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FEMA has not recouped improper Katrina payments

GULF COAST — The Federal Emergency Management Agency hasn’t tried to recoup about $643 million in improper payments made to victims of Hurricane Katrina and other disasters in the wake of a judge’s order more than three years ago, according to a government audit issued yesterday.

The improper payments have gone uncollected for more than three years because FEMA hasn’t given its final approval to a new process for recovering the money, auditors found in a report by the Department of Homeland Security’s inspector general’s office.

The federal agency has distributed more than $7 billion in disaster assistance payments since hurricanes Katrina and Rita struck the Gulf Coast in 2005. An estimated 160,000 applicants received about $643 million in improper payments resulting from fraud, FEMA errors or other mistakes.

In June 2007, a federal judge in New Orleans ordered FEMA to halt its debt collection activities until the agency made certain changes to its collection process. Government lawyers drafted a new process designed to comply with standards set by DHS, but the audit says FEMA’s chief hasn’t signed off on the plan yet.

A new process for recovering improper payments has been awaiting the approval of FEMA’s administrator since late 2008. Current Administrator Craig Fugate was confirmed by the Senate in May 2009.

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