontractors;andreviewsofapplicant-providedsupportingdocumentationsuchasreceipts.

Warnings and Integrity Briefings—AnumberofOIGsnotedtheimportanceofwarninganypotentialdefraudersoftheconsequenceoftheiractions.ManyOIGsreportedthatDOJ’saggressiveapproachtoprosecutinghurricanerelieffraudcasesanditspublicationofitszerotolerancepolicy,includingafalsestatementwarningonapplicationsforbenefits,contracts,andgrantsprovedtobeastrongdeterrent.

Information Sharing and Coordination Within and Among Agencies—ThemajorityofOIGssurveyedstressedtheimportanceofsharinginformation,includingwithintheOIGitself,betweentheOIGandtheagencyitisoverseeing,amongfederalagencies,andwithstateandlocalagencies.Forexample,theEnvironmentalProtectionAgency(EPA)OIGreportedthatitconsideredcoordinationbetweentheOfficesofInvestigationsandAuditwithintheOIGtobeanimportantinternalcontroltopreventfraudonfundsbeingexpended.

Inaddition,anumberofOIGsreportedtheneedforbettercoordinationamongfederalagencies,bothpriorandsubsequenttodistributionofbenefits.Severalagenciesstressedtheneedtofindawaytoimprovedatasharing.TheHousingandUrbanDevelopmentOffice(HUD)OIGreportedthatithadsuccessfullyenteredintoadatasharingagreementwithFEMA,whichshouldallowthetwoagenciestoexposepotentialduplicationofbenefitawards.

TheDHSOIGsimilarlycommentedthatconsiderationshouldbegiventoamendingtheComputerMatchingandPrivacyProtectionAct(CMPPA)toexemptInspectorsGeneralfromthelengthyreviewandapprovalprocesscurrentlyrequiredtoperformdatamatchingforfrauddetection.

Inaddition,anumberofOIGsstressedtheimportanceofsharinginformationwithstateandlocalagencies.TheEPAOIGreportedthatitsgreatestinvestigativetoolwascoordinatingwithstateandlocalagenciestoinvestigatethecomplaintsitreceived.ThiscoordinationallowedtheEPAOIGtoidentifywitnessesandsubjectsthroughouttheaffectedGulfStates.

Internal Controls—TheOIGsreportedavarietyofinternalcontrolsthatcouldimprovetheinteg-rityofpost-disasterawardsofbenefits,grants,andprocurement.

SeveralOIGsnotedthattrainingfocusedonemergencyprocurementwouldbenefitboththecontractingofficersresponsiblefortheactionsandtheauditorsandinvestigatorsreviewingtheprocess.Inaddition,theEPAOIGnotedthattheEPAcreatedaQualityControlBoardtoreviewprocurements.TheOIGparticipatedonthisboardasanonvoting,advisorymember.Theboardreviewedprocurementsquicklyafteraward,identifiedvulnerabilitiesandissues,andaddressedproblemsonareal-timebasis.

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AnumberofOIGsreportedthaton-sitereviewinthedisasterareawascriticaltothepreventionoffraud.Theysaidfederalagenciesshouldmaximizetheuseofauditorsonallsolicitationsexceeding$1milliondollarstoensurecontractorcostorpricingdatausedinsupportofestimatesandassertionsarecurrent,accurateandreasonablypriced.

Successful Investigative Techniques—ThemajorityoftheOIGsreportedthattheyusedthesametypeofinvestigativemethodsasintraditionalinvestigations,butthattheyadaptedthetechniquestofitthespecialcircumstancesinwhichthefederalassistancewasgranted.Forexample,theSBAOIGreportedthatitworkedinconjunctionwiththeDHSOIGtoconductapproximately90consensualmonitoringsofsubjectswhofiledsuspectedfraudulentclaimsintheFEMAbenefitprogramsandtheSBAprograms.

ContractsOvertheyears,thefederalauditcommunityhasidentifiednumerousdeficienciesandproposedmultiplerecommendationstofederalagenciestoimproveitsoversightoverprocurements.RespondingtoHurricaneKatrinaprocurementsaddedadditionalcomplexitytoanalreadystrainedsystemandexacerbatedlong-standingproblems.Thefollowingarethedraftlessonslearnedduringthefederalresponsein2005and2006.

Tracking and Reporting Contract Information Is Needed—InrespondingtoHurricaneKatrina,federalagenciesawardednumerouscontractstorespondintheimmediateaftermathofthehurricane,aswellastoassistintherecoveryofthedisaster.Throughouttheresponseandrecovery,therehavebeenmultiplecallsforcontractdocumentsanddatafromnumeroussourcesseekingawidearrayofinformationincludingthefollowing:

New Orleans, LA—Just out-side the city, a backyard pool rests in a flood victim’s front yard. (SBA photo)

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• Informationontheamountandtypeofgoodsandservicesbeingprovided• Thesocioeconomicinformationaboutthecontractorsengaged• Informationonthesourcesoffundingoffederalagenciesissuingcontracts,specificallythosewith

multiplesourcesoffunding,suchasFEMAmissionassignments,specialappropriations,andagen-cies’normalappropriations

• Comprehensivelistsofcontractdataidentifyingthecontractuniverseandelectroniccopiesofcontractstoenablereviews,assessments,andinvestigationstotakeplacequicklytohelpreducefraud,waste,andabuse.

However,thistypeofinformationwasnotreadilyavailableforthecontractsthatwereissuedintheresponseandrecoveryforHurricaneKatrina.Instead,federalagenciesusedad-hocapproachesoragency-specificdatabasestocollectthisdata.

Acommondatabaseandelectroniccopiesofdocumentsareneededforallagenciestofacilitatethedisseminationofcontractdataaswellastheoversightofcontractors.OnesystemthatcouldbeusefultotracktheneededinformationwouldbetheFederalProcurementDataSystem-nextGeneration(FPDS-nG)1.

Potential Recommendation: ThePCIEcommunityrecommendsthatfederalagenciesensurethatprocurementinformationisenteredaccuratelyintoFPDS-nGwithinthreedaysofcontractaward.Allagenciesshoulduseasystemthatallowsthemtouploadorimportdatafromtheirtrackingorfinancialsystemintothefederalgovernment-widesystemwithoutrequiringmanualreentry.

Better Strategic Planning Is Needed to Address Disaster Acquisitions—Thegovernment’sresponsetothehurricanesdependedheavilyoncontractorstodeliverice,water,andfoodsupplies;patchrooftops;andprovidehousingtodisplacedresidentsandtemporaryfacilitiestolocalgovernmentagencies.AuditsbytheInspectorsGeneralandtheGovernmentAccountabilityOffice(GAO)identifieddeficienciesintheawardandexecutionofmanyoftheindividualcontracts,includingthefollowing:• Agenciesscrambledtopurchasesupplies,commodities,equipment,andotherresourcestosupport

emergencyanddisasterresponseeffortsfromnumerousvendorsbecause,priortothe2005storms,theirrequirementsassessmentswereinadequate

• Somekeyfederalagenciesinvolvedinrespondingtothedisasterdidnothaveadequateacquisitionplansforcarryingouttheirassignedresponsibilities

• Inseveralcases,smallbusinessesmayhavebeenexcludedfromparticipatingintherecoveryeffortsbecausetheycouldnotenterintothemultitieredsubcontractsexceptattheverybottom,whereprofitabilitywasverylow

1 Congresspassed,andthePresidentsigned,theFederalFundingAccountabilityandTransparencyAct(P.L.109-282),sponsoredbySenatorsCoburnandObamaonApril6,2006.ThislegislationrequirestheOfficeofManage-mentandBudget(OMB)tocreateadatabasethatallowsthepublictotrack$1trillioningrants,contracts,ear-marks,projectsandloans.ItisnotknownifthiswilltrackwithFPDS-nG.

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• Insufficientknowledgeofthemarket,unsoundorderingpractices,andpoorinteragencycommuni-cationsledtoexcessiveorwastefulexpenditures

• Callorstandbycontractswithprenegotiatedprices,quantities,termsandconditions,andspeci-ficationscouldhavegreatlyfacilitatedpost-disasterprocurementoperations,buttheywerenotimplemented

• Inmanyinstances,thegovernmentdidnotpayareasonablepriceforitspurchasesbecause,inpart,competitionwaslimited.

Potential Recommendation:Thefederalgovernmentshoulddevelopbettercontractingstrate-giesthatmaximizetheuseofadvancecontractstotheextentpracticalandcost-effective.Pre-existingcontractsthatarenegotiatedbeforedisastersstrikeandcoordinatedwithstateandlocalgovernmentscouldhelpmitigatetheaboveproblems.Byhavingthesecontractsinplacepriortothedisaster,thecontractpersonnelwouldnothavetoperformresponsibilitydeterminationsorpriceanalysisunderemergencytimeframes.Italsoprovidesthecontractingpersonnelwiththeabilitytodevelopknowl-edgeofproductsandservicesoveranextendedperiodsotheseanalysescanbemoreeasilyconductedonanongoingandcontinuousbasis.

Contract Monitoring Is Crucial to Minimizing Fraud, Waste, and Abuse— Effectivemonitoringensuresthatgoodsandservicesaredeliveredaccordingtotheagreedschedule,cost,quality,andquan-tityprovisionsinthecontract.Effectivemonitoringreliesonhavingsufficientnumbersoftrainedandproperlydeployedpersonneltooverseecontractorperformance.AtthetimeHurricaneKatrinastruck,manyofthefederalprocurementofficeswerealreadyunderstaffedandFEMAhadonlyone-thirdofthestaffneededtoperformday-to-dayofficefunctions.TheOIGs’observationindicatedthatthenumberofmonitoringstaffavailablewasnotsufficient,norweretheyeffectivelydeployedtoprovidesufficientoversight.

Inadequatestaff,andturnoverofstaff,affectedtheabilitytoprovidetheconsistencyneededtoensureapplyingadequatecontrols.Miscommunicationandinadequatetransitionresultedininvoicesbeingsignedwithoutverificationofreceiptofgoodsorservices,aswellassignificantcostandpricevariations.Therewasabreakdownindocumentationforthereceiptofgoodsanddeliveryofservices.Thisintensifiedwhenthecontractingofficeroperatedfromadifferentlocationfromthecontractingofficer’stechnicalrepresentative(COTR)orapartfromthedeliverylocation.Largernumbersofbetter-trainedstaff,remainingon-siteforlongerperiodsoftime,areneededtowriteandmonitorcontracts.

Potential Recommendation: ThePCIEcommunityrecommendsthatagenciesprovidesufficientnumbersoftrainedfield-levelcontractingstaffandCOTRstomeetmissionrequirements.DHSshouldalsoestablishanassessmentprocesstomonitorplanningeffortsfordisaster-relatedprocurementneedsandtomonitorandmaintainsurgecapacityfordisastercontracting.Adequatefundingshouldbedevotedtoacquisitionoversighttohelppreventsignificantfraud,waste,andabuseindisastercontracts.

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Data SharingInformationsharingamongfederalagenciesrespondingtoHurricaneKatrinawascomplicatedbytwopredominantfactors:

AuthorityandmechanismsneedtobesettoshareinformationprotectedbythePrivacyActamongagenciesprovidingdisasterassistance,includingthoseagenciesresponsibleforpublicsafetyandsecurity.

Data Matching Delays—ThereisalengthyprocessrequiredbytheComputerMonitoringandPrivacyProtectionAct(CMPPA)toallowdatamatchingactivitiesthatareusedtodetermineimproperandfraudulentdisasterassistancepayments.

ThePrivacyActandotherconfidentialitystatutesoragencyregulationsoftenrestrictthedisclosureofdatamaintainedbyfederalagencies.Thiscomplicatesthesharingofdataamongfederalagenciestodeterminedisasterassistanceeligibilityoridentifyimproperpayments.Additionally,lawenforce-mentofficialswerenotgivendirectaccesstoFEMArecordstolocatemissingchildrenandidentifythewhereaboutsofregisteredsexoffendersandfugitivefelons.

TheCMPPApreventedtheinitiationofseveralproactivefraudinvestigationsbecauseitrequiresaprotractedreviewandapprovalprocessbeforedataminingcanbeperformedtodetermineimproperorfraudulentdisasterassistancepayments.

Data Sharing Agreements—Todate,onlyDHSandHUDhaveexecutedamatchingagreementtoidentifyindividualswhoreceivedimproperorexcesshousingassistance.Otherfederalagen-ciesarecurrentlydraftingagreementstoidentifyfraudandimproperpayments.EstablishmentoftheHurricaneKatrinaFraudTaskForcehasbeeneffectiveinfacilitatingthecoordinationoffraudinvestigations,buttheabilitytoperformdatamatchingwouldprovideaninvaluabletooltoaidtheseinvestigations.

