2IÀFHRI,QVSHFWRU*HQHUDO FEMA s Slab Removal Waiver in Oklahoma 4117-DR-OK OIG-14-100-D June 2014
Washington, DC 20528 / www.oig.dhs.gov June 6, 2014 MEMORANDUM FOR: George A. Robinson Regional Administrator, Region VI Federal Emergency Management Agency FROM: SUBJECT: John V. Kelly Assistant Inspector General Office of Emergency Management Oversight FEMA s Slab Removal Waiver in Oklahoma 4117-DR-OK FEMA Disaster Number 4117-DR-OK Audit Report Number OIG-14-100-D Attached for your information is our final letter report, FEMA s Slab Removal Waiver in Oklahoma 4117-DR-OK. In response to the severe storms and tornadoes in Oklahoma from late May to early June 2013, our office initiated several followup audits and reviews. We discussed the results of this audit with Federal Emergency Management Agency (FEMA) officials during the course of the audit. We also provided a discussion draft report to FEMA on March 3, 2014. This report contains one recommendation. Consistent with our responsibility under the Inspector General Act of 1978, we will provide copies of our report to appropriate congressional committees with oversight and appropriation responsibility over the. We will post the report on our website for public dissemination. Major contributors to this report are Christopher Dodd, Acting Director, Central Regional Office; Paige Hamrick, Audit Manager; and David B. Fox, Auditor-in-Charge. Please call me with any questions at (202) 254-4100, or your staff may contact Christopher Dodd, Acting Director, at (214) 436-5200. Attachment
Background OFFICE OF INSPECTOR GENERAL FromMay18to20,2013,OklahomaCity,Oklahoma,andsurroundingcountiesexperienced severestormsandtornadoes,includinganefͳ5tornadothatstruckthecityofmooreon May20,2013. 1 TheEFͲ5tornadodamagednearly2,400residentialhomes,ofwhichatleast 1,100appearedtobetotallydestroyed,leavingnothingbutdebrisandwreckage. Asaresultof theseverestormsandtornadoes,oklahomareported26fatalitiesandmorethan387injuries. 2 OnMay20,2013,thePresidentdeclaredamajordisasterwithanincidentperiodbeginningon May18,2013,andextendingtoJune2,2013. OnMay28,2013,FEMA sassociateadministrator,officeofresponseandrecovery, promulgateddisasterͳspecificguidancethatwaivedsectionsoffema sdebrisremovalof PrivatePropertyandDemolitionofPrivateStructurespolicies. 3 Thisguidancemadetheremoval ofconcreteslabs,foundationsͳonͳgrade,pads,anddrivewaysfromprivatepropertyor demolitionofprivatestructuresaneligibledebrisremovalcostspecifictothisdisaster. Onthatsamedate,theOfficeofInspectorGeneraldeployedanEmergencyManagement OversightTeamtotheJointFieldOfficeinOklahomaCity,Oklahoma. 4 TheEmergency ManagementOversightTeamservesasanindependentunitforoversightofdisasterresponse andrecoveryactivitiesandprovidesfemaanadditionalresourceforproactiveevaluationto preventanddetectsystemicproblemsindisasterprogramsandhelpsensureaccountability overfederalfunds. ResultsofAudit FEMA sdisasterͳspecificwaiverofprivatepropertydebrisremovalanddemolitionofprivate structuresisconsistentwiththeauthoritiestherobertt.stafforddisasterreliefand EmergencyAssistanceAct(StaffordAct)grantstotheagencyinassistingjurisdictionsto performactivitiesthatareessentialinsavinglives,protectingpublichealthandsafety,and protectingproperty.however,incarryingoutthisdisasterͳspecificwaiver,femaneedsto addressthevulnerabilitiesthatarepresentwheneveritauthorizeslargesumsofmoneyinsuch 1 BasedontheEnhancedFujitaScale(EFScale),anEFͲ5tornadoisthemostseverewithwindspeedsinexcessof 200milesperhour.TheEFͲ5tornadoremainedonthegroundforover40minutestearingapath1.3mileswide and17mileslongandcausingmassivedestructioninthecitiesofnewcastleandmoore,oklahoma. 2 OnMay30о31,2013,anotherseriesofseverestormsmovedacrossCentralOklahoma,creatingeighttornados; onea2.6mileͳwideefͳ5,thewidesteverrecorded.totalfatalitiesroseto48withmorethan508reported injuries. 3 TheguidancewasinaMay28,2013,MemorandumtotheRegionalAdministrator,FEMARegionVI,fromthe AssociateAdministrator,OfficeofResponseandRecovery. 4 FEMAestablishesJointFieldOfficesinornearthedisasterͲimpactedareaforusebyFederalandStatestaffasthe focalpointofdisasterrecoveryoperations. www.oig.dhs.gov 2 OIGͲ14Ͳ100ͲD
