FEMA assists disaster  victims in part through its Individuals and Households Program (IHP), a  component of the federal disaster-response efforts established under the  Robert T. Stafford Disaster Relief and Emergency Assistance Act. FEMA  determines whether individuals or households meet eligibility  requirements for IHP assistance after they apply for registration either  online or over the telephone. FEMA Has Significantly Improved Fraud Prevention Controls over Disaster Assistance, but Weaknesses Still Exist

Since Hurricanes Katrina and Rita, FEMA has improved its controls over  identity and address verification and inspections, housing assistance in  FEMA-paid-for hotels, and duplicate registrations. For example, for Hurricanes  Ike and Gustav, FEMA conducted identity and address verification on all  applications and required inspections prior to approving rental assistance. In addition, FEMA required individuals in need of housing assistance to  provide valid registration numbers before checking into FEMA-paid-for  hotels. FEMA has also taken steps to flag duplicate registrations submitted  for the same disaster. We were successful on this  application not only because we submitted fictitious documentation, but  also because FEMA’s inspector failed to properly inspect our bogus  damaged address. Identity and Address Verification and Inspections

The following information describes (1) the control weaknesses related to  identity and address verification and inspections that we identified during  our work on Hurricanes Katrina and Rita, (2) the improvements we found  as a result of our undercover tests during Hurricanes Gustav and Ike, and  (3) flaws that still exist in the identity and address verification and  inspection processes. Improvements Identified during the Response to Hurricanes  Gustav and Ike: FEMA made several improvements to the verification  and inspection processes. This application was also approved for a free hotel room and  received duplicate payments for previously incurred hotel expenses. Using a  manual process, the contractor reviews this list to determine what  payments need to be made. FEMA also made millions of dollars in duplicate  payments to thousands of individuals who submitted claims for damages  to the same primary residences for both Hurricanes  Katrina and Rita. Difficulties Exper by Undercover GAO Applicants and Real Disaster Victims

Although we encountered little or no difficulty when applying for  assistance over the Internet, we observed several problems with FEMA’s customer service when we made applications by phone. For one of o Hurricane Ike applications, an investigator had to call nine times over  the course of 3 days before being able to speak to a call center staf member. On a Hurricane Gustav application, the investigator had  to call after 1:00 a.m. in order to speak with an operator. Incorrect information. s,  In an effort to understand the experiences of actual disaster victim we contacted registrants chosen from a database provided by FEMA About half of the individuals we spoke with told us that they did not  experience any problems with FEMA’s application process; the other half confirmed that they encountered delays in getting through to  . FEMA’s Staffing Models and Call Center Operational Plan

FEMA cited several factors that contributed to poor customer service in  the aftermath of Hurricanes Ike and Gustav: a higher-than-expected call  volume, unmet staffing needs, contractor failure, and problems with its  automatic call system. FEMA said that this  heightened security check prevented the contractor from providing  additional staff in a timely fashion.
Why GAO Did This Study

GAO's previous work on Hurricanes Katrina and Rita identified fraud, waste, and abuse resulting from a lack of fraud-prevention controls within the Federal Emergency Management Agency's (FEMA) assistance programs. For example, FEMA did not verify the identities or addresses of individuals applying for aid under its Individuals and Households Program (IHP). FEMA also did not verify the eligibility of individuals seeking shelter in FEMA-paid-for hotels and made duplicate payments to individuals who applied multiple times. GAO made numerous recommendations designed to improve these controls. To follow up on this work, GAO conducted undercover tests of the IHP process during the response to Hurricanes Gustav and Ike. This report discusses (1) whether FEMA's controls have improved since Katrina and Rita and (2) issues GAO identified related to the customer service that FEMA provided. GAO submitted bogus applications for disaster assistance, met with FEMA officials, and contacted actual disaster victims to determine their experiences applying for aid.

What GAO Found

FEMA has significantly improved its fraud prevention controls over disaster assistance. For example, FEMA now conducts identity and address verification on all applications and requires inspections prior to approving rental assistance. In addition, FEMA requires individuals in need of housing assistance to provide valid registration numbers before checking into FEMA-paid-for hotels. FEMA has also taken steps to flag and cancel duplicate registrations for the same disaster. These improvements made it more difficult for GAO to penetrate IHP controls for Hurricanes Gustav and Ike--only 1 of 10 fraudulent applications submitted by GAO received cash payments. However, GAO found flaws in FEMA's controls that still leave the government vulnerable to fraud, waste, and abuse. GAO's undercover tests show that a persistent fraudster can bypass many of these controls by submitting fabricated documents to prove identity or address and, as a result, obtain housing assistance. GAO also received duplicate payments for bogus hotel expenses. In addition, FEMA failed to properly inspect a bogus address GAO used to apply for assistance, ultimately sending GAO multiple checks for thousands of dollars in rental assistance. GAO observed several problems with FEMA's customer service, which made it difficult for many real victims to apply for assistance or obtain shelter in a timely fashion. For example, one of GAO's investigators called nine times over the course of 3 days--several times being put on hold for 20 minutes----before being connected to an operator. Other investigators received incorrect information about the application process. Actual disaster victims confirmed these problems. One applicant reported having to call FEMA at 4 a.m. in order to reach an operator. FEMA cited several factors that contributed to this poor service, including a higher-than-expected call volume and an inability to meet projected call center staffing needs because a contractor failed to provide adequate staffing. Despite these issues, FEMA told GAO that it has made few changes in preparation for the 2009 hurricane season.