Toaddresstheinformationsharingchallengesrevealedinthehurricaneaftermath,thePCIEis

New Orleans, LA—One of the file rooms at the Social Secu-rity Administration offices in New Orleans after hurricane Katrina hit. (SSA photo)

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closelyexaminingwhatchangesarewarrantedtoimproveinformationsharingfordisasterresponseandrecoveryoversight.

State and Local LiaisonTheDepartmentofHealthandHumanServices(HHS)OIGstaffcontactedauditofficesinseveralGulfCoaststatestodeterminewaystoincreasecoordinationandcommunicationamongthestateandlocalauditorsandthefederalauditcommunitywhenrespondingtoacatastrophicdisasterorevent.Inaddition,HHSOIGcanvassedfederalInspectorsGeneral(IGs)onhowthefederalauditcommunitycouldbettercoordinateauditsduringcatastrophiceventssuchasHurricaneKatrina.

Potential Recommendation: Audit Response Plan. WorkingthroughthemembershipofthenationalIntergovernmentalAuditForum,anaudittaskforceshouldbeestablishedtodevelopanauditresponseplan.Thisassociationofauditexecutivesfromfederal,state,andlocalgovernmentsprovidesavehicletoaddresscommonchallengeswithintheauditcommunity.LessonslearnedfromHurricaneKatrinaandcorrectiveactionsneededshouldbediscussed.BecausethestateauditorsinLouisianahavebeeninvolvedinaproactiveauditingroleinresponsetoHurricaneKatrina,theycouldserveasasourceofinformation.Additionally,stateauditorsmaybeabletoprovide“institutionalknowledge.”Onestateauditorreportedthattheoriginal,ten-year-oldstateplanwithFEMAincludedanagreementthatthestateauditorswouldassistauditingexpendituresatapresetlimit.

Toprepareforanauditresponsetothenextdisaster,theauditcommunityshouldperformadvancedcoordinationandplanningsimilartotheadvancedcoordinationandplanninginotherareasofdisasterplanning.SeveralstateauditofficialsandIGssuggestedthatthePCIEECIEdevelopanauditresponseplantoinclude:• Coordination• Communication• Funding

Step1:CoordinationThefirststepindevelopinganauditresponseplanistodetermine,withineachstateandfederalauditoffice,asinglepointofcontactintheeventofadisaster.Eachfederalagencyhascertainareasofresponsibilityinamajorincident.Thefederalagencyworkswithfamiliarstatecounterpartsbecausetheyworktogetherduringdisastertrainingandexercises.Similarcontactpointsshouldbeestablishedintheauditcommunity.

Step2:CommunicationCommunication,duringandafterdisasters,needsthemostimprovement.Severalofthestateauditorsnotedthatfederalauditorsseemedtobespreadthroughoutthestateanddidnotcoordinatewiththefederalauditcommunityandstateauditors.

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• Toprovidebettercommunication,identifyasingleauditpointofcontactineachstateandfederalagency.

• EstablishanemergencyWebsiteforauditorstouseasapointofreference.Thissitecouldprovidebackgroundinformation,suchaspointsofcontactateachauditagency.TheWebsitecouldbeusefultoauditorsasatoolinplanningandcommunicationinresponsetothedisaster.

Stateauditorsalsonotedthatfundsfordisasterreliefandrecoveryflowedintotheirstatesfromseveralsources,buttherewasnosystemtotrackfundsproperly.TheWebsitecouldbeusedtocommunicateagencyfundsflowingintoeachstate.

Step3:FundingSupporttotheStatesforDisasterAssistanceAuditsFundingissuesmustalsobeaddressedintheauditplanningprocess.Stateauditagenciesarenotfundedspecificallyfordisasterassistanceworkanddonothavetheresourcestoprovideauditassis-tancebeyondthoseareasalreadyincludedintheirworkplan.• Federalfundsshouldbesoughttohelpstatesparticipateinplanningfordisasters,includingtravel

andsalarycostsandperformingadditionalauditworkinresponsetodisasters.FundingthroughFEMAdisasterprogramsshouldbepursuedasanoption.

• Identifythetypesofskillsandknowledgethatstategovernmentauditorsmightprovidetofederalauditors.Generally,stateauditorshavesingleauditexpertise.Theyalsopossessknowledgeofandaccesstostaterecordsandsystems.Stateauditorscanprovideexpertiseindataminingandarefamiliarwiththeirpaymentsystems.

TrainingThefollowingtrainingsegmentsforoversightandmanagementwereidentified:• nationalResponsePlan(FEMAandagencyroles)• nationalIncidentManagementSystem• SafetyandHealthinformation• TheStaffordAct,includingtheMissionAssignmentsprocess• FederalAcquisitionRegulation(FAR)supplementalrequirementsforemergencies• Auditingdisasterrecoveryfundingandreimbursementsincludingthetraininginreal-timeaudits

thatarebeingdistributedatthesametimetheauditisbeingconducted• ExamplesoffraudschemesidentifiedintheGulfCoasthurricanes• Guidanceondevelopingauditprocedurestodetectfraud.

Funding and StaffingBasedonexperiencewithHurricaneKatrinaandtheotherGulfCoasthurricanesduring2005,theSBA/DHSteamisattemptingtodetermineimprovementsinfundingandstaffingprocessestorespond

10�


morequicklyandeffectivelytofuturedisasters.Asummaryofsurveyresponsesfrom19federalover-sightagenciesarelocatedbelow.

Survey Question: DidyourorganizationreceiveanysupplementalfundingforworkrelatedtotheaftermathoftheGulfCoasthurricanes(Katrina,RitaandWilma)?Response:Yes,3;no,16Therespondentswhodidreceivefundingindicatedthatthefundswereeitherlate,belowrequested

levels,orboth.Sixoftherespondentssaidtheyhadtocancelordefernon-Katrinarelatedwork(e.g.,audits,inves-

tigations,orevaluations)oractivities(e.g.,trainingandteammeetings)tofocusresourcesonoversightofHurricaneKatrinarelief,whilethreesaidtheywouldhaveundertakenmoreresponseorrecoveryworkorstarteditsoonerifadditionalresourceshadbeenavailableormoretimely.

Survey Question.Didyouincreasestaffingasaresultofthe2005hurricanes?Response:Onlyonerespondentindicatedthattheyhadincreasedstaffing.Balancing Work Priorities—Itisachallengefororganizationstorespondadequatelyorquickly

toamajorcatastrophesuchasHurricaneKatrinawithoutdeferring,constraining,orcancelingotherhigh-prioritywork.Evenininstanceswheresupplementalfundingisavailableforincreasedoversightinresponsetoadisaster,fundingdelaysresultfromthenormalappropriationsprocess.

BecausemostrespondentsdidnotincreasestaffingasaresultofHurricaneKatrina,theabilitytorecruitandhireadditionalstaffquicklyforoversightactivitiesrelatedtothedisasterdoesnotappeartobeanobstacleforthePCIEECIEasawhole.

Potential Recommendation: ThePCIEECIEshouldworkwithOfficeofManagementandBudgetandCongresstoexplorewaystomakeneededfundingavailabletooversightagenciesmorequicklyfollowingamajordisaster.OnepossibleapproachcouldbeincreaseduseofMAs.Forexample,makefundsfromtheFEMADisasterReliefFund(DRF)availabledirectlytooversightagenciesforexpandedoversightactivitiesrelatedtothedisaster.AnotherapproachcouldbeforoversightagenciestoreceiveacertainpercentageofDRFfundsreceivedbytheagency’sparentorganization.

Reporting ThePCIEECIEcommunity’ssemi-annualhurricanerecoveryreportstoCongressareanimpor-tantwaytodescribetheworkperformedbythefederalIGs.WhiletheIGcommunityindicatedthatreportingcategoriessufficientlycoveredtheworkperformed,thereareinconsistenciesinreportingcategoriesbytheindividualIGs.

Improve Data Collection—ThePCIEECIEcommunityshouldimprovedatacollectiontoensurethatreliableandconsistentdataarereportedtoCongressandthepublic.TheindividualIGsarenot

105


alwaysusingthesamereferencepointstoportraytheinformationorauditworkperformed.WhilemostoftheIGsstatethatthedirectionsfordatareportinghavebeensufficienttocompletethereports,inmanycasescomparisonamongtheagencies’datawaslikecomparing“applestooranges.”

Forexample,thereweredifferencesinauditlanguage;specifically,theterm“contractaction”and“review”versus“audit.”Anauditandareviewarenotthesamething:oneauditcouldincludemultiplecontractactions,whichwillinevitablytakelonger,andanotherwouldincludeareviewofonecontractaction.

Potential Recommendation: Reporting Reconciliation—IGinvestigationsstaffshouldalsoimprovetheirinvestigativeandhotlinestatistics,toensureagainstdouble-countingcasenumbers,particularlyincaseswhenmultipleagenciesareinvolved.Likewise,onlinestatisticsshouldbescru-tinizedbecausenotallhotlinecontactsresultinreferralsandnotallreferralsresultininvestigations.AlthoughIGstaffmayunderstandtheinformationpresented,supplementaldefinitionswouldbenefitdatausersoutsidethecommunity.

Astheprocessforcollectingandtabulatingtheinformationmatured,thereportingproductsclearlyimproved.TheExecutiveReviewBoardwasagoodexampleofimprovingthereportingprocess.

Mission AssignmentsRespondentsreportthattheoverallMAprocesswasgenerallyeffective.However,coordination,communication,guidance,andactionsbyFEMAandparticipatingagenciesallneedimprovements,

Bywater, LA—A resident of this New Orleans township replants shrubs around their new town sign in July 2006. (SBA photo)

106


especiallyinaccountingforfundsandproperty.Also,timelycoordinationandcooperationwithintheOIGcommunityonreviewsofMAscouldbeimproved.

ThroughMAs,FEMAtasksandreimbursesotherfederalagencies(OFAs)forprovidingservicesundertheStaffordAct.

FormoredetailonMAs,seetheglossaryattheendofthisreport.MA Accountability—AgencyaccountabilityandcontroloverMAfundscouldbeimprovedinthe

followingareas:• TrackingandreportingofMAfundsandexpenditures• TimelysubmissionofdocumentedbillingstoFEMA• Promptidentificationoffundsfordeobligation• Propertymanagement.

Potential Recommendation:AdditionalFEMAguidanceonMAscouldaddressagencyreimburse-mentrequestsandrequiredsupportingdocumentation;accountingforcreditcardpurchases;promptidentificationofpotentialdeobligations;andpropertysubjecttoreturntoFEMA.

FEMAinitiallyobligatedmorethan$8billioninMAsandtaskedatleast70agenciestoperformvariousdisasterreliefservicesinconnectionwiththe2005hurricanes.TwentyInspectorsGeneralconductedreviewsofMAsandidentifiedissuesforfurtherreview.

Potential Recommendation:DevelopaPCIEDisasterActionPlanthatwouldprovideproce-duresforcoordinatingtheoversightofmajordisasterstoincludepredisasterassessmentsconcerningpreparedness,on-sitereviewsofinternalcontrolsandcoordination,andpost-disasterreviewswithanemphasisonfieldreviewsofactiveMAsandjointreviewsforhigh-riskareas.

fUndInG


6

New Orleans, LA, August 1�, 2006—The twin span bridge in New Orleans a year after it was badly damaged by Hurricane Katrina. The Federal Government, through FEMA, has provided billions of dollars to help rebuild infra-structure. (Ed Edahl/FEMA photo)

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109


emergency SupplementAl AppropriAtionSFouremergencysupplementalappropriationsbillsweresignedintolawinresponsetothe2005GulfCoasthurricanes:• PublicLaw(P.L.)109-61,EmergencySupplementalAppro-

priationsActtoMeetImmediateneedsArisingFromtheConsequencesofHurricaneKatrina,September2,2005

• P.L.109-62,SecondEmergencySupplementalAppropria-tionsActtoMeetImmediateneedsArisingFromtheConse-quencesofHurricaneKatrina,September8,2005

• P.L.109-148,DepartmentofDefense,EmergencySupple-mentalAppropriationstoAddressHurricanesintheGulfofMexico,andPandemicInfluenzaAct,2006,December30,2005

• P.L.109-234,EmergencySupplementalAppropriationsActforDefense,theGlobalWaronTerror,andHurricaneRecovery,2006,June15,2006.

