FEMA Needs Revised Policies and Procedures to Better Manage Recovery of Disallowed Grant Funds

We determined that the Federal Emergency Management Agency’s (FEMA) process for recovering disallowed grant funds could be improved. First, FEMA justified allowing most of the costs we questioned for noncompliance with procurement regulations without addressing the procurement deficiencies. Second, although staff in FEMA regional offices generally followed internal guidance when recovering disallowed grant costs, they did not track debt collections by the FEMA Finance Center because FEMA guidance does not require them to do so. Finally, FEMA did not update its internal guidance to comply with revised time limits of the statute of limitations in the Robert T. Stafford Disaster Relief and Emergency Assistance Act. We made five recommendations for FEMA to address identified deficiencies and revise its guidance. FEMA concurred with all five of our recommendations.