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

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.

In its review, GAO disclosed that: (1) as a result of inadequate coordination and other management weaknesses, duplicative and questionable benefits occurred in an estimated 26 percent of the cases sampled; (2) grants were awarded without adequate determination of financial eligibility or in a manner that was not consistent with other disaster programs; and (3) emergency food stamps were issued without evidence of need or sufficient controls. Additionally, GAO doubts that reasonable safeguards were employed to ensure that only proper disaster benefits were provided and that there was a lack of necessary documentation to follow up on certain cases of suspected fraud and abuse.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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