InSeptember2005,Congresspassedthefirsttwosupple-mentalacts,P.L.109-61andP.L.109-62,appropriating$60billiontotheDisasterReliefFund(DRF),whichismanagedbytheFederalEmergencyManagementAgency(FEMA),undertheDepartmentofHomelandSecurity(DHS)andprovidesfundingtootherfederalagenciesusingmissionassignments(MAs).

InDecember2005,thethirdemergencysupplemental(P.L.109-148)redirected$29billionofthepreviouslyapproved$62.3billion,containedinthefirsttwoemergencysupple-mentalbills,towardeconomicdevelopment,restorationoffederalfacilities,andtaxrelief.

Also,thethirdsupplemental,P.L.109-148,initiallyappro-priated$28.6billion,but$23.4billionwasrescindedbydecreasingtheDRF.Thusthe“net”appropriationforP.L.109-148was$5.2billionandthe“net”cumulativetotaloverthefirstthreesupplementalactsis$67.5billion.

The response and recovery effort fol-

lowing the 2005 Gulf Coast hurricanes

continues to receive federal funding

support. Congress has appropriated

$87.7 billion in four emergency supple-

mental acts since September 2005: two

in September 2005, one in Decem-

ber 2005, and the most recent one in

June 2006 (see Table 6-1). The Center

on Philanthropy at Indiana University

continues to track private funding in

cash and in-kind gifts. The private dona-

tions received, as of June 30, 2006, are

$3.51 billion.

gulf coast recovery Funding

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Fourth Emergency Supplemental ActThefourthEmergencySupplementalAct,P.L.109-234,becamelawonJune15,2006,anddirected$20.2billionacrossalargenumberoffederalagencies,includingtheinspectorsgeneral(IGs)forDHS,theDepartmentofDefense(DoD),Depart-mentofHousingandUrbanDevelopment(HUD),andtheU.S.DepartmentofAgricul-ture(USDA).TheDHSreceivedthelargestamountofappropriationsofalltheagencies.

DHS’s$6.66billionappropriationisprimarilyforFEMA’sDRF;aswellasaddi-tionalfundsforCustomsandBorderProtec-tionandtheU.S.CoastGuard.Inaddition,theappropriationenabledDHStodothefollowing:

hurricAne-relAted emergency SupplementAl Funding proFile (in thousands)

Department/ Agency P.L. 109-61 P.L. 109-62 P.L. 109-148 P.L. 109-234 Subtotals

DHS(FEMADRF1) $10,000,000 $49,985,000 -$23,409,000 $6,000,000 $42,576,000

DHS(Other) - $15,000 $285,000 $662,000 $964,000

Dept.ofCommerce - - $404,000 $150,000 $554,000

DoD/USACE $500,000 $1,800,000 $8,653,000 $5,358,380 $16,311,380

Dept.ofEducation - - $1,600,000 $295,000 $1,895,000

Dept.ofInterior - - $70,000 $260,000 $335,000

DeptofHealthandHumanServices - - $640,000 $12,000 $652,000

Dept.ofHousingandUrbanDevelopment - - $11,890,000 $5,200,000 $17,099,000

Dept.ofJustice - - $229,000 $8,500 $237,500

Dept.ofLabor - - $125,000 $16,000 $141,000

Dept.ofTransportation - - $2,798,000 $702,362 $3,500,362

Dept.ofVeteransAffairs - - $593,000 $761,919 $1,354,919

SmallBusinessAdministration - - $446,000 $542,000 $988,000

Dept.ofAgriculture - - $779,000 $152,400 $931,845

OtherAgencies - - $130,000 $85,000 $215,000

Totals $10,500,000 $51,800,000 $5,233,000 $20,205,561 $87,755,006

Source: Public Laws 109-61, 109-62, 109-148, 109-234

Note 1: Disaster Relief FundNote 2: This table does not reflect the increases in FEMA’s National Flood Insurance borrowing authority, specifically (a) P.L 109-65 increased borrowing authority from $1.5 billion to $3.5 billion; (b) P.L. 109-106 increased borrowing authority from $3.5 billion to $18.5 billion; and (c) P.L. 109-208 increased borrowing authority from $18.5 billion to $20.8 billion.

table 6-1

New Orleans, LA, April 10, 2006—A diver passes a line under a Hurricane Katrina sunken boat and prepares to hand it to a barge workman. The U.S. Coast Guard is removing sunken boats and ships that are in the 320 miles of navigable waterways. (Marvin Nauman/FEMA photo)

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• MakeappropriationsfortheDisasterAssistanceDirectLoanProgramAccountforthecostofdirectloanstoassistlocalgovernmentsaffectedbythehurricanesinprovidingessentialservices

• PermitFEMAtoprovidefundstoastateorlocalgovernmentorassumeanexistingagreementfromsuchagovernmentunittopayforutilitycoststhatresultedfromprovidingtemporaryhousingunitstoevacueesfromthehurricanes

• DirecttheSecretaryofHomelandSecuritytoconsiderthecostsforalternativehousingpilotprogramsintheareashardesthitbythehurricanestobeeligibleundertheFEMAIndividualAssistanceProgram.

OtherappropriationsfromthefourthEmergencySupplementfornecessaryexpensesrelatedtothe2005hurricanesarerepresentedinFigure6-1onthenextpageandincludethefollowing:• $150milliontotheDepartmentofCommerce(DOC)foroperations,research,facilities,procurement,

acquisition,andconstructionforthenationalOceanicandAtmosphericAdministration(nOAA)• $5.36billiontotheDoDformilitarypersonnel;operationsandmaintenance;procurementandship-

buildingandconversion;research,development,test,andevaluation;theDefenseWorkingCapitalFundandthenationalDefenseSealiftFund;GeneralFundpayment;surchargecollections;salesofcommissarystores;theDefenseHealthProgram;andtheOfficeoftheInspectorGeneral.nearlyhalfoftheDoDappropriatedfundsarefortheU.S.ArmyCorpsofEngineers(USACE)todevelopaplanfordeepdraftnavigationoftheMississippiRiver;construction;operationsandmaintenancetodredgenavigationchannelsandotherUSACErepairprojects;floodcontrolandcoastalemergencies

• $295milliontotheDepartmentofEducation(ED)fornecessaryexpensesrelatedtohurricanereliefandrecoveryandforhurricaneeducationrecovery

• $265milliontotheDepartmentofInterior(DOI)forwaterandrelatedresources,FishandWildlifeService;nationalParkService;HistoricPreservationFund;theU.SGeologicalSurveyforsurveys,investigations,andresearch;royaltyandoffshoremineralsmanagement

• $8.5milliontheDepartmentofJustice(DOJ)forsalariesandexpensesforgenerallegalactivitiesandforU.S.Attorney’sofficesnationwide

• $16milliontotheDepartmentofLabor(DOL)forhurricanereliefandrecoveryeffortsfortheEmploy-mentandTrainingAdministration,theCorporationfornationalandCommunityService,andtheCivilianCommunityCorps

New Orleans, LA—Indi-viduals and beneficiaries affected by the Gulf Coast hurricanes gather during July 2006 at a Social Secu-rity Administration office to receive services. (SSA photo)

112


DoD – $5.35

hurricAne recovery: Fourth SupplementAl AppropriAtionS(in millions)

Source: Public Law 109-234

Figure 6-1

DHS – $6.66

HUD – $5,200

DVA – $761

DOT – $702

SBA – $542

ED – $295

DOL – $16

GSA – $37DOC – $150

USDA – $152DOI – $260

HHS – $12

NASA – $35

EPA – $13

DOJ – $8

total: $20.2 Billion

• $702.4milliontotheDepartmentofTransportation(DOT)fortheFederalHighwayAdministration’sEmergencyReliefProgram

• $13milliontotheEnvironmentalProtectionAgency(EPA),includingfortheLeakingUndergroundStorageTankProgram

• $37milliontotheGeneralServicesAdministration(GSA)forhurricanereliefandrecoveryeffortsfortheFederalBuildingsFund

• $12milliontotheDepartmentofHealthandHumanServices(HHS)forhurricanereliefandrecoveryeffortsfortheHumanResourcesandServicesAdministrationandtheCentersforDiseaseControlandPrevention

• $5.2billiontotheHUDCommunityDevelopmentFundforstateswithaPresidentiallydeclareddisaster.Priortoobligatingfunds,statesmustsubmitplanstoHUDdetailingtheproposeduseofallfunds,includingeligibilitycriteriaandhowtheuseofsuchfundswilladdresslong-termrecoveryandinfrastructurerestoration.HUDwillensurethatsuchplansgiveprioritytoinfrastructuredevelopmentandrehabilitationandtotherehabilitationandreconstructionoftheaffordablerentalhousingstock,includingpublicandotherHUD-assistedhousingandtoestablishprocedurestopreventrecipientsfromreceivinganyduplicationofbenefits,includingquarterlyreportstotheCongressregardingstepstopreventfraudandabuseoffunds

• $35milliontothenationalAeronauticsandSpaceAdministration(nASA)fornecessaryexpensesrelatedtohurricaneconsequencesincludingtheStennisSpaceCenterandtheMichoudAssemblyFacility

11�


DHS $2,000,000

DoD $326,000

HUD $9,000,000

USDA $445,000

Total for OIG $11,771,000

Source: Public Law 109-234

table 6-2

hurricAne recovery: Fourth SupplementAl AppropriAtionSinSpectorS generAl Funding

• $542milliontotheSmallBusinessAdministration(SBA)fortheDisasterLoansProgram• $152milliontoUSDAforthenationalForestSystem;theworkingcapitalfund;salariesandexpenses;

buildingsandfacilities;theemergencywatershedprotectionprogram;andtheruralcommunityadvancementfund

• $761.9milliontotheDepartmentofVeteransAffairs(DVA)fortheplanning,design,andconstructionofanewArmedForcesRetirementHomeinGulfport,Mississippi(directstheSecretaryofVeteransAffairstocleanupandtransferalllandparcelsoftheDepartment’slandinGulfporttothecityofGulfport)

• $11.7millionforIGorganizationsinfourDepartments:HUD,DHS,DoD,andUSDA.Thesefundswillbespentforhurricane-relatedaudits,reviews,andinvestigationsabovetheannualappropriationsfortheseorganizations.(SeeTable6-2below.)

diSASter relieF FundFEMA’sDisasterReliefFund(DRF)isthemajorsourceoffederaldisasterrecoveryassistanceforthestateandlocalgovernmentswhenadisasteroccurs.IntheJune15,2006,EmergencySupplementalAct,theDRFreceivedaninfusionof$6billionforhurricane-relatedassistance.ThesupplementalappropriationsmadetoDRFremainavailableuntilexpended.Inthe13monthssincethestormsdamagedtheGulfCoast,$43.24billionhasbeenappropriatedtotheDRFbythefouremergencysupplementalappropriationsacts.

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Figure6-2presentsthestatusofDRFallocations(plannedspending),obligations,andexpendituresasofSeptember30,2006.Thefigureshowsthat,ofthefundsappropriatedtoFEMA,$38.5billionhasbeenallocated,$36.8billionhasbeenobligated,and$23.9billionhasbeenexpended.SinceMarch31,2006,when$23.1billionwasobligated,anadditional$13.7billionwasobligatedand$15.8billionwasexpended.

miSSion ASSignmentS (mAs)Throughmissionassignments,FEMAtasksandreimbursesotherfederalagenciesforprovidingservicesundertheStaffordAct.Therearethreecategoriesofmissionassignments:

• Technicalassistance(TA),whereotherfederalagenciesprovideexpertisetostates;100%ofthisassis-tanceisfederallyfunded;andthereisnostatecostshare

• Directfederalassistance(DFA),wherethestaterequeststheassistance;theassistanceissubjecttostatecostshare(unlesswaivedinresponsetimeframe)andgoodsandservicesareprovidedtothestatetosavelivesandprotectproperty

• Federaloperationssupport(FOS),where100%oftheassistanceisfederallyfunded;thereisnostatecostshare;andthereisFed-to-Fedfieldoperationssupport.Thiscategoryreflectsagreementswith

Source: FEMA Weekly Disaster Relief Fund Report (as of 9-30-2006)

Figure 6-2

StAtuS oF the 2005 hurricAne-relAted diSASter relieF Fund (in billions of dollars)

115


FemA 2005 hurricAne recovery miSSion ASSignmentS, By Agency

Department / Agency

Katrina Mission Assignments

Rita Mission Assignments

Wilma Mission Assignments

Total Mission Assignments

USACE $3,983,830,516 $650,115,000 $293,772,000 $4,927,717,516

DoD $1,123,593,889 $48,480,000 $3,550,000 $1,175,623,889

DHS $466,830,726 $56,820,685 $30,681,512 $554,332,923

DOT $426,169,213 $62,022,000 $20,083,000 $508,274,213

EPA $321,886,200 $44,545,000 $440,000 $366,871,200

USFS $178,545,288 $180,905,000 $5,580,000 $365,030,288

HHS $161,637,800 $83,290,000 $9,395,000 $254,322,800

HUD $82,945,000 $120,000 - $83,065,000

GSA $77,988,268 $540,000 $130,000 $78,658,268

DOJ $55,629,600 - $45,000 $55,674,600

Other $104,639,088 $24,836,600 $2,380,884 $131,856,572

Total $6,983,695,588 $1,151,674,285 $366,057,396 $8,501,427,269

Source: FEMA Weekly Disaster Relief Finance Report (as of September 30, 2006).

