An audit by the US Department of Homeland Security’s Office of the Inspector General found irregularities in the payment of $17.1 million that the Federal Emergency Management Agency (FEMA) disbursed to nonprofit organizations for post-disaster work in Puerto Rico, among them, several that a Center for Investigative Journalism (CPI, in Spanish) investigation revealed had left the island without satisfactorily resolving most of the cases of survivors in their charge.

For the Disaster Case Management Program (DCMP), which was in effect for 18 months starting August 2018, FEMA recruited nine nonprofit organizations to serve as a liaison between Hurricane María survivors and available government and philanthropic aid intended for their recovery. But, according to the audit — which reviewed payments to eight of the nine organizations — FEMA did not implement the supervision and control systems required by law, and this “increased the risk of fraud, waste and abuse of funds.”

“FEMA has no assurance that $17.1 million paid to eight providers was DCMP-related and necessary to perform DCMP activities related to the program’s performance,” said Joseph V. Cuffari, Inspector general of the DHS in the audit report published September 29. 

In October 2020, a CPI investigation revealed the poor performance of the Disaster Case Management Program in Puerto Rico. With a budget of $73 million, the program granted multimillion-dollar allocations to nonprofit organizations from the United States that had no previous experience offering those services, were not rooted in Puerto Rico, and left unresolved more than half of the almost 25,000 cases they opened.

For applicants, this poor performance meant months of waiting for assistance to finally arrive to repair their homes, which Hurricane María left uninhabitable. In some cases, the program’s failures led them to experience the despair of seeing how that much-needed help never arrived so they could resume their lives with a certain degree of normality.

In Canóvanas, Mercedes Milagros Peña died at the age of 62 while waiting for the people who identified themselves as belonging to one of the organizations contracted by this program to return. She was told to drop her claims to FEMA because they would get her the assistance she needed to repair her house where the hurricane knocked out the windows and flooded everything.

The Office of Inspector General’s audit, which began in August 2020, focuses on FEMA’s performance as an overseer of a program that, since its creation in 2009, is often offered by local governments rather than non-governmental entities, as was the case in Puerto Rico.

The Office of the Inspector General warned in the report that, during fiscal year 2023, it will continue its evaluation of FEMA’s performance in Puerto Rico during the five years after Hurricane María, and that it will also review how the government of Puerto Rico has used federal funds allocated to prepare for future climate events.

According to the report, to which FEMA must respond with a remedial action plan within 90 days of its publication, FEMA had only one person in charge of supervising the performance of the DCMP and approving and processing payments and requests for refunds, contrary to federal standards.

FEMA implemented the request for advances and reimbursements as an internal control measure to prevent potential fraud, waste, and abuse [in the use of funds] …However, that approval process cannot be controlled by one individual.,” the report states.

The Inspector General does not identify that individual but says there are at least 15 payment approvals totaling $2.9 million under their name. Cuffari also did not identify the nonprofit organizations that received payments without providing documentation, evidence or proof of their work and expenses. The report does not indicate whether action will be taken against these individuals or groups.

For more than a year, the CPI investigated and documented how, under the case management program, the subsidized non-profit organizations recruited workers who did not have the professional or academic profile, or the capacity to carry out their duties.

The CPI’s investigation revealed that, from the start of the program, FEMA was lax in the selection of providers and granted collaboration agreements to the nine organizations that requested and submitted the required documents. The only two that were not selected were because their applications were incomplete.

Among the nine organizations recruited by FEMA were Family Endeavors, an organization based in San Antonio, Texas, and Disaster Services Corporation, which had incorporated months before Hurricane María in Irving, Texas. None had previous relations with Puerto Rico.

Endeavors, as it is known, got a $29.5 million grant from FEMA to address cases in 49 municipalities, and only 39% of its 11,229 cases closed having complied with the recovery plan that case managers outlined for each survivor. Disaster Services Corporation performed even worse. With a FEMA grant of $11.6 million, they subcontracted an inexperienced third party to offer part of the services in Puerto Rico, and only 23% of their 4,868 cases were fully resolved, according to information collected in a database provided by FEMA to which the CPI had access as part of its investigation, and which is no longer public.

These two stateside organizations were responsible for 65% of the 24,648 cases opened as part of the Disaster Case Management Program, according to data that the participants provided to FEMA, as of August 17, 2020.

In its report dated September 29, the Inspector General states that FEMA rejected the indications and recommendations when they were still in the draft stage. In written statements to the CPI, FEMA Press Secretary Jeremy Edwards said Tuesday that the agency always tries to “incorporate lessons learned” after disasters “to better meet the needs of communities.”

“We will continue to take advantage of best practices and implement corrective actions, when necessary, after any disaster,” FEMA added.

In its official response to the Inspector General’s draft report, FEMA stated that, being aware that several of the selected organizations were not used to dealing with the payment system used in grants of this type, it implemented additional requirements, such as the need to submit evidence of expenses incurred, to avoid possible fraud.

“This action later proved prudent as FEMA detected potential improper and fraudulent payments by one recipient and referred the matter to OIG Major Fraud Unit,” according to FEMA’s response memorandum, dated August 31, 2022. FEMA and the Inspector General do not mention this organization by name.

In July 2019, Oklahoma-based organization The Facilitators-Camp Ironhorse publicly denounced that the FEMA had withheld its payments since May 2019. Eventually, Camp Ironhorse was left out of the Disaster Case Management Program in Puerto Rico having reported only 19% of its 110 cases as successfully resolved.

Not every organization that received Disaster Case Management Program grants reported poor performance. The REHACE organization, of the Puerto Rico Methodist Church, closed 90% of its 2,140 cases having complied with the recovery plan established between its case managers and the participating survivors, and the Corporación de Desarrollo Económico, Vivienda y Salud, a nonprofit organization based in Arecibo, successfully closed 67% of its 2,828 cases.