auniquemanner.thecurrentsituationrequiresincreasedvigilancetomonitortheexpenditure ofpublicfundsandassurancethatsufficientpoliciesandproceduresdesignedtodetectand preventduplicationsofhomeowner sinsurancebenefitsareinplace. TheStaffordActProvidesFEMAtheFlexibilityToWaivePrivatePropertyDebrisRemovaland DemolitionofPrivateStructuresPolicies Sections301and403oftheStaffordActauthorizeFEMAtomodifyorwaiveadministrative conditionsforassistanceandtotakeemergencyprotectivemeasurestosavelivesandproperty aspartofitspublicassistanceprogram.generally,femadoesnotconsiderslabremovaltobe eligibleworkbecauseitispartofprivatepropertydebrisremovalordemolition.however, FEMA spurposeforthisdisasterͳspecificwaiverwasto expediterecovery and enhance safetyinthecommunitiessurroundingoklahomacitydevastatedbythisdisaster. FEMA sslab removalwaiverappliedspecificallytofemaͳ4117ͳdrͳokandonlyincaseswhereprivate propertydebrisremovalordemolitionofprivatestructureswasotherwiseeligibleforpublic Assistancefunding,whichisapermissibleuseofPublicAssistancefunds.Additionally,giventhe factsandcircumstancessurroundingoklahoma sseverestormsandtornadoes,fema swaiver mayacceleratetherecoveryprocessandincreasesafetyinthedevastatedareas. DisasterͲSpecificWaiversAreVulnerabletoFraud,Waste,andAbuse ImplementingdisasterͲspecificwaiversentailsrisksthatrequirerobustinternalcontrolsto avoidproblemsinvolvingtheexpenditureofpublicfunds.theofficeofinspectorgeneraland thegovernmentaccountabilityoffice,aswellasfemainternalassessments,haveidentified neededimprovementstotheinternalcontrolsoftheindividualandpublicassistanceprograms. FEMA,incarryingoutitsmissiontosupportcitizensandfirstresponders,disbursesbillionsof dollarsannuallytoassistdisastersurvivors.thismissionexposesfematopotentialfraud, waste,andabuseintheexecutionofroutinedisasterassistanceprograms.duringthe implementationofadisasterͳspecificwaiversuchasthisone,therisksoffraud,waste,and abuseareexacerbated.consequently,thisdisasterͳspecificwaiverrequiresincreasedvigilance tomonitortheexpenditureofpublicfundsandtoprotectagainstpotentialduplicationsof homeowner sbenefits. 5 Therefore,itisimperativethatFEMAworkwithOklahomatoensure thatoklahomahassufficientpoliciesandproceduresinplacetodetectduplicationof homeowner sinsurancebenefits.inaddition,oklahomashouldremittofemaanyamounts thatindividualhomeownersreceivedorshouldhavereceivedinsettlementfordamages sustainedtotheirslabs. 5 Individualsareencouragedtoreportpotentialfraud,waste,andabuse,includinganyduplicationofhomeowner s benefitstotherecoveryaccountabilityandtransparencyboardviatheirwebsiterecovery.gov. www.oig.dhs.gov 3 OIGͲ14Ͳ100ͲD
Asaresultofouraudit,FEMAofficialssubmittedasamplecopyofalettertheCityofOklahoma Citymailedtoindividualhomeownersrequestingreimbursementofdebrisremovalor demolitioncompensationfromthehomeowner sinsurancecompany.therefore,weconsider thisfindingandtherelatedrecommendationtoberesolvedandclosedandrequirenofurther actionfromfema. Conclusion WedeterminedthatFEMA sactionsinwaivingprivatepropertydebrisremovalanddemolition ofprivatestructurespoliciesareconsistentwiththeauthoritiesgrantedbythestaffordact. However,giventhenumberofindividualsaffectedbytheseverestormsandtornadoes,FEMA needstomaintainstronginternalcontrols. 6 WecommendFEMAforitsrapidresponsein implementingthisdisasterͳspecificwaiverwithin10daysafterseverestormsandtornadoes devastatedoklahomacityandsurroundingcommunities.ifsuccessful,thewaivercanhelp revitalizeandensurethesafetyoftheaffectedareas.nevertheless,femaneedstobemindful ofthevulnerabilitiesassociatedwithimplementingdisasterͳspecificwaiversandtoensurethat internalcontrolsaresufficienttoprotectagainstthosevulnerabilities. Recommendation WerecommendthattheRegionalAdministrator,FEMARegionVI: Recommendation#1:WorkwiththeStateofOklahomatodeveloppoliciesandprocedures thatarecosteffectiveunderthecircumstancestodetectduplicationofhomeowner sinsurance benefitsandtoensurethatthestateofoklahomaremitstofemaanyamountsthatindividual homeownersreceivedorshouldhavereceivedinsettlementfordamagesustainedtotheir slabs. 6 FEMAprocessedapproximately3,455IndividualHousingAssistanceapplicationswithintheCityofMoore, Oklahoma,eachhavinghadsomeformofhomeowner sinsuranceatthetimeofthedisaster.inaddition,ofthe 281residentsofMoore,Oklahomawhobenefitedfromhavingtheirslabsremovedbythecity,only29didnot havehomeowner sinsurance. www.oig.dhs.gov 4 OIGͲ14Ͳ100ͲD