Note: Arranged by the top ten Mission Assigned agencies based on Hurricane Katrina Assignments by FEMA.

table 6-3

federalagenciestoperformservices,suchasprovidingsearch-and-rescueoperations;providinghealthandmedicalsupport;assistingwithdiseasepreventionandcontrol;transportingdisastervictims;anddeliveringfood,water,andotheressentialcommoditiestodisastervictims.

Table6-3belowprovidesabreakdownofMAsexecuted,byagency,foreachhurricane.

116


privAte donAtionS For hurricAne recoveryInadditiontofederalappropriations,significantprivatefundshavebeendonatedtoassistinrecoveryefforts.Thetotalamountsandusesofprivatedonations,$3.5billionasofJune30,2006,areshowninFigure6-3below.ThisinformationisprovidedbyGivingUSA2006,apublicationoftheGivingUSAFoundationresearchedandwrittenbytheCenteronPhilanthropyatIndianaUniversity.

depArtmentAl Funding reportSDepartment of Housing and Urban DevelopmentAsrequestedbyPresidentBush,$4.2billioninadditionalfundingwasallocatedtothestateofLouisianatofundlong-termrecoveryandrestorationefforts.HUDconductedpanelmeetingswiththeotherGulfStatestodiscussallocationrequestsandunmetneeds.HUDSecretaryAlphonsoJacksonannouncedemergencyCommunityDevelopmentBlockGrant(CDBG)fundingallocationsfortheremainingfourGulfStatesasfollows:• Texas,$428million• Mississippi,$423million• Alabama,$21million• Florida,$100million.

Human Services – $2,700

Religion – $262

Public-society benefit – $249

International – $140

Foundations – $51

Unknown – $51

Environment – $29Education – $10

Health – $9Arts – $5

uSeS oF privAte donor FundS For 2005 hurricAne recovery(in millions of dollars)

Source: Giving USA 2006 and University of Indiana Center on Philanthropy

Figure 6-3

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Inaddition,HUDopened20newhomesintheFischerdevelopmentinthenewOrleansareaandhasworkedtoredevelopotherpublichousingdevelopmentstoaccom-modatereturningresidents.HUDcontributed$500,000tothecity’sneighborhoodsRebuildingPlan(orcharrette)process,whichisacommunity-drivenefforttohelpguidetherevitalizationofthecity’sneighborhoodsthataddresseseachcommunity’sprioritiesandplans.

FEMA Disaster Relief MAs to Housing and Urban DevelopmentThefundingforFEMA’sdisasterreliefMAsisdetailedbelow.

Katrina Disaster Housing Assistance Program (KDHAP)—$79millionfundedtoFEMAtorelocatealmost102,000familiesintheprincipaldisasterarea,specifically• Publichousingagenciesin44stateshelpedtorelocateevacuees• HousingAuthorityofnewOrleansrelocated14,000familiesandissued119Housing

ChoiceVouchersand1,721DisasterVouchers• HUDtransitionedKDHAPtoDisasterVoucherProgram.

Real Estate Owned (REO) Properties—$29millionadvancedtoHUD-contractedmanagementandmarketingfirms• 6,500housesin11statesweretakenoffthemarketforrehabilitationanduseby

evacuees• 2,600werehousesreadiedforevacueehousing• REOpropertiesofferedforsaletoevacueesatadiscount• 68salescontractswereacceptedfromhurricaneevacuees• nineREOpropertiesweresoldatadiscounttoevacuees.

Disaster Voucher Program—$390.3millionwasfundeddirectlytoHUD• PortableSection8vouchers• ProgramtoexpireSeptember30,2007• Criteria:livinginunitthatwaspartoftheHUDrentalassistanceprogrambeforethe

hurricane;livinginemergencysheltersand/orhomeless• Morethan27,000familiesassisted• Morethan20,000unitsleased• Morethan$113milliondisbursedforassistance.

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Previously Allocated CDBG Disaster Recovery Assistance Grants—$11.5billiontofiveGulfStates• $6.21billionforLouisiana• $5billionforMississippi• $74.5millionforTexas• $82.9millionforFlorida• $74.3billionforAlabama.

CDBG Disaster Recovery Assistance Grants—$5.2billionadditionalfundingtofiveGulfCoaststates• $4.2billionforLouisiana• $423millionforMississippi• $428.6millionforTexas• $100millionforFlorida• $21.2millionforAlabama.

Gulf States’ Plans for Disaster Recovery AssistanceTheGulfStates’approvedplansforCDBGdisasterrecoveryassistancearesummarizedbelow,bystate.

Louisiana• $10.4billioninhurricane-relatedCDBGfederalfunding• PrimaryadministeringagenciesaretheLouisianaRecoveryAuthorityandtheLouisianaOfficeof

CommunityDevelopment• “TheRoadHome”HousingProgram,fundedat$8billion• HomeownerAssistanceProgram(ahomeownercompensationplan),fundedat

$6.3billion• Restorationofhomelesshousingsheltercapacity,fundedat$26million• WorkforceandAffordableRentalHousingProgram,fundedat$1.5billion• Otherdeveloperincentives,fundedat$21million• Localgovernmentcodeenforcementprogram,fundedat$11million• Economicdevelopmentprograms,fundedat$332.5million• Administration,fundedat$189.8million.

Mississippi• $5.4billioninhurricane-relatedCDBGfederalfunding• PrimaryadministeringagencyistheMississippiDevelopmentAuthority• HomeownerAssistanceGrantProgram,fundedat$3.2billion• PublicHousingProgram,fundedat$105million• RatepayerandWindPoolMitigationPrograms,fundedat$410million• GulfCoastRegionalInfrastructureProgram,fundedat$500million

119


• EconomicDevelopmentandCommunityRevitalizationProgram,fundedat$300million,underdiscus-sionwithHUD.

Texas• $503millioninhurricane-relatedCDBGfederalfunding• PrimaryadministeringagenciesaretheTexasDepartmentofHousingandCommunityAffairsandthe

OfficeofRuralCommunityAffairs• $74.5millionforhousing,infrastructure,publicservice,andpublicfacility• ThereisdiscussionandplanningwithHUDfornewallocations.

Florida• $182.9millioninhurricane-relatedCDBGfederalfunding• PrimaryadministeringagencyistheFloridaDepartmentofCommunityAffairs,DivisionofHousing

andCommunityDevelopment• $82.9millionforhousing,infrastructure,anddurableconstruction• ThereisdiscussionandplanningwithHUDfornewallocations.

Alabama• $95.6millioninhurricane-relatedCDBGfederalfunding• PrimaryadministeringagencyistheAlabamaDepartmentofEconomicandCommunityAffairs• $74.4millionforhousing,infrastructure,andeconomicdevelopment• ThereisdiscussionandplanningwithHUDfornewallocations.

Grant ActivitiesTheFederalCommunicationsCommission(FCC)hasannouncedthatitwilluse$211millionoffundsfromtheUniversalServiceFund(USF)toassistwithrecoveryeffortsintheGulfCoastarea.Thisincludes$51millioninUSFassistancefromthelow-incomeprogram.Amongitsefforts,theFCCwillprovidewire-lesshandsetsandapackageof300freeminutestopersonseligibleforFEMAdisasterassistanceandtopeopleintheaffectedareawithouttelephoneservice.PersonseligibleforFEMAdisasterassistancemayalsoreceivesupporttopaythecostsofreconnectingconsumerstoanetworkasthedisaster-struckareaisrebuilt.TheFCCOIGwillconductanaudittoidentifyareasofrisk,potentialvulnerabilities,andcompli-ancewithprogramrequirementsandregulationsasoutlinedbytheFCC’sKatrinareliefproposals.

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APPENDIX

D A T E D O c T O b E r 3 1 , 2 0 0 6

A

The following Web link will direct you to the Department of Justice Hurricane Katrina Fraud Task Force outlines the progress made by the non-OIG federal, state, and local law enforcement organizations, as of September 30, 2006.

To obtain this report, link to:http://www.usdoj.gov/katrina/Katrina_Fraud/docs/09-12-06AGprogressrpt.pdf

First Year Report to the Attorney General – September 2006 Office of the Hurricane Katrina Fraud Task Force Washington,

D.C. (September 30 , 2006)

�

First Year Report to the Attorney General

APPENDIX

B

This is Public Law 109-61, which originated from House Resolution 3645 to provide emergency funding to meet immediate needs arising from the consequences of Hurricane Katrina. This was an emergency supplemental appropriations act for the Fiscal Year ending September 30, 2005. H.R. 3645 became Public Law 109-61 on September 2, 2005.

Hurricane Recovery Funding– 1st Emergency Supplemental (FY 2005)

�

Hurricane Recovery Funding

�


H. R. 3645

One Hundred Ninth Congressof the

United States of America AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday, the fourth day of January, two thousand and five

An Act Making emergency supplemental appropriations to meet immediate needs arising

from the consequences of Hurricane Katrina, for the fiscal year ending September 30, 2005, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2005, namely:

DEPARTMENT OF HOMELAND SECURITY

EMERGENCY PREPAREDNESS AND RESPONSE

DISASTER RELIEF

For an additional amount for ‘‘Disaster Relief’’, $10,000,000,000, to remain available until expended: Provided, That the amount provided herein is designated as an emergency requirement pursu-ant to section 402 of H. Con. Res. 95 (109th Congress).

DEPARTMENT OF DEFENSE

OPERATION AND MAINTENANCE

OPERATION AND MAINTENANCE, DEFENSE-WIDE

(INCLUDING TRANSFER OF FUNDS)

For an additional amount for ‘‘Operation and Maintenance, Defense-Wide’’, $500,000,000 for emergency hurricane expenses, to support costs of evacuation, emergency repairs, deployment of per-sonnel, and other costs resulting from immediate relief efforts, to remain available until September 30, 2006: Provided, That the Secretary of Defense may transfer these funds to appropriations for military personnel, operation and maintenance, procurement, family housing, Defense Health Program, and working capital funds: Provided further, That funds transferred shall be merged with and be available for the same purposes and for the same time period as the appropriation or fund to which transferred: Providedfurther, That this transfer authority is in addition to any other transfer authority available to the Department of Defense: Providedfurther, That upon a determination that all or part of the funds transferred from this appropriation are not necessary for the pur-poses provided herein, such amounts may be transferred back to this appropriation: Provided further, That the Secretary of Defense

�


H. R. 3645—2

shall, not more than 5 days after making transfers from this appro-priation, notify the congressional defense committees in writing of any such transfer: Provided further, That the amount provided herein is designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress).

This Act may be cited as the ‘‘Emergency Supplemental Appro-priations Act to Meet Immediate Needs Arising From the Con-sequences of Hurricane Katrina, 2005’’.

Speaker of the House of Representatives.

Vice President of the United States andPresident of the Senate.

APPENDIX

C

This is Public Law 109-62, which originated from House Resolution 3673 to provide emergency funding to meet immediate needs arising from the consequences of Hurricane Katrina. This was an emergency supplemental appropriations act for the Fiscal Year ending September 30, 2005. H.R. 3673 became Public Law 109-62 on September 8, 2005.

