FEMA Cannot Ensure Humanitarian Funding Compliance

OIG-26-04 FINAL REPORTFEMA Cannot Ensure Humanitarian Funding for Aliens

Complied with Laws and Regulations

Washington, DC 20528 | www.oig.dhs.gov

MEMORANDUM FOR: Karen S. Evans Senior Official Performing the Duties of the Administrator Federal Emergency Management Agency FROM: Joseph V. Cuffari, Ph.D. Inspector General FEMA Cannot Ensure Humanitarian Funding for Aliens Complied SUBJECT: with Laws and Regulations FEMA Cannot Ensure Humanitarian Funding for Attached for your action is our final report, Aliens Complied with Laws and Regulations . We incorporated the formal comments provided by your office. The report contains five recommendations aimed at improving FEMA's oversight controls for humanitarian funding during the grant closeout process for the Emergency Food and Shelter Program-Humanitarian Relief and Shelter and Services Program. Your office concurred with all five recommendations. Based on information provided in your response to the draft report, we consider the recommendations open and resolved. Once your office has fully implemented the recommendations, please submit a formal closeout letter to us within 30 days so that we may close the recommendations. The memorandum should be accompanied by evidence of completion of agreed-upon corrective actions and of the disposition of any monetary amounts. Please send your response or closure request to OIGAuditsFollowup@oig.dhs.gov. Inspector General ActConsistent with our responsibility under the , we will provide copies of our report to congressional committees with oversight and appropriation responsibility over the Department of Homeland Security. We will post the report on our website for public dissemination. Please contact me with any questions, or your staff may contact Craig Adelman, Deputy Inspector General, Office of Audits, at (202) 981-6000. Attachment

OIG Project No. 24-016-AUD-FEMA, CBP

DHS OIG HIGHLIGHTS

FEMA Cannot Ensure Humanitarian Funding for Aliens Complied with Laws and Regulations What We Found

Why We Did This The Federal Emergency Management Agency (FEMA) cannot ensure non-Federal entities used Emergency Food and Shelter Program-Audit Humanitarian Relief (EFSP-H) and Shelter and Services Program (SSP) funding in fiscal years 2023 and 2024 in compliance with applicable laws and regulations. Without improved oversight, FEMA FEMA awarded nearly $1.4 billion faces an increased risk of funding unallowable costs and making in grant funding through EFSP-H duplicate payments when administering grants. and SSP in FYs 2023 and 2024. The grant funds supplemented Specifically, we found FEMA: humanitarian relief efforts of state and local governments and • did not review EFSP-H expenditures to ensure funds were used nonprofit organizations (non-for allowable costs and eligible aliens, resulting in $425 million in Federal entities) assisting aliens questioned costs; encountered by the Department of Homeland Security. We • did not consistently review SSP payment requests to verify that conducted this audit to determine costs were allowable, resulting in $16.5 million in questioned the extent to which FEMA ensured costs; and non-Federal entities used EFSP-H and SSP funding in FYs 2023 and • did not perform verification to prevent duplication of funding 2024 in compliance with between EFSP-H and SSP grants. applicable laws and regulations. What We These deficiencies occurred because FEMA did not establish and implement necessary internal controls to review EFSP-H and SSP Recommend expenditures. Although DHS terminated the SSP grant awards after we began fieldwork, we completed this audit as our findings may help FEMA avoid fraud, waste, or abuse during program closeout. We made five recommendations Data Access: FEMA denied us direct, read-only access to the FEMA to improve FEMA's oversight Grants Outcomes back-end database. After multiple delays, FEMA controls for humanitarian instead provided raw data for SSP grants and then direct, read-only funding during the EFSP-H and access to SSP award records through the system's front-end interface. SSP grant closeout process. FEMA Response

For Further Information:

Contact OIG Public Affairs at (202) 981-6000 or DHS-OIG.OfficePublicAffairs@oig.dhs.gov. FEMA concurred with all five recommendations. Appendix B

contains FEMA's management response in its entirety.

