Federal audit finds FEMA mishandled hurricane payments in Florida

WASHINGTON — Some 10 years after the winds died down, federal officials are still cleaning up after a flurry of hurricanes hit Florida in 2004 and 2005, with a new federal audit saying the Federal Emergency Management Agency might have paid cities for damages that insurance should have covered.

The audit by the inspector general of the Department of Homeland Security, which oversees FEMA, found that the quality of FEMA’s insurance reviews in Florida was so lacking the agency can’t ensure it didn’t pay for damages that a private insurer should have covered.

FEMA also improperly waived the need for communities to buy insurance to protect against future disasters. That means FEMA and federal taxpayers might be on the hook to cover damages from the next hurricanes. According to the audit, FEMA stands to lose up to $1 billion in future Florida disasters because of these improper insurance waivers.

While the payments in question revolve around damages incurred by cities and other government entities, the issue isn’t with them. The issue is with FEMA.

“FEMA needs to be checking that the communities are allowing the insurance companies to pay for the portion they should be covering,” John Kelly, an inspector general official who oversaw the report on FEMA’s Florida payments, said in an interview. “It is FEMA’s responsibility to make sure tax dollars are being spent properly. It’s critical that FEMA start applying its regulations correctly and consistently.”

That’s doubly important, he said, since some of the FEMA employees involved in Florida reviews have moved on to other disasters, such as the superstorm Sandy that hit New York and New Jersey.