Hurricane Recovery Funding– 2nd Emergency Supplemental (FY 2005)

�


�


H. R. 3673

One Hundred Ninth Congressof the

United States of America AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday, the fourth day of January, two thousand and five

An Act Making further emergency supplemental appropriations to meet immediate needs

arising from the consequences of Hurricane Katrina, for the fiscal year ending September 30, 2005, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2005, namely:

DEPARTMENT OF DEFENSE—MILITARY


OPERATION AND MAINTENANCE, DEFENSE-WIDE

(INCLUDING TRANSFERS OF FUNDS)

For an additional amount for ‘‘Operation and Maintenance, Defense-Wide’’, $1,400,000,000 for emergency hurricane expenses, to support costs of evacuation, emergency repairs, deployment of personnel, and other costs resulting from immediate relief efforts, to remain available until September 30, 2006: Provided, That the Secretary of Defense may transfer these funds to appropriations for military personnel, operation and maintenance, procurement, family housing, Defense Health Program, and working capital funds: Provided further, That not to exceed $6,000,000 may be transferred to ‘‘Armed Forces Retirement Home’’ for emergency hurricane expenses: Provided further, That funds transferred shall be merged with and be available for the same purposes and for the same time period as the appropriation or fund to which transferred: Provided further, That this transfer authority is in addition to any other transfer authority available to the Department of Defense: Provided further, That upon a determination that all or part of the funds transferred from this appropriation are not necessary for the purposes provided herein, such amounts may be transferred back to this appropriation: Provided further, That the Secretary of Defense shall, not more than 5 days after making transfers from this appropriation, notify the Committees on Appropriations in writing of any such transfer: Provided further, That the amounts provided herein are designated as an emergency requirement pursu-ant to section 402 of H. Con. Res. 95 (109th Congress).

�


H. R. 3673—2

DEPARTMENT OF DEFENSE—CIVIL

DEPARTMENT OF THE ARMY

CORPS OF ENGINEERS—CIVIL


For an additional amount for ‘‘Operation and Maintenance’’ for emergency expenses for repair of storm damage to authorized projects in the Gulf states affected by Hurricane Katrina, $200,000,000, to remain available until expended: Provided, That the Chief of Engineers, acting through the Assistant Secretary of the Army for Civil Works, shall provide, at a minimum, a weekly report to the Committees on Appropriations detailing the allocation and obligation of these funds, beginning not later than September 15, 2005: Provided further, That the amount provided herein is designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress).

FLOOD CONTROL AND COASTAL EMERGENCIES

For an additional amount for ‘‘Flood Control and Coastal Emer-gencies’’, as authorized by section 5 of the Flood Control Act of August 16, 1941 (33 U.S.C. 701), for emergency expenses for repair of damage to flood control and hurricane shore protection projects in the Gulf states caused by Hurricane Katrina, $200,000,000, to remain available until expended: Provided, That the Chief of Engineers, acting through the Assistant Secretary of the Army for Civil Works, shall provide, at a minimum, a weekly report to the Committees on Appropriations detailing the allocation and obligation of these funds, beginning not later than September 15, 2005: Provided further, That the amount provided herein is des-ignated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress).

DEPARTMENT OF HOMELAND SECURITY

EMERGENCY PREPAREDNESS AND RESPONSE

DISASTER RELIEF

(INCLUDING TRANSFERS OF FUNDS)

For an additional amount for ‘‘Disaster Relief’’, $50,000,000,000, to remain available until expended: Provided, That up to $100,000,000 may be transferred to and merged with ‘‘Emergency Preparedness and Response, Public Health Programs’’ for the National Disaster Medical System to support medical care as authorized by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (42 U.S.C. 300hh–11): Provided further, That $15,000,000 shall be transferred to and merged with ‘‘Departmental Management and Operations, Office of Inspector General’’ for necessary expenses of the Office of Inspector General for audits and investigations as authorized by law for Hurricane Katrina response and recovery activities: Pro-vided further, That the Secretary of Homeland Security shall pro-vide, at a minimum, a weekly report to the Committees on Appro-priations detailing the allocation and obligation of these funds,

�


H. R. 3673—3

beginning not later than September 15, 2005: Provided further,That the amounts provided herein are designated as an emergency requirement pursuant to section 402 of H. Con. Res. 95 (109th Congress).

GENERAL PROVISION

SEC. 101. For procurements of property or services determined by the head of an executive agency to be used in support of Hurri-cane Katrina rescue and relief operations—

(1) the emergency procurement authority in subsection 32A(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 428a(c)) may be used; and

(2) the amount specified in subsections (c), (d), and (f) of section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428) shall be $250,000. This Act may be cited as the ‘‘Second Emergency Supplemental

Appropriations Act to Meet Immediate Needs Arising From the Consequences of Hurricane Katrina, 2005’’.

Speaker of the House of Representatives.

Vice President of the United States andPresident of the Senate.

�


APPENDIX

Public Law 109-148 originated from House Resolution 2863, which provided emergency funding to meet immediate needs arising from the consequences of Hurricanes Katrina, Wilma, and Rita (2005). This was an emergency supplemental appropriations act for the Fiscal Year end-ing September 30, 2006. H.R. 2863 became Public Law 109-148 on December 30, 2005.

Hurricane Recovery Funding– 3rd Emergency Supplemental (FY 2006) D

To review the text for Emergency Supplemental 3, go to: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ148.109 (See page 119).

�


APPENDIX

E

Public Law 109-234 originated from House Resolution 4939, which provided emergency funding to meet continuing needs arising from the consequences of Hurricanes Katrina, Wilma, and Rita (2005). This is an emergency supplemental appropriations act for the Fiscal Year end-ing September 30, 2006. H.R. 4939 became Public Law 109-234 on June 15, 2006.

Hurricane Recovery Funding– 4th Emergency Supplemental (FY 2006)

To review the text for Emergency Supplemental 4, go to: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ234.109.pdf(see pages 27-63).

�


APPENDIX

FThis appendix provides information, as of June 20, 2006, on private donations from individuals, foundations, and corporations for relief and recovery efforts in response to Hurricanes Katrina and Rita. This information was research and prepared by the Center of Philanthropy at Indiana University and Giving USA.

Private Donations for Hurricane Katrina and Rita Victims

�

Private Donations for Hurricanes Katrina and Rita Victims

�


Source: Giving USA and the University of Indiana Center for Philanthropy

Estimated giving for disasters compared with

known receipts at charitable organizations, 2005

Billions of dollars

Katrina

5.30

Katrina

3.51

Tsunami

1.92

Tsunami

1.76

Earthquake

0.15

Earthquake

0.07

Estimated giving by disaster Gifts received, per organizations reporting

Katrina Tsunami EarthquakeTotal: $7.37 Total: $5.34

Gifts received does not include receipts at

organizations that did not provide information,

including many congregations and religious

organizations and many public agencies such as

schools, libraries, and government offices.

�


APPENDIX

GThis appendix provides the Federal Emergency Management Agency’s Hurricane financial profile, by program area, for each of the 2005 hurricanes: Katrina, Rita, and Wilma.

Hurricane Financial Profiles by Program Area

�

Appendix G • Hurricane Financial Profiles by Program Area

�


HU

RR

ICA

NE

KA

TRIN

A F

INA

NC

IAL

PR

OFI

LE (

AS

OF

09

-27

-20

06)

Pro

gra

m A

rea

Pro

gra

m N

ame

Allo

cati

ons

Un-

Ob

ligat

ed

Co

mm

itm

ents

Ob

ligat

ions

Un-

Ob

ligat

edA

lloca

tio

ns(c

)U

n-Li

qui

dat

edO

blig

atio

nsE

xpen

dit

ures

Allo

cati

on

Ava

ilab

le

1-H

UM

AN

SE

RV

ICE

S25

03 –

Une

mpl

oym

ent

423,

459,

491

-41

0,18

3,39

913

,276

,092

12,5

9341

0,17

0,80

613

,276

,092

2504

– c

risi

s c

ouns

elin

g –

NIM

H70

,531

,403

-43

,035

,862

27,4

95,5

419,

554,

648

33,4

81,2

1427

,495

,541

2576

– L

egal

Ser

vice

s34

8,07

380

,316

265,

610

82,4

6313

8,34

412

7,26

72,

147

2592

– I

nspe

ctio

ns23

6,14

6,21

419

,610

,366

237,

404,

040

(1,2

57,8

26)

100,

330,

936

137,

073,

104

(20,

868,

192)

4149

– O

ther

Nee

ds A

ssis

tanc

e1,

858,

789,

314

-1,

814,

678,

793

44,1

10,5

2112

,089

,044

1,80

2,58

9,74

944

,110

,521

414X

– H

ousi

ng A

ssis

tanc

e 4,

125,

365,

741

5,88

34,

123,

166,

540

2,19

9,20

116

,004

,827

4,10

7,16

1,71

32,

193,

318

4152

– c

risi

s c

ouns

elin

g –

Sc

c40

,720

,750

-40

,151

,560

569,

190

16,0

56,1

6824

,095

,392

569,

190

Imm

edia

te N

eeds

Ass

ista

nce

--

277,

910

(277

,910

)27

7,91

0-

(277

,910

)

Man

ufac

ture

d H

ousi

ng7,

552,

375,

914

738,

245,

945

6,76

3,95

9,95

378

8,41

5,96

11,

503,

917,

743

5,26

0,04

2,21

050

,170

,016

Tota

l14

,307

,736

,900

757,

942,

510

13,4

33,1

23,6

6787

4,61

3,2

33

1,6

58

,38

2,2

13

11

,77

4,7

41

,45

51

16

,67

0,7

23

2-IN

FRA

STR

UC

TUR

E25

94 –

Ins

pect

ions

943,

203,

029

273,

960,

790

667,

908,

250

275,

294,

779

336,

243,

822

331,

664,

428

1,33

3,98

9

416X

– P

ublic

Ass

ista

nce

6,15

4,43

2,12

4 6,

075,

752,

992

78,6

79,1

323,

019,

647,

280

3,05

6,10

5,71

378

,679

,132

Tota

l7,

097,

635,

153

273,

960,

790

6,74

3,66

1,24

235

3,97

3,9

11

3,3

55

,89

1,1

02

3,3

87

,77

0,1

40

80

,01

3,1

21

3-M

ITIG

ATI

ON

2593

– I

nspe

ctio

ns32

,722

,196

4,77

8,53

624

,362

,095

8,36

0,10

114

,646

,689

9,71

5,40

73,

581,

565

4173

– H

azar

d M

itig

atio

n23

,208

,933

-23

,208

,933

-21

,741

,306

1,46

7,62

7-

Tota

l55

,931

,129

4,77

8,53

647

,571

,028

8,36

0,1

01

36

,38

7,9

95

11

,18

3,0

34

3,5

81

,56

5

4-O

PE

RA

TIO

NS

2507

– M

issi

ons

– TA

26,1

78,8

56-

24,6

87,2

561,

491,

600

20,9

85,6

693,

701,

587

1,49

1,60

0

2508

– M

issi

ons

– D

FA4,

614,

828,

917

-4,

605,

328,

916

9,50

0,00

13,

220,

360,

744

1,38

4,96

8,17

29,

500,

001

Tota

l4,

641,

007,

773

4,63

0,01

6,17

210

,991

,60

13

,24

1,3

46

,41

31

,38

8,6

69

,75

91

0,9

91

,60

1

5-A

DM

INIS

TRA

TIO

N11

XX

– S

alar

ies

& b

enefi

ts44

2,67

1,95

1-

422,

162,

801

20,5

09,1

50-

422,

162,

801

20,5

09,1

50

21X

X –

Tra

vel

222,

445,

788

2,86

4,42

121

7,04

1,80

35,

403,

985

11,6

14,7

8620

5,42

7,01

72,

539,

564

22X

X –

Tra

nspo

rtat

ion

45,7

74,3

3521

8,28

341

,953

,267

3,82

1,06

85,

200,

114

36,7

53,1

533,

602,

785

23X

X –

ren

t, c

omm

, Uti

litie

s30

3,64

7,62

526

,671

,808

278,

500,

179

25,1

47,4

4761

,770

,566

216,

729,

613

(1,5

24,3

61)