OIG-26-04

Background

From fiscal years 2019 to 2024, Congress authorized the Federal Emergency Management Agency (FEMA) to provide grant funding to supplement the humanitarian relief efforts of state and local governments and nonprofit organizations (non-Federal entities) assisting aliens 1 2encountered and released by the Department of Homeland Security. The grant funds were awarded to provide food, shelter, basic medical care, transportation, and other supportive services, and distributed through FEMA's Emergency Food and Shelter Program-Humanitarian Relief (EFSP-H) and Shelter and Services Program (SSP). 3

Emergency Food and Shelter Program-Humanitarian Relief

In FYs 2019, 2021, and 2022, Congress appropriated a total of $290 million to FEMA for EFSP-H. FEMA awarded the funds through grants to the National Board, which then disbursed the 4funds as subawards to non-Federal entities. The program involved multiple organizations and responsible officials, each with different roles:

• The National Board served as the governing body to administer EFSP-H. It established
  program policies, procedures, and guidelines; made award decisions; and oversaw the use of funds. The Board was composed of six non-Federal organizations and FEMA.

• The National Board's designated fiscal agent and secretariat carried out the day-to-day
  administrative duties and functions on behalf of the Board. This included receiving, distributing, and reconciling FEMA funds, and collecting supporting documentation.

Hereafter, we refer to state and local governments and nonprofit organizations as non-Federal entities. 1 An alien is any person who is not a U.S. citizen or a U.S. national. 8 United States Code (U.S.C.) § 1101(a)(3). 2 FEMA's Emergency Food and Shelter Program (EFSP) was established in March 1983 through the passage of the 3Temporary Emergency Food Assistance Act of 1983 (Title I of P.L. 98−8) to supplement the work of local social service organizations (nonprofit, faith-based, and governmental) by providing food, shelter, and support services to individuals and families experiencing economic crisis, and to help prevent homelessness. EFSP was Stewart B. McKinney Homeless Assistance Act of 1987later authorized under the (Title III of P.L. 100−77), which McKinney-Vento Homeless Assistance Actwas renamed the in 2000. EFSP is codified at 42 U.S.C. §§ 11331 et. seq. In FY 2019, Congress expanded the program's mission by authorizing FEMA to provide humanitarian relief through EFSP-H grants to non-Federal entities supporting aliens encountered by DHS along the Southern FEMA border. Four years later, Congress established SSP to replace EFSP-H. For additional information, see Assistance for Migrants Through the Emergency Food and Shelter Program-Humanitarian (EFSP-H) and Shelter and Services Program (SSP) , Congressional Research Service R47681, August 31, 2023. McKinney-Vento Homeless Assistance Act The (Title III of P.L. 100−77) directed FEMA to constitute a National 4Board for the purpose of administering EFSP. According to this Act, the National Board shall establish written guidelines for carrying out the program, including methods for identifying individual localities with the highest need; methods for determining the amount and distribution of funds to such localities; eligible program costs; and responsibilities and reporting requirements of the National Board, its recipients, and service providers.

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• FEMA's Individual Assistance Division Director served as the National Board Chair. The Chair acted as Federal liaison to the Board and provided the Board with administrative support. Separately, in its role as grantor of EFSP-H funds, FEMA was responsible for monitoring the grants and providing technical assistance to the grantee (the Board)

and did so through FEMA's Individual Assistance Division.

• The local board, which served as the governing body for its respective county or city,
  was responsible for reviewing funding applications, determining applicant eligibility, submitting applications to the National Board, and monitoring the use of funds.

• The fiscal agent, a local recipient organization designated by the local board, received
  and disbursed EFSP-H funds to vendors, maintained financial documentation, and monitored the use of funds.

Shelter and Services Program

Due to increased migration along the Southern border, in FY 2023 Congress authorized FEMA and U.S. Customs and Border Protection (CBP) to establish a new grant program, SSP, to replace EFSP-H. DHS Appropriations Acts directed CBP to transfer $1.45 billion to FEMA for 5SSP -- $800 million in FY 2023 and $650 million in FY 2024. Of the $800 million transferred in FY 2023, FEMA was authorized to use up to $785 million to continue services under EFSP-H while establishing SSP to ensure uninterrupted support.

FEMA's Grant Programs Directorate and CBP's Operations Support Office established and

jointly administered SSP.

• As the Federal awarding agency, FEMA was responsible for developing SSP program
  requirements, issuing notices of funding opportunity (NOFO), reviewing applications, 6making grant awards, monitoring the use of funds, and conducting award closeout procedures to ensure compliance with laws and regulations.

• CBP provided FEMA with relevant data and models regarding aliens encountered at
  U.S. borders, recommended funding priorities, and participated in the application review process. Department of Homeland Security Appropriations Act, 2023 (Title II, Division F of Pub. L. No. 117−328) and 5Department of Homeland Security Appropriations Act, 2024 (Title II, Division C of Pub. L. No. 118−47) directed

CBP to transfer the funds from CBP's Operations and Support account to FEMA's Federal Assistance account. A NOFO is a formal announcement of the availability of funding through a financial assistance program from a 6Federal awarding agency. It provides information on the award, including who is eligible to apply, evaluation criteria for selecting the awardee, required components of an application, and how to submit the application.

