Poor Controls Over Federal Aid in Massachusetts After the 1978 Blizzard Caused Questionable Benefit Payments

CED-81-4 Published: Jan 26, 1981. Publicly Released: Feb 02, 1981.
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Highlights

In February 1978, the President declared eight Massachusetts' counties a major disaster area following the most severe blizzard to strike the Boston metropolitan area in over 100 years. Federal assistance totalled about $180 million to individuals, businesses, and state and local governments. GAO was asked to review: (1) the adequacy of coordination among the federal agencies to prevent duplicative and other erroneous payments; and (2) delays in the processing of some Small Business Administration (SBA) loans in the February 1978 disaster. Specifically, GAO reviewed disaster benefits provided to victims by SBA, the Federal Emergency Management Agency (FEMA), the Department of Housing and Urban Development, the Department of Agriculture, and the Commonwealth of Massachusetts. This assistance included loans and grants for emergency home repairs and other necessary expenses. Also, emergency food stamps were issued.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Federal Emergency Management Agency The Director of FEMA and the Administrator of SBA should ensure that federal disaster benefits are provided and spent only for verified losses or needs.
Closed
GAO has no information on the actions taken in response to this recommendation.
Small Business Administration The Director of FEMA and the Administrator of SBA should ensure that federal disaster benefits are provided and spent only for verified losses or needs.
Closed
GAO has no information on the actions taken in response to this recommendation.
Federal Emergency Management Agency The Director of FEMA and the Administrator of SBA should eliminate the use of oral declarations that a loan cannot be repaid as a basis for denying loans, which establishes grant eligibility.
Closed
GAO has no information on the actions taken in response to this recommendation.
Small Business Administration The Director of FEMA and the Administrator of SBA should eliminate the use of oral declarations that a loan cannot be repaid as a basis for denying loans, which establishes grant eligibility.
Closed
GAO has no information on the actions taken in response to this recommendation.
Federal Emergency Management Agency The Director of FEMA should collaborate with the Administrator of SBA and review the benefits provided to all individuals and identify those persons who received improper payments or submitted fraudulent claims. Criminal or civil actions should be pursued where the agencies, including the Department of Justice, deem it warranted. At the least, attempts should be made to recover duplicative or improper benefits.
Closed
GAO has no information on the actions taken in response to this recommendation.
Small Business Administration The Director of FEMA should collaborate with the Administrator of SBA and review the benefits provided to all individuals and identify those persons who received improper payments or submitted fraudulent claims. Criminal or civil actions should be pursued where the agencies, including the Department of Justice, deem it warranted. At the least, attempts should be made to recover duplicative or improper benefits.
Closed
GAO has no information on the actions taken in response to this recommendation.
Federal Emergency Management Agency The Director of FEMA should: (1) issue instructions requiring that, before authorizing grants to purchase replacement vehicles, a determination be made concerning the adequacy of public transportation; (2) stop awarding grants for transportation when a disaster victim has already obtained a disaster loan for the same loss; and (3) generally base grants to purchase replacement vehicles on the average market value of the vehicle claimed as a loss or on a flat amount, whichever is lower.
Closed
GAO has no information on the actions taken in response to this recommendation.

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