24X

X –

Pri

nt &

rep

ro5,

659,

608

375,

836

5,07

9,44

458

0,16

52,

791,

462

2,28

7,98

120

4,32

9

2501

– M

issi

ons

– F

OS

2,18

9,30

5,83

3-

2,18

1,33

7,11

57,

968,

718

1,51

9,95

5,38

566

1,38

1,73

07,

968,

718

25X

X –

Oth

er S

ervi

ces

2,01

7,59

5,75

923

5,31

6,81

11,

742,

009,

102

275,

586,

657

636,

858,

857

1,10

5,15

0,24

640

,269

,846

26X

X –

Sup

plie

s &

Mat

eria

ls54

7,15

2,93

017

,154

,623

519,

905,

582

27,2

47,3

4811

5,88

8,84

540

4,01

6,73

610

,092

,725

31X

X –

Equ

ipm

ent

212,

946,

356

10,3

93,6

1919

8,14

1,13

614

,805

,220

21,7

41,0

7717

6,40

0,05

94,

411,

601

32X

X –

Lan

d &

Str

uctu

res

11,9

45,4

662,

360,

461

9,30

1,58

92,

643,

877

510,

778

8,79

0,81

128

3,41

6

4101

– U

rban

Sea

rch

& r

escu

e75

,195

,470

-75

,195

,469

140

,975

,119

34,2

20,3

501

Tota

l6,

074,

341,

121

295,

355,

862

5,69

0,62

7,48

738

3,71

3,6

36

2,4

17

,30

6,9

89

3,2

73

,32

0,4

97

88

,35

7,7

73

GR

AN

D T

OTA

L32

,176

,652

,076

1,33

2,03

7,69

830

,544

,999

,596

1,63

1,65

2,4

82

10

,70

9,3

14

,71

21

9,8

35

,68

4,8

85

29

9,6

14

,78

3

�


HU

RR

ICA

NE

RIT

A F

INA

NC

IAL

PR

OFI

LE (

AS

OF

09

-27

-20

06

)

Pro

gra

m A

rea

Pro

gra

m N

ame

Allo

cati

ons

Un-

Ob

ligat

ed

Co

mm

itm

ents

Ob

ligat

ions

Un-

Ob

ligat

edA

lloca

tio

ns(c

)U

n-Li

qui

dat

edO

blig

atio

nsE

xpen

dit

ures

Allo

cati

on

Ava

ilab

le

1-H

UM

AN

SE

RV

ICE

S25

03 –

Une

mpl

oym

ent

23,1

67,4

96-

21,5

45,4

211,

622,

075

-21

,545

,421

1,62

2,07

5

2504

– c

risi

s c

ouns

elin

g –

NIM

H3,

855,

225

-3,

855,

225

-2,

308,

237

1,54

6,98

8-

2576

– L

egal

Ser

vice

s-

--

--

--

2592

– I

nspe

ctio

ns10

4,91

4,47

030

,808

104,

883,

467

31,0

0344

,026

,839

60,8

56,6

2819

5

4149

– O

ther

Nee

ds A

ssis

tanc

e10

6,80

0,50

0-

106,

800,

000

500

1,75

1,67

510

5,04

8,32

550

0

414X

– H

ousi

ng A

ssis

tanc

e 91

5,29

1,54

8-

915,

285,

649

5,89

93,

634,

361

911,

651,

288

5,89

9

4152

– c

risi

s c

ouns

elin

g –

Sc

c1,

557,

215

-1,

557,

215

-1,

330,

840

226,

375

-

4154

– O

ther

Nee

ds A

ssis

tanc

e72

,880

,000

-71

,880

,000

1,00

0,00

01,

247,

859

70,6

32,1

411,

000,

000

Man

ufac

ture

d H

ousi

ng18

9,02

3,02

97,

185,

165

157,

014,

666

32,0

08,3

6341

,554

,679

115,

459,

987

24,8

23,1

98

Tota

l1,

417,

489,

483

7,21

5,97

31,

382,

821,

643

34,6

67

,84

09

5,8

54

,49

01

,28

6,9

67

,15

32

7,4

51

,86

7

2-IN

FRA

STR

UC

TUR

E25

94 –

Ins

pect

ions

30,4

02,9

009,

735,

063

20,5

25,0

589,

877,

842

3,31

9,39

517

,205

,663

142,

779

416X

– P

ublic

Ass

ista

nce

737,

783,

137

-73

4,61

3,99

63,

169,

141

283,

073,

105

451,

540,

891

3,16

9,14

1

Tota

l76

8,18

6,03

79,

735,

063

755,

139,

054

13,0

46

,98

32

86

,39

2,5

00

46

8,7

46

,55

43

,31

1,9

20

3-M

ITIG

ATI

ON

2593

– I

nspe

ctio

ns16

,324

,974

558,

068

12,1

61,9

434,

163,

031

9,12

2,75

93,

039,

185

3,60

4,96

3

4173

– H

azar

d M

itig

atio

n28

,487

,238

-28

,487

,238

-28

,330

,054

157,

184

-

Tota

l44

,812

,212

558,

068

40,6

49,1

814,

163

,03

13

7,4

52

,81

33

,19

6,3

69

3,6

04

,96

3

4-O

PE

RA

TIO

NS

2507

– M

issi

ons

– TA

750,

000

-75

0,00

0-

455,

371

294,

629

-

2508

– M

issi

ons

– D

FA66

1,07

7,80

0-

659,

747,

600

1,33

0,20

033

5,25

5,15

232

4,49

2,44

81,

330,

200

Tota

l66

1,82

7,80

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�


APPENDIX

HThis appendix provides useful website links, related to hurricane relief and recovery activities mentioned in this report.

Useful Website Links

�


�


Useful Links for Hurricane Recovery and Oversight:Hurricane Contracting Information Center (Dept. of Commerce)http://www.rebuildingthegulfcoast.gov/

Department of Education – Hurricane Help for Schools http://hurricanehelpforschools.gov/index.html Department of Homeland Security (OIG) Katrina Oversight Pagehttp://www.dhs.gov/dhspublic/interapp/editorial/copy_(2)_of_editorial_0602.xml

Department of Homeland Security (Emergency and Disasters)http://www.dhs.gov/interweb/assetlibrary/katrina.htm

Department of Housing and Urban Development (OIG)http://www.hud.gov/offices/oig/hotline/index.cfm

Department of Justice Katrina Fraud Task Forcehttp://www.usdoj.gov/katrina/Katrina_Fraud/

Department of Justice Katrina Fraud Task Force Progress Report 9/30/06 http://www.usdoj.gov/katrina/Katrina_Fraud/docs/09-12-06AGprogressrpt.pdf FBI Katrina/Rita Information Pagehttp://www.fbi.gov/katrina.htm#vgn-hurricane-katrina-fraud-task-force-vgn

Department of Transportation: Status of Transportation-Related Recovery Effortshttp://www.nhtsa.dot.gov/USDOTreliefSite

Roadway Information Related to Hurricanes Rita and Katrina (DOT)http://www.fhwa.dot.gov/trafficinfo/katrina.htm

Environmental Protection Agency - Disaster Responsehttp://www.epa.gov/katrina/index.html

PCIE/ECIE http://www.ignet.gov/pande/hsr/oigplanoverview.pdf

PCIE/ECIE: Hurricane Relief Oversighthttp://www.ignet.gov/pande/hsr1.html#relief

Small Business Administration: Disaster Recovery http://www.sba.gov/disaster_recov/index.html

�


SBA Office of Inspector General (e.g., to obtain copies of reports mentioned in the SAR)http://www.sba.gov/ig

White House: Hurricane Recovery, Rebuilding the Gulf Coast Region http://www.whitehouse.gov/infocus/hurricane

NON-FEDERAL SITES

Center for Philanthropy, Indiana University (Katrina and Rita private donations)http://www.philanthropy.iupui.edu/Hurricane_Katrina.html

Alabama Department of Economic and Community Affairshttp://www.adeca.alabama.gov/

Florida: Department of Community Affairshttp://www.floridacommunitydevelopment.org State of Louisiana: Hurricane Informationhttp://katrina.louisiana.gov/

State of Louisiana: Office of Community Development, Disaster Recovery Unithttp://www.state.la.us/cdbg/drhome.htm

LouisianaRebuilds: Louisiana Non-Partisan Public-Private Partnership for Louisiana residents affected by Hurricanes Katrina and Ritahttp://www.louisianarebuilds.info/

Louisiana Recovery Authorityhttp://www.lra.louisiana.gov/

Louisiana Recovery Authority: Louisiana Long-Term Recovery Planninghttp://www.louisianaspeaks.org Louisiana Disaster Recovery Unithttp://www.state.la.us/cdbg/drhome.htm

Mississippi Development Authorityhttp://www.mshomehelp.gov

Mississippi: Hurricane Katrina Homeowner’s Grant Programhttp://www.mshomehelp.gov

Texas: Department of Housing and Community Affairshttp://www.tdhca.state.tx.us

APPENDIX

This appendix provides the contact information for all 22 PCIE/ECIE members who contributed to this semi-annual report.

PCIE/ECIE Contributing Members I

�

PCIE/ECIE Contributing Members

�


DEPARTMENT OF HOMELAND SECURITY (DHS) richard L. Skinner, Inspector General245 Murray Dr. SWbuilding 410Washington, Dc 20528(202) 254-4100Web site: http://www.dhs.gov/dhspublic/interapp/editorial/editorial 0330.xmlHotline: (800) 323-8603

DEPARTMENT OF COMMERCE (DOC) Johnnie E. Frazier, Inspector General14th and constitution Avenue, NW HcHb 7898-cWashington, Dc 20230(202) 482-4661Web site: http://www.oig.doc.gov/oigHotlines: (202) 482-2495 (800) 424-5197Hearing impaired: (800) 854-8407

DEPARTMENT OF DEFENSE (DOD) Thomas S. Gimble, Acting Inspector General400 Army Navy Drive Arlington, VA 22202(703) 604-8300Web site: http://www.dodig.milHotlines: (703) 604-8569 (800) 424-9098Hotline Web site: www.dodig.mil/HOTLINE/fwa-compl.htm

DEPARTMENT OF ENERGY (DOE) Gregory H. Friedman, Inspector General1000 Independence Avenue, SWWashington, Dc 20585(202)586-4393Fax: (202) 586-4902Web site: http://www.ig.energy.govHotlines: (202) 586-4073 (800) 541-1625Hotline email: www.ig.energy.gov/hotline.htm

DEPARTMENT OF THE INTERIOR (DOI) Earl E. Devaney, Inspector General1849 c Street, NW Washington, Dc 20240(202) 208-5745Web site: http://www.oig.doi.govHotline: (800) 424-5081

DEPARTMENT OF JUSTICE (DOJ) Glenn A. Fine, Inspector General950 Pennsylvania Avenue, NW, room 4706 Washington, Dc 20530(202) 514-3435Web site: http://www.usdoj.gov/oig Hotline: (800) 869-4499Hotline e-mail: [email protected]

DEPARTMENT OF LABOR (DOL) Gordon S. Heddell, Inspector General200 constitution Avenue, NW, room S5502Washington, Dc 20210(202) 693-5100Web site: http://www.oig.dol.govHotlines: (202) 693-6999 (800) 347-3756

PCIE/ECIE Contributors to the Semi-annual Report (Updated 9/30/06)

�


DEPARTMENT OF TRANSPORTATION (DOT) Todd J. Zinser, Acting Inspector General400 7TH Street, SW, room 9210 Washington, Dc 20590(202) 366-1959Web site: http://www.oig.dot.govHotlines: (202) 366-1461 (800) 424-9071

DEPARTMENT OF VETERANS AFFAIRS (VA) George Opfer, Inspector General810 Vermont Avenue, NW Washington, Dc 20420(202) 565-8620Web site: http://www.va.gov/oigHotline: (800) 488-8244Hotline e-mail: [email protected]

DEPARTMENT OF EDUCATION (ED) John P. Higgins, Jr., Inspector General400 Maryland Avenue, SW Washington, Dc 20024(202) 245-6900Web site: http://www.ed.gov/about/offices/list/oigHotline: 800-MIS-USEDHotline e-mail: [email protected]

ENVIRONMENTAL PROTECTION AGENCY (EPA) bill A. roderick, Acting Inspector General1200 Pennsylvania Avenue, NW Mailcode 2410TWashington, Dc 20460(202) 566-0847Web site: http://www.epa.gov/oigHotlines: (202) 566-2476 (888) 546-8740Hotline e-mail: [email protected]

FEDERAL COMMUNICATIONS COMMISSION (FCC) Kent r. NilssonActing Inspector GeneralFederal communications commission445 12th Street, S.W., room 2-c762Washington, Dc 20554Phone: (202) 418-0476Fax: (202) 418-2811E-Mail: [email protected]

GENERAL SERVICES ADMINISTRATION (GSA) brian D. Miller, Inspector General18th and F Streets, NW Washington, Dc 20405(202) 501-0450Web site: http://oig.gsa.govHotlines: (202) 501-1780 (800) 424-5210

DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) Daniel Levinson, Inspector General330 Independence Avenue, SW, room 5250Washington, Dc 20201(202) 619-3148Web site: http://oig.hhs.govHotline: (800) 447-8477Hotline e-mail: [email protected]

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) Kenneth M. Donohue, Inspector General451 Seventh Street, SW Washington, Dc 20410(202) 708-0430Web site: http://www.hud.gov/offices/oigHotline: (800) 347-3735

