Hundreds of millions of dollars were lost due to a misinterpretation of a Federal Emergency Management Agency rule that funds the replacement or repair of facilities after a natural disaster, according to a recent Homeland Security Department inspector general report.
FEMA’s public assistance program provides financial assistance for people in the aftermath of hurricanes, earthquakes, tornadoes, floods and terrorists attack. The agency spends around $10 billion every year for the Disaster Relief Fund to help people rebuild after a natural disaster.
Under the 50 percent rule, FEMA will replace a facility if the estimated cost of repair exceeds 50 percent of the estimated cost to replace it.
But applying FEMA’s 50 percent repair or replace rule correctly can be very difficult and susceptible to error, misinterpretation and manipulation, the report dated Aug. 7 said.