FEMA Recoupment Of Assistance Distributed In The 2005 Hurricane Season
FREQUENTLY ASKED QUESTIONS
Why is FEMA asking for money back if they had already determined an individual eligible for assistance?
- In the disaster setting, individuals may not have complete paperwork at the time of registration or may not realize another family member has already registered. While FEMA has identification verification and duplicate registration checks, when information is missing during a critical time of need the disaster victim's immediate needs are considered. FEMA conducts home inspections and post-disaster audits to catch cases that demonstrate a duplication of benefits or incorrect payment.
- FEMA also recognizes that there will be some people who attempt to take advantage of programs, and those caught during the auditing process are being turned over to the DHS Inspector General.
What are the top reasons why money is recouped?
- Although it is difficult to say early in the process what the main reason will be for recoupment in any disaster, FEMA will only recoup money that has been INCORRECTLY applied and could include the following examples:
- Intentional misrepresentation of eligibility or need (fraud).
- A duplication of benefits. The law says that FEMA cannot pay in addition to insurance coverage, except in rare circumstances.
- Application error. Some people may not realize that most forms of disaster assistance are not provided for secondary residences or multiple members of the same household.
- FEMA processing error. Occasionally, approval of payments is made in error and must be corrected.
How was it subsequently determined that I had been given too much assistance, or been given it in error?
- Reports are run to review (audit) cases for eligibility requirements not adequately met for receiving assistance. A manual review by a caseworker then determines whether assistance may have been provided inappropriately.
Do I have to pay this back all at once, or can I spread it out over time?
- For individuals who are unable to pay the full amount at one time, they will be referred to FEMA's Disaster Finance Center to discuss other payment options.
If I work out a payment plan, do I still have to pay interest?
- Yes. Interest is part of a repayment plan if full repayment has not been made within 30 days of the date of the letter, though it is at a very low rate and is set by the Treasury Department. Interest on the debt will be charged at the rate of 2% per year starting from the date of the letter. Administrative fees for the cost of processing and handling the debt will also be charged. If the debt is not paid in full or a satisfactory repayment agreement has not been entered into within 90 days of the first notice, a penalty of 6% will be assessed on unpaid principal, interest and administrative fees.
Does the interest rate go up the longer my payment plan runs?
- The interest rate charged by federal agencies is set by Treasur?y. The interest rate in effect at the time notice is given to the debtor stay?s in effect until the debt is paid in full with one ex?ception. If a debtor defaults on a repayment agreement, the interest rate in effect at the time of default may be charged.
How long can I extend payments ? and what is the interest rate?
- The interest rate is set by the Treasury Department based on the average investment rate for the Treasury tax and loan accounts for the 12 month period ending on September 30 of each year. The current rate is 2%. If you cannot pay the debt in full, call the Disaster Finance Center to discuss payment options ? payment plan times and terms are developed on a case-by-case basis.
I feel I received this letter in error. How do I appeal this decision?
- Filing an Appeal: If you disagree with FEMA's decision, you have the right to an appeal. To file an appeal, you must:
- Explain in writing why you feel FEMA's decision is incorrect. Send any new or additional information that you have to show the Appeals Officer that you are eligible for this money. Be sure to include your FEMA Application No., shown at the top of this letter, when you write to FEMA.
- Mail your letter and the documents to:
FEMA Appeals Officer
National Processing Service Center
P.O. Box 10055
Hyattsville, MD 20782-7055 - Important: Your appeal letter must be postmarked within 60 days of the date of this letter.
How do I find out what information you have in my file ? or what might be missing?
- Applicants can request a copy of their file by writing. During the review process a caseworker may also contact the applicant to supply needed information before initiating the recoupment.
How long do I have to file an appeal?
- 60 days. All appeals must be in writing and postmarked within 60 days of the date of the recoup letter.
Will interest still accrue while my case is under appeal?
- Yes. Interest starts from the date of the letter, even if the applicant appeals. FEMA strongly encourages individuals to pay the debt in full within 30 days to avoid any interest or penalty charges. If FEMA approves the appeal, all of the money you have repaid, including interest, will be returned promptly.
Will ?owing a debt to the Federal Government? affect my credit in any way?
- If the applicant fails to pay the debt in full or fails to agree to a repayment plan within 120 days of the date of the letter FEMA must refer the debt to the Department of the Treasury. The U.S. Treasury may take the following actions to recover the debt:
- Through the Treasury Offset Program (TOP), reduce or withhold any of your eligible Federal payments by the amount of your FEMA debt. Federal payments include income tax refunds, Federal and military salary and retirement pay, and certain benefit payments such as Social Security.
- Additional collection fees will be added to the amount of the debt.
- Refer the debt to national credit bureaus, private collection agencies, and the Department of Justice for litigation.
- Your name and social security number may be subject to computer matching to identify sources to recover this debt through the methods listed above.
How long will it take to make a decision on my appeal?
- All appeals are reviewed by FEMA caseworkers. Decisions are usually made within 30 days of receiving the appeal. Applicants will be notified by mail of FEMA's response to the appeal.
Have you ever had to ask for money back that's been given to disaster victims in the past?
