FEMA Asks Hurricane Victims for Money It Wrongly Mailed

The federal agency that handles disaster assistance says it mistakenly sent more than $385 million to victims.

Posted: 12/29/2011 11:46 AM EST
FEMA Asks Hurricane Victims to Return Wrongly Mailed Money

The Federal Emergency Management Agency, saying it mistakenly sent payments to victims of Hurricanes Katrina, Rita and Wilma, is now trying to recover more than $385 million.

The payments amount to an average $4,622 per recipient. FEMA, the federal agency that handles disaster mitigation, preparedness, response and recovery, said that the overpayments were due in part to mistakes by its own staff.

That figure accounts for about 5 percent of the roughly $8 billion that FEMA distributed after the storms.

Congressional testimony revealed that FEMA workers had lapses that resulted in clerical errors and failure to interview applicants.

However, FEMA said that it is bound by law to attempt to recover funds that have been sent to victims mistakenly.


Recently, Congress passed legislation that would give FEMA the ability to waive many of the debts. The legislation was signed by President Barack Obama as part of a $1 trillion spending package.


Rachel Racusen, a FEMA spokeswoman, said that the agency is reviewing the law's provisions and developing a plan to implement the legislation’s provisions. It is unclear how many recipients of FEMA money could benefit from the change.


She explained that the agency has enacted "strong protections" to avoid making improper payments, reducing its error rate from about 14 percent after Katrina to less than 1 percent for more recent disasters.


"We have also worked to significantly improve the recoupment process so that it is more understandable and provides due process for both disaster survivors and taxpayers," Racusen said in a statement.

 

Victims who have received payments have complained that repaying the funds would produce economic hardship for them.

 

Roughly 2,500 recipients, including 930 victims of the 2005 hurricanes, have appealed their debt notices. FEMA says that about 30 percent of those appeals successfully erased at least some of the debt. Recipients are entitled to request waivers if they can prove that making the payments would lead to economic hardship.

 

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(Photo: Lee Celano/Reuters)

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