DiscussionwithManagementandAuditFollowup WediscussedtheissueweidentifiedinthisreportwithFEMAofficialsduringourauditand providedthemwithadraftreport.wediscussedourdraftreportwithfemaofficialsatanexit conferenceonmarch21,2014.femaofficialsgenerallyagreedwithourfindingsand recommendation.onthatsamedate,femaofficialsprovideddocumentationtosupporttheir effortstoworkwiththestateofoklahoma;therefore,weconsiderthisreportandits recommendationcloseduponissuanceandrequiresnofurtheractionsfromfema. www.oig.dhs.gov 5 OIGͲ14Ͳ100ͲD
AppendixA Objectives,Scope,andMethodology TheDepartmentofHomelandSecurity(DHS)OfficeofInspectorGeneral(OIG)wasestablished bythehomelandsecurityactof2002(publiclaw107ͳ296)byamendmenttotheinspector GeneralActof1978.Thisisoneofaseriesofaudit,inspection,andspecialreportspreparedas partofouroversightresponsibilitiestopromoteeconomy,efficiency,andeffectivenesswithin thedepartment. TheobjectiveofthisreviewwastodeterminewhetherFEMA sactionsinpromulgatingits disasterͳspecificwaiverofslabremovalsinoklahomawasconsistentwithauthoritiesgranted toitbythestaffordact,and,ifso,whatissuesfemamayneedtoaddresswhileimplementing thiswaiver.weconductedthisreviewbyapplyingthestatutes,regulations,andfemapolicies andguidelinesineffectatthetimefemaissueditsdisasterͳspecificwavier.weinterviewed FEMAofficialsandperformedotherproceduresconsiderednecessarytoaccomplishour objective.wedidnotassesstheadequacyoftheagency sinternalcontrolsapplicabletogrant activitiesbecauseitwasnotnecessarytoaccomplishourauditobjective. WeconductedthisperformanceauditbetweenMay28,2013,andMarch21,2014,pursuantto theinspectorgeneralactof1978,asamended,andaccordingtogenerallyaccepted governmentaccountingstandards.thosestandardsrequirethatweplanandperformtheaudit toobtainsufficient,appropriateevidencetoprovideareasonablebasisforourfindingsand conclusionsbaseduponourauditobjectives.webelievethattheevidenceobtainedprovidesa reasonablebasisforourfindingsandconclusionsbaseduponourauditobjective. www.oig.dhs.gov 6 OIGͲ14Ͳ100ͲD
AppendixB ReportDistributionList DepartmentofHomelandSecurity Secretary ChiefofStaff ChiefFinancialOfficer UnderSecretaryforManagement AuditLiaison,DHS ChiefPrivacyOfficer FederalEmergencyManagementAgency Administrator ChiefofStaff ChiefFinancialOfficer ChiefCounsel Director,RiskManagementandCompliance FederalCoordinatingOfficer,4117ͲDRͲOK AuditLiaison,FEMARegionVI AuditLiaison,FEMA(JobCodeGͲ13Ͳ063) ChiefProcurementOfficer RecoveryAccountabilityandTransparencyBoard Director,Investigations OfficeofManagementandBudget Chief,HomelandSecurityBranch DHSOIGBudgetExaminer Congress SenateCommitteeonAppropriations,SubcommitteeonHomelandSecurity SenateCommitteeonHomelandSecurityandGovernmentalAffairs HouseCommitteeonAppropriations,SubcommitteeonHomelandSecurity HouseCommitteeonHomelandSecurity HouseCommitteeonOversightandGovernmentReform HouseCommitteeonTransportationandInfrastructure www.oig.dhs.gov 7 OIGͲ14Ͳ100ͲD
ADDITIONAL INFORMATION To view this and any of our other reports, please visit our website at: www.oig.dhs.gov. For further information or questions, please contact Office of Inspector General (OIG) Office of Public Affairs at: DHS-OIG.OfficePublicAffairs@oig.dhs.gov, or follow us on Twitter at: @dhsoig. OIG HOTLINE To expedite the reporting of alleged fraud, waste, abuse or mismanagement, or any other kinds of criminal or noncriminal misconduct relative to Department of Homeland Security (DHS) programs and operations, please visit our website at www.oig.dhs.gov and click on the red tab titled "Hotline" to report. You will be directed to complete and submit an automated DHS OIG Investigative Referral Submission Form. Submission through our website ensures that your complaint will be promptly received and reviewed by DHS OIG. Should you be unable to access our website, you may submit your complaint in writing to: Office of Inspector General, Mail Stop 0305 Attention: Office of Investigations Hotline 245 Murray Drive, SW Washington, DC 20528-0305 You may also call 1(800) 323-8603 or fax the complaint directly to us at (202) 254-4297. The OIG seeks to protect the identity of each writer and caller.