HUD, FEMA data sharing finds waste

The government discovered it may have wasted up to $3 million a month in improper and duplicative payments to landlords based on the results of a cross-department computer data check, according to a new report from Homeland Security Department Inspector General Richard Skinner.

In June 2006, DHS’ Federal Emergency Management Agency (FEMA) and the Housing and Urban Development Department (HUD) agreed to share and compare data on FEMA’s rental aid for disaster victims and HUD’s rental aid.

Skinner’s review, started in April 2008, compared data from rental assistance to victims of the 2005 Hurricanes Katrina and Rita. The report was posted online July 17.

FEMA was the lead agency to coordinate disaster aid, which included federal payments for rent that started in February 2006. HUD began making payments to victims of hurricanes Katrina and Rita in December 2007.

Based on the agreement to cross-check data, the HUD inspector general uncovered 7,350 anomalies in which HUD was unable to make contact with individuals receiving FEMA rental assistance, or it appeared that a family improperly received rental assistance from both HUD and FEMA, the report said.

Additional reviews showed 3,743 apparently improper payments made to landlords, the report said. The payments were either duplicative,  were authorized for a disaster victim who no longer lived at the location, or were authorized for a disaster victim erroneously listed at two different locations at the same time.

“The review did determine that there was a significant potential for waste of millions of tax dollars,” the report said. “Specifically, the government has likely paid nearly $3 million per month in improper payments, if HUD’s estimates are correct that the average family rental assistance payment is $800 per month, and that 3,743 payments were improperly made to landlords.”

The HUD IG referred 180 cases to the DHS IG for follow-up. However, HUD did not forward full information on 110 of those cases, the report added.

Of the approximately 70 cases in which the DHS IG was able to receive appropriate information from HUD, 14 cases constituted potentially fraudulent overlapping payments, and those have been referred for further investigation, the report said.

The report recommended further investigation of the approximately 3,500 cases not yet fully reviewed and also suggests making permanent the collaborative cross-department checks.