Federal Reports

FEMA is currently responding to Hurricanes Harvey, Irma, and Maria, some of the most catastrophic disasters in recent United States history. Damages from Hurricane Harvey are estimated to exceed $100 billion. On September 22, 2017, The State of Texas General Land Office (Texas) entered into an Intergovernmental Service Agreement (agreement) to provide assistance to FEMA in the delivery of Direct Housing Assistance (DHA) to Hurricane Harvey survivors on a temporary basis. FEMA estimates these costs will reach approximately $1 billion. The agreement does not clearly identify basic controls to ensure (DHA) funds are spent according to Federal regulations. For instance, the agreement does not include approval authorities and physical inspections, or separation of duties and independent certifications. We are concerned that without adequate controls in place the federal funds may be at risk of fraud, waste, and abuse. Therefore, it is imperative that FEMA ensure Texas’ proposed project management plan clearly identifies the internal controls needed to ensure that Federal funds will be properly spent. It also provides observations on the current and past issues with FEMA’s use of direct housing assistance programs.

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We determined that while the Commission has a system in place to account for funds on a project-by-project basis and generally expended Public Assistance grant funds according to FEMA guidelines, the Commission needs additional assistance in developing long-term solutions for repetitive damages to county roads and managing its $5.4 million FEMA grant. We found that the Commission did not receive adequate guidance from FEMA and Alabama concerning Hazard Mitigation funding for long-term solutions to repetitive damages to roads; thus, potentially costing FEMA millions of dollars in the future; and project formulation, causing improperly written project scopes. Additionally, the Commission did not have proper procurement procedures to ensure that small businesses, minority-owned firms, and women’s business enterprises have an opportunity to bid on Federal contracts; and adequate procedures to ensure proper documentation is collected to support $24,000 in costs. The report contains five recommendations to the Regional Administrator, FEMA Region IV, to provide the Commission with additional guidance to properly manage its $5.4 million and save millions in the future. FEMA agreed with all recommendations.

This study continues OIG's body of work examining overpayments made by Medicare. Overpayments can be identified by a number of key players including providers and Medicare contractors. Recovering overpayments is critical to reducing improper payments in the Medicare program. Past OIG work found that overpayments referred by program safeguard contractors (PSCs) for collection did not result in significant recoveries to the Medicare program. As of 2012, CMS had transitioned the workload of most PSCs to six zone program integrity contractors (ZPICs). In 2016, CMS began transitioning the remaining PSCs and ZPICs to unified program integrity contractors (UPICs). OIG's work on both PSCs and ZPICs identified deficiencies in how contractors were tracking and reporting overpayment data. This study provides an update on the collection of ZPIC- and PSC-referred overpayments and identifies ongoing challenges that contractors face in tracking and collecting overpayments identified by ZPICs and PSCs.