Florida Didn’t Make Sure Hurricane Payments Were Legit

January 30, 2006

Florida officials didn’t confirm the legitimacy of some hurricane claims before it paid out more than $150 million as part of an agreement to share the cost with Washington, a state audit has found.

As part of a deal in which Florida reimbursed the Federal Emergency Management Agency for 25 percent of the cost of non-housing hurricane assistance, Florida reimbursed FEMA for $155 million in 2004 and the beginning of 2005. But an audit released this week by the state Auditor General’s office found that for more than seven months the state didn’t do any checking on the people receiving the money.

The state did call some recipients last May to verify the amount paid, but for most recipients that was the extent of the follow-up, the report said.

The state needs to develop a procedure for making sure that reimbursements made to FEMA in the future are valid, said the report from the auditor general, which answers to the state Legislature.

The reimbursements were part of an agreement where Florida pays FEMA for 25 percent of the costs for non-housing assistance — money paid to victims for loss of uninsured property, transportation, medical, funeral, moving and other expenses.

FEMA paid out more than $600 million in such assistance to about 471,000 victims in Florida from September 2004 to June 2005 for the four hurricanes that hit Florida in 2004.

The state paid FEMA a quarter of that, about $155 million through June of last year.

“We just paid the bill without any accountability or oversight,” state Sen. Ron Klein said. He was one of several lawmakers who asked for the audit after media reports about apparent waste and fraud in FEMA payments after the hurricanes.

State Community Affairs Secretary Thaddeus Cohen responded in writing to the auditors findings, and said that the emergency management agency believed it would cost the state more to further verify the FEMA claims and could slow payments to disaster victims.

“The Division will continue to review and revise as necessary, its verification of the process,” he wrote. “This verification process involves contacting applicants for each disaster and determining if they have actually received FEMA financial assistance.”

The state also paid too much for many of the cars that it replaced, the auditors said. As part of its agreement with FEMA, Florida agreed to pay a flat $6,500 for any car that was totaled because of a storm, regardless of the value of the car. For all four storms, nearly 800 people applied for reimbursement for the total loss of a car.

The audit found that in a test of 21 payments, 13 of the cars were worth much less. Since then, the amount paid out for totaled cars has changed to $4,000, but auditors said the state should work to make sure the amounts better reflect the pre-disaster value of the car.

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