- Yes. In order to make sure FEMA is meeting it's obligation of being good stewards of the taxpayer's dollars, every disaster has a recoupment review as part of the complete disaster process.
How can you do this when there's such an obvious need? These people have lost everything and through perhaps no fault of their own received an incorrect amount of assistance from FEMA.
- FEMA is only at liberty to provide for needs for which the law gives us the authority. While these eligibility requirements are examined as registrations come in, the need for expediency in helping disaster victims, lack of needed documents and information can create imprecise payments that later must be recouped. It is only those applicants who are determined to be ineligible for assistance, and received assistance incorrectly who must be recouped.
- During an evacuation, people may find themselves as they did in Katrina with very little but the clothes on their backs for many weeks. Assistance from FEMA can make all the difference in those early days when they could not get help yet from private insurance for example. The audit process would catch this duplication of benefit in need of repayment and the recipient is now in a position to pay that back after having received insurance payments.
What is FEMA doing to fix this problem so as not to burden disaster victims all over again?
- FEMA has many checks in place not only at registration but through the home inspection process required to receive most forms of FEMA's Individual Assistance help for property and home rebuilding and repair. While FEMA's first concern is the disaster victim, FEMA has the responsibility of being a good steward of taxpayer dollars. In order to maintain this stewardship and simultaneously cut down delays associated with identity confirmation of a disaster victim, FEMA has retained ChoicePoint, Inc. This FEMA contractor will conduct identity checks during the registration process adding another ? but expedient ? layer to the ID check process to minimize waste, fraud and abuse of FEMA's assistance program.
What percentage of people already given assistance do you expect to try and recoup from?
- Although all disasters are different, in general, recoupments of disaster assistance incorrectly distributed averages about two or three percent per disaster. We are currently at a rate of less than one percent at this point. (Note: The number of households who have received IHP assistance from FEMA as of March 16, 2006, for Hurricanes Katrina, Rita or Wilma is nearly 1.7 million).
On average, how may people asked to pay money back actually do?
- This is not tracked by FEMA. If FEMA is unable to recoup funds incorrectly distributed, those cases are referred to the Department of Treasury for further action.
Is this just being asked of those who received assistance for Katrina and Rita, or other disasters, as well?
- All disasters have a recoupment process.
What happens if I do not return these funds to FEMA?
- If you are financially unable to pay the funds back to FEMA you should call the Disaster Finance Center to discuss your options. If you do not pay back the funds or contact FEMA regarding other options available, you will not be eligible for assistance from FEMA should another disaster strike your area. FEMA, by law, will have to pursue collection of the funds that you owe. Your account information will be sent to Treasury. Treasury may seize any federal funds owed to you by another agency and use these funds to pay your debt to FEMA, for example.
Is seizure a common occurrence in recoupments?
- Yes ? Treasury may seize federal tax returns.
Is FEMA recouping money it distributed in the debit card program, and will FEMA use this form of distribution in the future?
- Every part of FEMA's assistance program is subject to audit and recoupments, including funds provided through the debit cards. The debit card program was a pilot vehicle for the Expedited Assistance program. EA is the most difficult program to track and is used in only the largest of disasters. And just like EA provided by wire transfer or check, EA provided through debit cards may be recouped. Like all pilot programs, FEMA will take what it has learned and may incorporate the best practices of those programs into future initiatives if those programs assist victims of a disaster in an effective manner.
A GAO Report issued earlier this year bashed FEMA for incredibly wasteful distribution of taxpayer dollars through the Expedited Assistance program ? are you recouping EA payments made?
- The GAO report is a review of cases previously determined to be suspicious -- it is based on data provided by FEMA of payments the agency believes may have been fraudulently obtained. The information detailed in the report will assist federal investigators in rooting out and prosecuting fraud.
- These cases are a part of our recoupment process though we are working closely with the Hurricane Katrina Fraud Task Force as to when we recoup those cases so as not to interfere with an investigation.
- FEMA is working closely with the DHS Inspector General and members of the Hurricane Katrina Fraud Task Force, convened specifically to crackdown on fraud, to prosecute every case to the fullest extent of the law. We are also committed to a thorough review of all Expedited Assistance payments, which will begin in earnest in March. (see Jackson memo)
- Federal assistance has helped hundreds of thousands of families affected by Hurricanes Katrina and Rita. Offering Expedited Assistance, or the initial $2000 grants, was a calculated risk taken in a catastrophic situation where many people were forced from their homes, often without any identification or basic necessities. It was the right thing to do.
- It is extremely disingenuous to suggest that all of the aid distributed to those who desperately need it has gone without several layers of verification. FEMA has conducted more than two million housing inspections in the Gulf Coast region to verify ownership and damage before distributing additional aid.
FEMA has been accused by many of being careless in the spending of federal dollars in the Gulf Coast . What sort of oversight is there of how dollars are being spent?
- As we have said before Individual Assistance payments have verification at registration, again through the home inspection process and finally at the recoupment phase.
- The recoupment process includes a comprehensive program to randomly test for improper payments across all programs and activities that are believed to be susceptible to improper payments, in accordance with the Improper Payments Information Act of 2002.
Last Modified: Friday, 07-Apr-2006 02:05:04 EDT