�


NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) robert W. cobb, Inspector General300 E Street, NW, room 8U70 Washington, Dc 20546(202) 358-1220Web site: http://oig.nasa.gov Hotline: (800) 424-9183 Hotline Web site: http://oig.nasa.gov/cyberhotline.html

SMALL BUSINESS ADMINISTRATION (SBA) Eric M. Thorson, Inspector General409 Third Street, SW Washington, Dc 20416(202) 205-6586Web site: http://www.sba.gov/IGHotline: (800) 767-0385

SOCIAL SECURITY ADMINISTRATION (SSA) Patrick P. O’carroll, Jr., Inspector Generalroom 300, Altmeyer building 6401 Security boulevardbaltimore, MD 21235(410) 966-8385Web site: http://www.ssa.gov/oigHotline: (800) 269-0271

TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION (TIGTA) J. russell George, Inspector General1125 15th Street, NW Washington, Dc 20005(202) 622-6500Web site: http://www.treas.gov/tigtaHotline: (800) 366-4484

U.S. TREASURY (TREAS) Harold Damelin, Inspector General1500 Pennsylvania Avenue NW Washington, Dc 20220(202) 622-1090Web site: http://www.ustreas.gov/inspector-general/Hotline: (800) 359-3898

DEPARTMENT OF AGRICULTURE (USDA) Phyllis K. Fong, Inspector General1400 Independence Avenue, SW room 117-W, Jamie L. Whitten buildingWashington, Dc 20250(202) 720-8001Web site: http://www.usda.gov/oigHotlines: (202) 690-1622 (800) 424-9121Hearing impaired: (202) 690-1202

U.S. POSTAL SERVICE (USPS)Dave Williams, Inspector General1735 North Lynn Street Arlington, VA 22209-2005(703) 248-2300Web site: http://www.uspsoig.govHotline: (888) 877-7644

*To date, some Offices of Inspector General and their departments and agencies have not received any hurricane relief-related funding or only a small portion of the funds; therefore, future efforts of these OIGs will depend on the amount of money received and how those funds are used.

�


APPENDIX

This appendix provides a list of hurricane recovery PCIE/ECIE OIG congressional activities.

OIG Congressional Activities J

A S O F S E P T E M b E r 3 0 , 2 0 0 6

�

OIG Congressional Activities

�


HURRICANE RECOVERY OIG CONGRESSIONAL ACTIVITIES (AS OF SEPTEMbER 30, 2006)

Date Committee/Subcommittee Type Subject Departments

9/7/06Senate Appropriations Subcommittee on Homeland Security

Hearingrisk Management and Preparedness and Lessons Learned from Katrina

DHS

8/28/06House Appropriations Subcommittee on Homeland Defense

briefingHurricane recovery Oversight

DHS

8/15/06

House Government reform Subcommittee on Government Efficiency and Financial Management

briefingHurricane recovery Prompt Payment Issues

DHS

7/27/06Senate committee on Environment and Public Works

Hearing Stafford Act reviewDHS, USAcE, EPA

7/27/06House committee on Government reform

Hearing DHS Acquisition Process DHS, GAO

6/27/06House Appropriations Subcommittee on Survey and Investigations


DHS

6/26/06House committee on Homeland Security


DHS

6/14/06House committee on Homeland Security

HearingHearing: Waste, Fraud, and Abuse in the Aftermath of Hurricane Katrina

DHS, GAO,US red cross

5/25/06

House Armed Services Subcommittee on Terrorism, Unconventional Threats, and capabilities

HearingDoD Preparedness for Hurricanes

DoD, USA, USAF


Hearing2006 Hurricane Season and Preparedness

DHS, DoD, DOc, HHS

5/18/06House Appropriations Subcommittee on Survey and Investigations


DHS

5/10/06

House Government reform Subcommittee on Government Management, Finance, and Accountability

Hearing

After Katrina: role of DoJ Katrina Fraud Task Force and Agency IGs in Preventing Waste, Fraud, and Abuse

HUD


HearingKatrina, contracting and Legal Issues

DHS, GAO, DHS, GSA, USAcE

�


5/3-4/06House Energy and commerce Subcommittee on Oversight and Investigations

briefingsHurricane recovery Oversight

DHS

4/23-26/06

House Government reform Subcommittee on Government Management, Finance, and Accountability

cODELGulf coast tour, IG and Katrina Task Force briefings.

DHS, DOJ

4/21/06Senate committee on Homeland Security and Government Affairs

Field Hearing

FEMA’s Manufactured Housing Program: Haste Makes Waste,” Hope, Ar

DHS

4/10/06

Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, and International Security

HearingKatrina and contracting: blue roof, Debris removal, Travel Trailer case Studies

DHSUSAcE, AAA,DoD

3/30/06Senate Special committee on Aging

Study Assigned

Evacuating Nursing Homes During a Disaster

HHS

3/22/06Senate Homeland Security and Governmental Affairs committee

Staff briefing

OIG’s Performance review of FEMA’s Disaster Management Activities in response to Katrina

DHS

3/8/06Senate committee on Homeland Security and Governmental Affairs

HearingImproving the Nation’s Disaster response System

Senator Mikulski,DHS, GAO

3/8/06Senate Appropriations committee

Hearing

Additional $4.2 billion in community Development block Grant funds for Louisiana; additional $202 million for the Disaster Voucher Program

HUD

2/15/06Senate committee on banking, Housing, and Urban Affairs

Hearing

Mortgage Assistance, community Development block Grants, rental & Fair Housing Assistance

HUD, FEMA,FDIc, SbA,DHS

�


2/13/06Senate committee on Homeland Security and Government Affairs

HearingHurricane Katrina: Waste, Fraud, and Abuse Worsen the Disaster

DHS, DOJ,GAO

11/2/05

House Select bipartisan committee to Investigate Preparation for and response to Hurricane Katrina

HearingThe role of federal agency contracting in disaster preparedness and response.

DHS, FEMA,USAcE, GAO

10/6/05House Appropriations Subcommittee on Homeland Security

Hearing Katrina Oversight DHS

10/6/05

House Transportation and Infrastructure Subcommittee on Economic Development, Public buildings, and Emergency Management

Hearingrecovering After Katrina: Ensuring that FEMA is up to the Task

DHS

9/28/05House Energy and commerce Subcommittee on Oversight and Investigations

HearingOIG Oversight Plans regarding Hurricane Katrina relief and recovery

DHS, DOc,DoD, DOE,EPA, Fcc, GAO, HHS

Source: PCIE/ECIE, September 30, 2006, semiannual data call to Congress and federal agencies.

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APPENDIX

This appendix presents the audit model provided to federal agencies in October 2005 to help coordinate oversight work. The model uses a program-by-program focus based on post-disaster time phasing.

This appendix also includes the investigations coordination model provided to federal agencies in October 2005 to help coordinate over-sight of federal, state, and local law enforcement actions and establish information sharing among all agencies.

PCIE/ECIE Oversight Audit and Investigative Models K

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PCIE/ECIE Oversight Audit and Investigative Models

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APPENDIX

LGlossary

In this Appendix is a list of frequently used terms.

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Glossary

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Glossary

GlossaryALLOCATIONSAllocations refer to funds that are set aside for declarations based on estimated needs for the next 30 days or fewer.

APPORTIONMENTApportionment refers to the Office of Management and budget’s distribution of amounts available for obli-gation in an appropriation or fund account. Apportionments divide amounts available by specific time peri-ods (usually quarters, now tri-annum), activities, projects, objects, or a combination thereof. The amounts apportioned are a large limitation on the amount of obligations that may be incurred. The apportionment process is intended to prevent obligation of funds in a manner that would require supplemental or defi-ciency appropriations and to achieve the most effective and economical use of amounts made available for obligation.

APPROPRIATIONSAppropriations refer to the funding authority approved by the congress and signed by the President to expend a given amount of funds to carry out federal programs. The Appropriations Act specifies an amount of funding in each appropriation (fund) account of an agency. There are several types of appropriations:• One-year—available for incurring obligations only during a specified fiscal year• Multiple-year—available for incurring obligations for a definite period in excess of one fiscal year• No-year—available for incurring obligations for an indefinite period of time until the objectives have

been accomplished• Unexpired—available for incurring obligations during the current fiscal year and which authority has

not expired• Expired—the appropriation is no longer available for obligation, but it is still available for disbursement

to pay existing obligations• Definite—refers to the amount stated in the Appropriations Act as a specific sum of money• Indefinite—refers to an amount that is not stated in the Appropriations Act as a specific sum of money

but can be determined only at some future date, such as an appropriation of the receipts from a certain source

• Permanent—automatically made each year over a period of time by virtue of standing legislation, with-out annual action by congress

• current—requires periodic action by congress, usually annually, in or immediately preceding the fiscal year.

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Glossary

AUTHORIzING LEGISLATIONAuthorizing legislation enacted by congress establishes or continues the legal operation of a federal pro-gram or agency, either indefinitely or for a specific period of time, or sanctions a particular type of obliga-tion or expenditure within a program. Authorizing legislation is sometimes referred to as substantive legisla-tion.

Authorizing legislation is normally a prerequisite for appropriations. It may place a limit on the amount of budget authority to be included in appropriations acts, or it may authorize the appropriation of “such sums as may be necessary.” In some instances, authorizing legislation may provide authority to incur debts or to mandate payment to particular persons or political subdivisions of the country.

bUDGET AUTHORITYbudget authority is the amount of money that the law allows an agency to commit to be spent in current or future years. An agency may choose not to spend its total budget authority in a fiscal year, but it may not exceed its budget. budget authority is what permits a department to expend funds or commit the govern-ment to a contract.

CASE DISPOSITIONcase disposition refers to the status of a case: resolved, open or closed. The term “resolved” generally means that the component agrees with the recommendation and the OIG agrees with the planned correc-tive action. The term “closed” generally means that the action the component has taken adequately ad-dresses the recommendation.

COMMITMENTScommitments are funds reserved in the financial system based on specific requisitions in anticipation of their obligation.

DIRECT DISASTER PROGRAMS, DISASTER SUPPORT PROGRAMSDirect disaster programs provide resources to specifically address the short-, medium-, and long-term consequences of declared disasters, emergencies, and fire management assistance grants that affect both individuals and communities. Direct disaster programs also include predeclaration activity (e.g., preposi-tioning equipment and people before a hurricane strikes).

Disaster support programs allow the Federal Emergency Management Agency to maintain critical, ongo-ing disaster operations and support infrastructure that enables the timely delivery of all FEMA disaster as-sistance programs. The resources for disaster support programs encompass ongoing operational capabilities that are not readily attributable to any one specific declared disaster.

ExPENDITURESThe actual spending of money is different from the appropriation of funds. congress first makes the appro-priations; then the disbursing officers of the administration make expenditures, that is, spend money. The two amounts are rarely identical in any fiscal year. In addition to some current budget authority, expendi-tures may represent budget authority made available one, two, or more years earlier.

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Glossary

HAzARD MITIGATIONAgencies conduct long-term hazard mitigation measures after a major disaster declaration. The purpose of the program is to reduce the loss of life and property due to natural disasters and to enable mitigation measures to be implemented during the immediate recovery from a disaster.

HUMAN SERVICES CATEGORIESThere are six categories of human services, including:• Unemployment. Disaster unemployment assistance is offered to individuals who are unemployed as a

result of a President-declared disaster and not covered by any other unemployment compensation.• crisis counseling. Professional counseling services (including financial assistance to state or local agen-

cies or private mental health organizations to provide such services or train disaster workers) are avail-able to victims of major disasters in order to relieve mental health problems caused or aggravated by a major disaster or its aftermath. The Stafford Act states: “Provides immediate, short-term crisis counsel-ing services to victims of Presidentially declared disasters.”

• Legal services. The Young Lawyers Division of the American bar Association, through an agreement with FEMA, provides legal advice for low-income individuals regarding cases that will not produce a fee. (See also the Stafford Act at http://www.fema.gov/about/stafact.shtm)

• Inspections. Physical inspections are conducted to assess disaster damage. • Other needs assistance (ONA). Medical, dental, funeral, personal property, transportation, moving and

storage, Group Flood Insurance, and other disaster-related needs may be provided, with a total cap for Individual Assistance of $26,200 per applicant. Funding is on a federal-state cost-share basis, with FEMA’s share at 75 percent, and the state share at 25 percent. Some ONA depends on an applicant’s loan-repayment ability.

