FEMA to New Yorkers: It’s payback time

NYC Restore workers helped New Yorkers find aid after Sandy. Now some are being asked to send a refund to the feds. Photo: Edward Reed

The $2,000 from the Federal Emergency Management Agency was supposed to pay for a room at the La Quinta Inn in Park Slope. Instead, a desperate Queens couple displaced by superstorm Sandy used the money for food and transportation.

“They haven’t used their money the way they were supposed to,” conceded Janeth Bonilla of Good Shepherd Services, who is working with the couple to secure housing. (Currently living in a shelter, they asked not to be identified because they are still seeking government aid.) As a result, they no longer qualify for additional FEMA grants. And legally, they are on the hook to repay the $2,000 back to FEMA.

Bonilla says she has seen other Sandy victims in their predicament, many of them squeezed in New York’s costly housing market.

“If you are receiving $2,000 to move and rent an apartment, and you need $5,000, you would say ‘Okay, I don’t have $5,000 to rent an apartment but I still need to buy myself food,’” said Bonilla. “‘I’m going to end up needing this money for something else.’”

FEMA does not provide assistance for immediate needs such as food and transportation; in the wake of a disaster it relies on private organizations like the Red Cross for those services. What it does provide are up to about $32,000 in grants to qualified victims to help with home and property repairs, pay the rent on alternative housing, or “other” needs.

Applicants sign a letter when they apply certifying that they will spend their grant as intended and will repay the money to FEMA if they do not.

FEMA reports it has distributed about $935 million in grants in New York state since superstorm Sandy. An agency spokesperson said it makes sure application reviews eliminate improper payments that might need to be recouped.

Advocates helping New Yorkers get disaster aid say they have seen many clients lose out on rental aid after getting a small initial grant. FEMA provides up to 18 months’ cash for rent. “You get rental assistance, let’s say $2,500,” Tashi Lhwa, a staff attorney at the Legal Aid Society. “If you spend it on anything else then when it comes to recertifying, there is a good chance if they find out about it, they will deny you.”

Added Lhwa, “People get constantly denied recertification.”

FEMA’s wave of rejected applications signals more trouble down the road for grant recipients. Following hurricanes Katrina, Rita, Gustav and Ike in the Gulf Coast region, the agency sought to take back hundreds of millions of dollars out of $8 billion in assistance payments. (After public uproar, Congress intervened to block most of these so-called recoupments by FEMA.)

Now Sandy is a whole new ballgame. Already, FEMA has begun to demand funds back from applicants who received grants but whom the agency subsequently found to be unqualified. That’s what happened to one Brooklyn client aided by Ann Dibble, director of the storm response unit at New York Legal Assistance Group. He had applied and won aid as a homeowner, only to receive a letter in mid February informing him that he would have to repay his disaster grant. FEMA contends he did not own the home for which he had sought funds to repair damage. Arguing that her client is the de facto owner even though he does not have his name on the deed, Dibble is now working with him to contest FEMA’s attempt to recoup.

FEMA’s letter, from which Dibble has redacted personal information:

“We are just under four months out,” Dibble said. She said she had since seen other recoupment letters from FEMA, and expects based on the Gulf Coast experience that sooner or later the agency will seek funds back from those who misspent them. “This is the first of what we expect to be many.”

Applicants for FEMA disaster grants go through a due-diligence review, including documentation of damage to a home by an inspector, according to John Mills, a department spokesperson in New York City. But while that ensures applicants are eligible, it’s up to the person getting the check to spend it as directed.

“Bottom line is, you are supposed to spend the money on what you are supposed to spend it on,” Mills said.

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