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Audits: Millions of dollars in Katrina aid wasted
Reports cite scams, unused mobile homes; charges filed against 212
WASHINGTON - In its rush to provide Katrina disaster aid, the Federal Emergency Management Agency wasted millions of dollars and overpaid for hotel rooms, including $438-a-day lodging in New York City, government investigators said Monday.
Reports released by the Government Accountability Office and the Homeland Security Departments office of inspector general detail a series of accounting flaws, fraud or mismanagement in their initial review of how $85 billion in federal aid is being spent.
The two audits found that up to 900,000 of the 2.5 million applicants who received aid under FEMAs emergency cash assistance program which included the $2,000 debit cards given to evacuees were based on duplicate or invalid Social Security numbers, or false addresses and names. The GAO audit was first reported by NBC News last Friday.
Separately, the Justice Department said Monday that federal prosecutors have filed fraud, theft and other charges against 212 people accused of scams related to Gulf Coast hurricanes. Forty people have pleaded guilty so far, the latest report by the Hurricane Katrina Fraud Task Force said. Many defendants were accused of trying to obtain emergency aid, typically a $2,000 debit card, issued to hurricane victims by FEMA and the American Red Cross.
Thousands of additional dollars appear to have been squandered on hotel rooms for evacuees that were paid at retail rather than the contractors lower estimated cost. They included $438 rooms in New York City and beachfront condominiums in Panama City, Fla., at $375 a night, according to the audits.
The two audits were released by the Senate Homeland Security Committee as the panel wrapped up its investigation into the federal governments preparation and response to the disaster.
Some audit findings
The audits included these findings:
The $2,000 debit cards issued to hurricane evacuees for emergency supplies were often used for purchases unrelated to disaster aid, including: adult entertainment, gambling, a $450 tattoo, a .45-caliber handgun for $1,300 and a diamond engagement ring for $1,100.
There was little or no verification of the names, addresses or Social Security numbers of applicants registering by phone or the Internet for the $2,000 in aid, resulting in thousands of checks issued to those with duplicate or bogus information.
Duplicate payments were made to about 5,000 of the nearly 11,000 debit card recipients who received Katrina aid, first with debit cards and then again via electronic bank transfer.
Although FEMA says it bought 114,341 trailers for $1.7 billion, discrepancies abound in FEMAs documentation of the number ordered, received and occupied, making it difficult to ascertain the exact units available or whether government-owned property was otherwise accounted for.
FEMA may have bought too many temporary homes 24,967 manufactured homes obtained for $857.8 million and 1,295 modular homes at $40 million resulting in 10,777 such homes sitting empty in Hope, Ark., in sinking mud without proper storage. It was unclear how the decision was made, the Homeland Security audit stated.
Collins: FEMA failed to prepare
Sen. Susan Collins, who chairs the committee, decried the findings, noting that a series of audits and hearings after hurricanes in Florida in 2004 highlighted similar accounting problems and had called on then-FEMA director Michael Brown to make immediate changes.
The problem, once again, is that FEMA failed to prepare for the very type of disaster that happens every year, said Collins, R-Maine. This pay first, ask questions later approach has been an invitation to unscrupulous behavior.
The audits do not try to estimate a total dollar figure on abuse, but GAO auditor Gregory Kutz told senators it was certainly millions of dollars; it could be tens or hundreds of millions of dollars.
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http://www.msnbc.msn.com/id/11326973/