• Housing assistance. Lodging expenses reimbursement (for a hotel or motel), rental assistance, home re-pair cash grant (up to $5,200) and home replacement cash grants up to $10,500, may be provided, with a total cap for Individual Assistance of $26,200 per applicant. When rental properties are unavailable, direct assistance may be in the form of a government-provided housing unit.

INDIVIDUAL FEDERAL DISASTER ASSISTANCEThere are six categories of human services, including:• Temporary Housing (a place to live for a limited period of time): Money is available to rent a

different place to live, or a government provided housing unit when rental properties are not available. • Repair: Money is available to homeowners to repair damage from the disaster to their primary resi-

dence that is not covered by insurance. The goal is to make the damaged home safe, sanitary, and func-tional.

• Replacement: Money is available to homeowners to replace their home destroyed in the disaster that is not covered by insurance. The goal is to help the homeowner with the cost of replacing their de-stroyed home.

• Permanent Housing Construction: Direct assistance or money for the construction of a home. This type of help occurs only in insular areas or remote locations specified by FEMA, where no other type of housing assistance is possible

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Glossary

OTHER THAN HOUSING NEEDSMoney is available for necessary expenses and serious needs caused by the disaster. This includes:• Disaster-related medical and dental costs.• Disaster-related funeral and burial cost.• clothing; household items (room furnishings, appliances); tools (specialized or protective clothing and

equipment) required for one’s job; necessary educational materials (computers, school books, supplies).• Fuels for primary heat source (heating oil, gas, firewood).• clean-up items (wet/dry vacuum, air purifier, dehumidifier).• Disaster damaged vehicle.• Moving and storage expenses related to the disaster (moving and storing property to avoid additional

disaster damage while disaster-related repairs are being made to the home).• Other necessary expenses or serious needs as determined by FEMA.• Other expenses that are authorized by law.

MISSION ASSIGNMENTS Through mission assignments, FEMA tasks and reimburses other federal agencies for providing services under the Stafford Act. There are three categories of mission assignments.• Technical assistance (TA), where other federal agencies provide expertise to states; 100 percent of this

assistance is federally funded; and there is no state cost share.

• Direct federal assistance (DFA), where the state requests the assistance; the assistance is subject to state cost share (unless waived in response time frame); and goods and services are provided to the state to save lives and protect property.

• Federal operations support (FOS), where 100 percent of the assistance is federally funded; there is no state cost share; and there is Fed-to-Fed field operations support. This category reflects agreements with federal agencies to perform services, such as providing search-and-rescue operations; providing health and medical support; assisting with disease prevention and control; transporting disaster victims; and delivering food, water, and other essential commodities to disaster victims.

ObLIGATIONSObligations refer to orders placed, contracts awarded, services received, and similar transactions during a given period that will require payments during the same or future period. These amounts include outlays for which obligations have not been previously recorded, and reflect adjustments for differences between obligations previously recorded and actual outlays to liquidate those obligations.

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Glossary

STAFFORD ACTThe robert T. Stafford Disaster relief and Emergency Assistance Act (the Stafford Act) authorizes the President to issue a major disaster declaration to accelerate the delivery of a wide range of federal aid to states that are overwhelmed by hurricanes or other catastrophes. Financing for the aid is appropriated to the Disaster relief Fund (DrF), which is administered by the Department of Homeland Security. Funds appropriated to the DrF remain available until they are expended (a “no-year” account). The Stafford Act authorizes temporary housing, grants for immediate needs of families and individuals, the repair of public infrastructure, emergency communications systems, and other forms of assistance.

because the Stafford Act provides the President with permanent authority to direct federal aid to strick-en states, congress does not need to enact new legislation to meet immediate needs. congress appropriat-ed more than $10 billion to the Disaster relief Fund in FY 2005, largely in response to the four hurricanes that struck Florida in the fall of 2004. The appropriations legislation for FY 2006 includes approximately $2 billion for the DrF in both the House and Senate versions of H.r. 2360 that was in conference at the time Hurricane Katrina struck. congress can elect to consider supplemental appropriations should addi-tional money be required to meet the requests for assistance. See: http://www.fema.gov/about/stafact.shtm

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Glossary

APPENDIX

MAcronyms and Definitions

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Acronyms and Definitions

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AcronymsAcronym Definition

AAA Army Audit Agency

AcF Administration for children and Families

AFAA Air Force Audit Agency

AIG Airport Improvement Grant

AoA Administration on Aging

APHIS Animal and Plant Health Inspection Service

Arc Appalachian regional commission

bIA bureau of Indian Affairs

bJA bureau of Justice Assistance

bOP bureau of Prisons

bPA basic Purchasing Agreement

burec bureau of reclamation

cAS customer Account Services

ccb child care bureau

ccc commodity credit corporation

ccr central contractor registration

cDbG community Development block Grant

cDcP centers for Disease control and Prevention

cDP Office of community Development

cIA central Intelligence Agency

cMS centers for Medicare and Medicaid

cMS centers for Medicare and Medicaid Services

cNcS corporation for National and community Service

cOOP continuity of Operations Plan

cOTr contracting Officer Technical representative

DADDP Dead Animal Debris Disposal Program

DAO Disaster Area Office

DAPDc Disaster Assistance Processing and Disbursement center

DbA Davis-bacon Act

DcAA Defense contract Audit Agency

DcIS Defense criminal Investigative Service

DcMS Disaster credit Management System

DFA Direct Federal Assistance

DFSP Disaster Food Stamp Program

DHA Dallas Housing Authority

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Acronym Definition

DHS Department of Homeland Security

DISA Defense Information Systems Agency

DLA Disaster Loan Assistance

DMcS Disaster Management credit System

DOc Department of commerce

DoD Department of Defense

DOE Department of Energy

DOI Department of Interior

DoJ Department of Justice

DOL Department of Labor

DOS Department of State

DOT Department of Transportation

Drc Disaster relief codes

DrF Disaster relief Fund

DUA Disaster Unemployment Assistance

DVP Disaster Voucher Program

EcIE Executive council on Integrity and Efficiency

EcP Emergency conservation Program

ED Department of Education

EDA Economic Development Administration

EEOc Equal Employment Opportunity commission

EO Exempt Organization

EOc Emergency Operations center

EPA Environmental Protection Agency

ErG Economic recovery Grants

ESF Emergency Support Function

ETA Employment and Training Administration

EWP Emergency Watershed Protection Program

EWP Emergency Watershed Protection Program

FAA Federal Aviation Administration

FAG Family Assistance Grant

FAr Federal Acquisition regulation

FbI Federal bureau of Investigation

Fcc Federal communications commission

FcSIc Farm credit System Insurance corporation.

FDIc Federal Deposit Insurance corporation

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Acronym Definition

FEMA Federal Emergency Management Agency

FHA Federal Highway Administration

FHWA Federal Highway Administration

FIcA Federal Insurance contributions Act

FIScAM Federal Information System controls Audit Manual

FMAG Fire Management Assistance Grant

FMScA Federal Motor carrier Safety Administration

FMSHrc Federal Mine Safety and Health review commission

FNS Food and Nutrition Service

FOS Federal Operations Support

FPDS NG Federal Procurement Data System – Next Generation

FPS Federal Protective Service

FrA Federal railroad Administration

FS Forestry Service

FSA Farm Service Agency

FSS Federal Supply Schedule

FTA DOT Federal Transit Administration

GAGAS Generally Accepted Government Auditing Standards

GAO Government Accountability Office

GcHr Gulf coast Hurricane recovery

GO Gulf Opportunity Zone

GSA General Services Administration

HAc Housing Area command

HANO Housing Authority of New Orleans

HcIc Hurricane contracting Information center

HErA Hurricane Education recovery Act

HGJTG High-Growth Job Training Grants

HHS Department of Health and Human Services

HKcATF Hurricane Katrina contract Audit Task Force

HKFTF Hurricane Katrina Fraud Task Force

HKFTFcc Hurricane Katrina Fraud Task Force command center

HOME Home Ownership Made Easy

Hrrc Hurricane recovery and response center

HSb Head Start bureau

HSOc Homeland Security Operations center

HSr Homeland Security roundtable

HSrA Health Services resource Administration

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Acronym Definition

HSWG Homeland Security Working Group

HTr Hurricane Tax relief (TIGTA)

HUD Department of Housing and Urban Development

IA Individual Assistance

IEMP Integrated Emergency Management Plan (USPS)

IG Inspector General

IHP Individuals and Household Program

IIMG Interagency Incident Management Group

IMPAc International Merchant Purchase Authorization card

IrS Internal revenue Service

ISP Office of Inspection and Special reviews

JAG Edward byrne Memorial Justice Assistance Grants (DOJ)

JFO Joint Field Office

KDHAP Katrina Disaster Housing Assistance Program

KETrA Katrina Emergency Tax relief Act

LEA Local Education Agency

LIHEAP Low Income Home Energy Assistance Program

LOLA Louisiana Office of the Legislative Auditor

LrA Louisiana recovery Authority

MA Mission Assignments

MArAD Maritime Administration

MbDA Minority business Development Agency

MbDc Minority business Development center

MDA Mississippi Development Authority

MDES Mississippi Department of Employment Security

MSc Military Sealift command

MSPb Merit Systems Protection board

NAr National Association of realtors

NAS Naval Audit Service

NASA National Aeronautics and Space Administration

NcUA National credit Union Administration

NDNH National Directory of New Hires

NEG National Emergency Grant

NEMIS National Emergency Management Information System

NFIP National Flood Insurance Program

NIST National Institute of Standards and Technology

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Acronym Definition

NLrb National Labor relations board

NOAA National Oceanic and Atmospheric Administration

NrcS Natural resources conservation Service

NrF National relief Fund

NrP National response Plan

NTIA National Telecommunications and Information Administration

ODA Office of Disaster Assistance

OI Office of Investigations

OIG Office of Inspector General

OJP Office of Justice Programs

OMb Office of Management and budget

ONA Other Needs Assistance

OPHEP Office of Public Health Emergency Preparedness

OPM Office of Personnel Management

OrcA Office of rural community Affairs

OSHA Occupational Safety and Health Administration

OTS Office of Thrift Supervision

PA Public Assistance

PcIE President’s council on Integrity and Efficiency

PHA Public Housing Agency

PIS Postal Inspection Service

PSE Public Service Employment

PTFP Public Telecommunications Facility Program

rcG reintegration counselor Grants

rEO real Estate Owned

rFQ request for Quotation

rHS rural Housing Service

rMA risk Management Agency

rrH rural rental Housing program (USDA)

SAMHSA Substance Abuse and Mental Health Services Administration

SbA Small business Administration

SEA State Education Agency

SIG Special Inspector General

SSA Social Security Administration

SSI Supplemental Security Income

SSN Social Security Number

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Acronym Definition

STArT/ErrSSuperfund Technical Assessment and response Team/Emergency and rapid response Services

TA technical assistance

TAc Taxpayer Assistance center

TAc Technical Assistance contractor

TDHcA Texas Department of Housing and community Affairs

TIGTA Treasury Inspector General for Tax Administration

TrEAS U.S. Treasury Department

TVA Tennessee Valley Authority

Uc unemployment compensation

UI unemployment insurance

USA U.S. Army

USAcE U.S. Army corps of Engineers

USAF U.S. Air Force

USDA United States Department of Agriculture

USF Universal Service Fund

USMc U.S. Marine corps

USN U.S. Navy

USPHS U.S. Public Health Service

USPS United States Postal Service

VA Department of Veterans Affairs

VA-NPSc Virginia National Processing Service center

WIA NEG Workforce Investment Act – National Emergency Grant

WYO Write Your Own program

ADDITIONAL INFORMATION AND COPIES

To obtain additional copies of this report, call the Department of Homeland Security Office ofInspector General (OIG) at (202) 254-4100, fax your request to (202) 254-4285, or visit theDepartment of Homeland Security OIG web site at www.dhs.gov/oig or the President’sCouncil on Integrity and Efficiency and the Executive Council on Integrity and EfficiencyHomeland Security Roundtable web site at http://ignet.gov/pande/hsr1.html#relief.

HURRICANE FRAUD HOTLINE

If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving hurricane operations, you can:

• CALL the Hurricane Fraud Hotline at (866) 720-5721

• FAX the Hurricane Fraud Hotline at (225) 334-4707

• EMAIL: [email protected]

• OR WRITE: Hurricane Fraud Task Force, Baton Rouge, LA 70821-4909

Calls can be made anonymously and confidentially.

Documents

Oversight of Gulf Coast Hurricane Recovery A Semiannual ... · disaster recovery operations along the Gulf Coast. Our audits, reviews, and investigations of ... and Hurricane Recovery,