The Homeland Security Department IG found that FEMA's fraud prevention and investigation branch lacked sufficient staff and a budget, and recommended reallocating resources to increase both. The agency agreed and said it planned to increase CORE (Cadre of On-Call Reserve Employees) staffing levels by 50 percent in fiscal 2011 and another 50 percent in fiscal 2012. The current employees in the fraud branch are full-time equivalent CORE. Those positions are temporary, excepted service appointments, typically with two- and four-year terms that are renewed if disaster work is ongoing and funding is available. Staffing levels have decreased during the past three years: in fiscal 2010, the unit was authorized to have nine full-time equivalent workers, but only six are on board. In fiscal 2007, there were 21 FTE-authorized positions.
"This increase will significantly enhance FEMA's investigative operations, analysis of disaster fraud and further agencywide fraud awareness training initiatives," David Kaufman, director of FEMA's Office of Policy and Program Analysis, said in response to the IG report, which assessed the agency's overall fraud prevention efforts.
FEMA provides disaster assistance to individuals and families through its Individuals and Households Program. IHP grants cannot exceed $29,900 per individual or household and are usually limited to 18 months. Since hurricanes Katrina and Rita, FEMA has disbursed more than $7 billion in IHP funds; an IG report found FEMA had distributed $643 million in improper payments among 160,000 applicants after those two disasters, mostly because of human error or fraud. From January 2010 to February 2011, the IG referred 292 FEMA fraud complaints to the unit, 141 of which contained evidence of fraud.
The report also recommended that FEMA increase the visibility of its fraud unit by realigning the office so that it reports directly to the administrator, but the agency did not agree with that suggestion, stating in its response to the report that "changing its location would in no way improve its operational efficacy."
Other recommendations, which FEMA agreed with, included:
- Fraud prevention training for all agency employees;
- Stronger internal controls;
- Adoption of the latest fraud detection technology;
- A directive that provides the fraud unit with the authority to review all claims of potential waste, fraud and abuse.