AMU Emergency Management Homeland Security Public Safety

DHS IG Finds Substantial Abuse of FEMA Grant by Houston Hospital

By Anthony Kimery
Homeland Security Today

A $32.4 million Federal Emergency Management Agency (FEMA) grant made to a Houston, Texas hospital to repair damages from Hurricane Ike in 2008 was grossly mismanaged and misused, according to a new Department of Homeland Security (DHS) Inspector General (IG) audit report.

The IG’s audit report, FEMA Should Recover $32.4 Million in Grant Funds Awarded to Riverside General Hospital, Houston, Texas, also cites lax monitoring of hospital officials’ use of the taxpayer-funded grant awarded by the Texas Division of Emergency Management, a FEMA grantee.

The IG’s audit, undertaken at FEMA’s request, examined 100 percent of the grant award. The DHS Inspector General found “Riverside officials blatantly misspent disaster recovery funds on day-to-day operations of the hospital and on legal fees, insurance, gift cards, as collateral for loans, and on other unverifiable items with no connection to the damages caused by Hurricane Ike’”

“This is an unconscionable misuse of Federal disaster resources,” said Inspector General John Roth. “The entire amount of this grant should be recovered to protect these funds from further abuse.”

FEMA “officials generally agreed” with the IG’s recommendation that FEMA should disallow $17.6 million and deobligate the remaining $14.8 million in grant funds.

Furthermore, the IG stated, “FEMA and Texas should suspend all grant activities until Riverside can account for its expenditures. Texas should also strengthen its oversight of public assistance grant recipients.”

The IG report that, “Riverside’s misuse of federal funds did not end in 2012 with the indictment and departure of its Chief Executive Officer and others on charges of bilking Medicare out of $158 million.”

“Following the indictments,” the IG concluded, “Riverside’s remaining management continued to misuse and mismanage federal funds – this time FEMA funds.”

By 2013, the IG said “Texas had advanced $17.6 million of the $32.4 million FEMA grant to Riverside. Riverside alleged that it spent $13.2 million of the $17.6 million received for disaster expenses.”

However, DHS’s Inspector General found “Riverside completely disregarded federal grant requirements, and Texas did not adequately monitor Riverside’s grant activities. In fact, Riverside spent $7.9 million to fund its hospital operations and other unverifiable items.”

Read the full article at HSToday.

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