Inspector General Finds Abuse of Taxpayer Dollars Spent on Illegal Aliens
FAIR Take | April 2023
On March 28, the Inspector General (OIG) of the Department of Homeland Security (DHS) released a scathing report following its audit of funds awarded under the American Rescue Plan Act. The Act, signed into law in March 2021, was one of the massive stimulus packages passed in the wake of the Covid-19 epidemic. However, tucked inside of the 243-page bill was a $110 million appropriation to the Federal Emergency Management Agency (FEMA) to provide “humanitarian relief to families and individuals encountered by [DHS].”
In short, Congress approved this money to help illegal aliens arriving at the southern border. The money was routed through FEMA so that the agency could use its long-standing Emergency Food and Shelter Program (ESFP) to manage the program. ESFP would award the $110 million in grants to nonprofits and local government agencies and those grantees would, in turn, provide food, shelter, and services to illegal aliens encountered at the southern border.
Unfortunately, in his recent audit, the Inspector General found that these funds were mismanaged on multiple occasions. The audit scrutinized a sample of $12.9 million awarded to 18 grant recipients and found that numerous grant recipients violated the terms of the program. These violations included failing to provide receipts for reimbursements, failing to maintain logs of individuals served, or providing services for individuals who didn’t even have a DHS record. Overall, the Inspector General was unable to properly account for $7.4 million, or 58% of the sample. If that pattern held for the full appropriation of $110 million, FEMA would be unable to account for nearly $64 million.
The Emergency Food and Shelter Program is managed by a national board consisting of representatives from the American Red Cross, Catholic Charities, the United Way, and other charities and religious organizations. The National Board establishes the program’s policies, procedures and guidelines. FEMA serves as the national chair of the board. United Way is the board’s “fiscal agent and Secretariat” in charge of collecting receipts and supporting documentation from grantees, placing it in the spotlight following this report. Ultimately, however, the Inspector General blamed FEMA for not providing sufficient oversight of the charities involved:
These issues occurred because FEMA did not provide sufficient oversight and relied on local boards and fiscal agents to enforce the funding and application guidance. As a result, FEMA, as National Board Chair, cannot ensure the humanitarian relief funds were used as intended by the funding and application guidance. We questioned $7.4 million in humanitarian relief fund spending by LROs because, after several attempts, we were unable to obtain the required supporting documentation.
The Inspector General highlighted several egregious examples of fraud, waste, and abuse in his report. One recipient was reimbursed twice for the same expenditure, pocketing nearly $80,000 when they were owed $40,000. Only when brought to their attention by the IG did they resolve it by “offsetting a future payment.” Separately, a contractor charged $8.9 million for labor by simply multiplying 24 hours per day per employee by the employee’s wage rate. When asked for documentation, they could only prove $1.5 million in actual wages paid.
As the report further explains, the program prioritized grants for “communities most impacted by the humanitarian crisis at the Southwest border.” However, the Inspector General found that grantees “did not always provide supporting documentation for families and individuals they assisted.” This was probably because, of the sample population reviewed by the Inspector General, 24% of aliens were not eligible for the services they received. The audit found that many grantees did not have any record that the aliens they assisted had an encounter with DHS. Some of the grantees provided services to illegal aliens services before DHS encountered them. Conversely, an alien encountered in October 2017 “obtained humanitarian relief services 1,235 days later, in March 2021.”
The IG report made two recommendations to improve oversight of the program: (1) Resolve the $7.4 million in “questioned costs” and change FEMA’s requirements for grant applications to reduce the likelihood of future unsupported expenditures; and (2) Implement oversight measures to enforce application requirements for future appropriations, to specifically include a “risk-based methodology” for ongoing review of awards.
FEMA agreed with both recommendations, updated the application requirements, and disallowed reimbursement for “on call” hours during which employees are not actually working. However, the IG was not entirely satisfied with their response, as they failed to adequately resolve the $7.4 million in questionable costs already identified or to identify officials responsible for implementing the recommendations. As of this writing, both recommendations remain open.
The OIG report is all the more alarming because Congress keeps growing the program, appropriating millions more to the EFSP to provide services to illegal aliens coming across the southern border. In March 2022, Congress appropriated an additional $150 million to the EFSP to aid illegal aliens. In December 2022, Congress passed a massive omnibus spending bill that gives FEMA yet another $800 million to provide illegal aliens services through the EFSP. It also directs FEMA to transform EFSP into an entirely new program. The new program, the Shelter and Services Program (SSP), is intended to help CBP “effectively manage migrant processing” and prevent the overcrowding of Border Patrol facilities. Congress authorized FEMA to use part of the $800 million in the current program (EFSP), while it transforms it into the new program (SSP).
On February 28 of this year, DHS announced it would begin hosting “a series of listening sessions” to inform the creation of the new shelter and services program (or SSP), soliciting input from past recipients and prospective future applicants. However, it does not appear that the American people will have a seat at the table. FAIR will continue to monitor the development of this program and remain vigilant against waste, fraud, and abuse of taxpayer dollars.