Washington, D.C. · Inexperienced inspectors, savvy applicants and untimely operational changes led to overpayments and fraud in Miami-Dade County after Hurricane Frances, congressional investigators found.
The Federal Emergency Management Agency further compromised the disaster relief program by reducing its oversight of inspectors after last year's four hurricanes and by creating new rules that left some inspectors unsure what constituted an "unsafe" home, investigations by the U.S. Senate and executive branch auditors concluded.
The assessments are part of a sweeping congressional investigation into FEMA's hurricane payments in Miami-Dade, prompted by a series of reports in the South Florida Sun-Sentinel.
The Senate Homeland Security and Governmental Affairs Committee found fault with much of the $31 million doled out to residents for Frances, which made landfall more than 100 miles north of the county.
After grilling FEMA Director Michael Brown about the payments at a hearing in Washington on Wednesday, the committee is now turning its attention toward fixing what one staffer described as "repeated mistakes" in federal disaster aid going back more than a decade.
"You see mistakes that seem to recur from Hurricane Hugo to the Northridge [Calif.] earthquake to Hurricane Isabel," the staffer said. "You see repeated mistakes." Committee Chairwoman Sen. Susan Collins, R-Maine, plans to meet with Brown soon to begin working on tightening procedures and guidelines.
Brown insisted in his committee testimony that the errors were within reason given the magnitude of the storms. Collins disagrees.
"It's certainly not acceptable," she told the Sun-Sentinel. "I realize that FEMA's resources were severely strained by the unprecedented combination of four hurricanes hitting in such a short period of time, but that does not excuse what appears to be widespread and systemic weaknesses in the controls that are needed to protect the interest of taxpayers."
So far, FEMA has paid out more than $31 million to residents of Miami-Dade who claimed damage to their homes and belongings from Hurricane Frances, the Labor Day weekend storm that made landfall 100 miles to the north. Conditions in Miami-Dade were not severe. Meteorologists recorded no tornados and no flooding.
Both the committee and the inspector general of the Department of Homeland Security faulted FEMA for declaring Miami-Dade a disaster area without first assessing damage. The declaration made it possible for almost 13,000 Miami-Dade residents to collect money.
Much of the aid, the Sun-Sentinel found, was concentrated in poor neighborhoods of the county -- Liberty City, Opa-locka, Homestead -- where word of "easy money" spread quickly.
Fourteen aid recipients have been indicted and seven have pled guilty to fraud charges, most from Homestead. Five of the awards topped $15,000. One FEMA inspector who worked in Miami-Dade told congressional investigators that as soon as he left one home, neighbors would ask him to come look at their damage. After instructing people on how to apply with FEMA, the inspector would find himself back the next day in those homes.
Inspectors told the investigators it is common in high-density, low-income urban neighborhoods and trailer parks for word to spread quickly about FEMA's largesse. The agency's rules are designed specifically to help the uninsured.
Housing inspectors have told the Sun-Sentinel that they have been threatened and accosted in some areas by residents demanding government aid. Fearful of being attacked, some inspectors are too generous in their assessments of damage, a phenomenon FEMA calls the "tough neighborhood syndrome," according to documents provided to the Senate committee.
The documents also refer to FEMA's "culture" of erring on the side of the applicant. Inspectors are instructed to accept the word of residents who cannot prove damage. The inspector general found FEMA gave money for cars and belongings inspectors never saw and boats that reportedly sank.
After Hurricane Frances, applicants could call FEMA, say their home was unsafe, and receive one month's rent to live elsewhere without offering any proof of the destruction. "It's pay first, verify later," the inspector general found.
Federal investigators also found that changes intended to speed up claims made the program particularly vulnerable to mistakes and fraud.
To handle requests for help from the four hurricanes, FEMA doubled the number of housing inspections it expected each day from 7,500 to 15,000. Two Virginia-based companies that have government contracts to dispatch inspectors, PaRR Inspections and a Parsons Brinckerhoff subsidiary, responded by hiring about 3,200 novices with little training or oversight, the inspector general found.
The error rate for new inspectors was more than three times higher than experienced ones, according to documents provided the committee.
In Miami-Dade, long-time inspectors told committee staff that they saw little damage and attributed problems they did observe to poor maintenance, not the hurricane.
"When you talk to the inexperienced inspectors, it's difficult for them to understand the program," a committee investigator said. "[They think] if FEMA is sending us to the house, they're under the impression there must be some damage."
FEMA paid for new wardrobes, giving some Miami-Dade applicants in excess of $3,000 for clothes. "All the experienced inspectors said there was no reason they should get clothing unless their house was destroyed, which just didn't happen," the investigator said.
The government also paid for thousands of televisions, computers and appliances due to electrical surges. FEMA had only recently required inspectors to test appliances reportedly damaged by surges, but committee investigators found that not all inspectors complied.
Another change FEMA made Sept. 16, the day Hurricane Ivan hit Florida's Panhandle, resulted in applicants collecting thousands for minor problems such as a broken window, the committee found. FEMA imposed new "streamlined" inspection rules that meant inspectors could summarize the extent of damage in homes without examining every ruined item or space.
FEMA contends that it provided the proper guidance to inspectors about the new rules but "a number of new individual inspectors misunderstood or misapplied them," according to a Dec. 20 e-mail by a FEMA inspection supervisor, Clay Hale.
And no one caught the errors. Inspectors' hand-held computers, reprogrammed to incorporate the new guidelines, inadvertently disabled an "edit check" function that caught mistakes early.
One inspection company corrected the problem by mid-November, FEMA reported to the committee, but it took until Feb. 11 for the second company to resolve it.
FEMA is now trying to recoup $22 million in duplicate and overpayments throughout Florida.
Collins told the newspaper that "well-meaning" changes FEMA made to respond quickly "created an environment where erroneous payments were bound to occur."
Quality-control checks in Miami-Dade found errors in up to 37 percent of the inspections.
Collins concluded that a significant portion of the Miami-Dade residents who collected Frances aid had damage not caused by the storm or no damage at all.
"I think it's impossible to estimate, but based on our sampling of claims, there's no doubt the amount is a fairly large one," she said. "It seems to me there are a lot of procedural problems that are long-standing."
Megan O'Matz can be reached at email@example.com or 954-356-4518. Sally Kestin can be reached at firstname.lastname@example.org or 954-356-4510.Copyright © 2014, Los Angeles Times