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As of September 30, 2024, FEMA awarded nearly $1.4 billion in grant funding during FYs 2023 and 2024. Of this amount, FEMA awarded $425 million to the National Board for EFSP-H in FY 2023, and about $1 billion to 84 non-Federal entities for SSP in FYs 2023 and 2024. Table 1

provides a summary of FEMA's grant awards.

Source: DHS Office of Inspector General analysis of FEMA records On January 28, 2025, DHS directed FEMA to place a hold on the disbursement of all grant funds, including SSP funding, to non-Federal entities whose activities were related to immigration. The funding hold did not apply to EFSP-H, as the National Board had already 7disbursed all FY 2023 program funding, and the related subaward spending period ended on December 31, 2024. On March 31, 2025, DHS terminated all SSP grant awards, stating the program was not aligned with the Department's priorities related to immigration enforcement and border security. Subsequently, on April 1, 2025, FEMA issued letters to non-Federal entities terminating all FY 2023 and 2024 SSP grant awards. The National Board has initiated grant closeout procedures for EFSP-H, and FEMA has 8initiated grant closeout procedures for SSP. The closeout process includes reviewing final financial reports from non-Federal entities, determining allowable costs, recovering 9

, Direction on Grants to Non-governmental Memorandum from DHS Secretary for Component and Office Heads7Organizations, January 28, 2025. According to this memorandum, the reasons for this freeze included (1) concerns

that these grants may be funding illegal activities, such as encouraging or inducing illegal immigration, 8 U.S.C. § 1324(a)(1)(A)(iv), or illegal harboring of illegal aliens, 8 U.S.C. § 1324(a)(1)(A)(ii)-(iii); (2) concerns that there may be racially discriminatory language in certain grants; and (3) concerns that these grants may not be an efficient use of Government resources. 2 Code of Federal Regulations (C.F.R.) §§ 200.344−345. 8 To be allowable, costs must be reasonable in nature and amount, allocable to the FEMA award, included in the 9approved budget, and adequately documented. 2 C.F.R. § 200.403.

3 OIG-26-04 Table 1. FEMA Grant Awards through EFSP-H Award Amount Fiscal Year Award Type $363.8 Million $425.0 Million $640.9 Million $1.4 Billion and SSP in FYs 2023 and 2024 SSP EFSP-H and SSP Total EFSP-H SSP

unallowable costs, and de-obligating unused funds. According to Department officials, DHS repurposed SSP funding for FY 2025 and eliminated SSP funding in FY 2026. 10 11 Although DHS terminated the SSP grant awards after we began fieldwork, we continued the audit as our findings can help FEMA avoid potential fraud, waste, or abuse during program closeout. In an earlier report, we identified weaknesses in FEMA's oversight of funding 12awarded to the National Board, which left EFSP-H funding susceptible to fraud, waste, and abuse. Specifically, we found non-Federal entities did not always provide documentation for claimed reimbursements and did not maintain information to verify whether the aliens served were eligible to receive services under EFSP-H. This occurred because FEMA relied on local

boards and fiscal agents to enforce the Board's guidance. We made two recommendations to

improve FEMA's oversight and enforcement for future appropriations. FEMA concurred with 13both recommendations. The second recommendation was closed, and the first recommendation remains open. We conducted this audit to determine the extent to which FEMA ensured non-Federal entities used EFSP-H and SSP funding in FYs 2023 and 2024 in compliance with applicable laws and regulations.

Results of Audit Key Finding 1. FEMA Did Not Review Expenditures for FY 2023 EFSP-H Awards

FEMA's Individual Assistance Division and the National Board did not review ongoing

expenditures associated with FY 2023 EFSP-H awards to ensure humanitarian funds were used $425 million in questioned costsfor allowable costs and eligible aliens, resulting in . Although FEMA and the Board issued new guidance to partially address recommendation 1 and close recommendation 2 from our 2023 report, we found they did not implement the guidance to provide appropriate oversight of EFSP-H expenditures.

For FY 2025, Congress enacted three continuing resolutions that funded SSP at the FY 2024 level of $650 10 Continuing Appropriations and Extensions Act, 2025 American Relief Act, million: the (Pub. L. No. 118−83); the 2025 Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. No. 118−158); and the (Pub. L. No. 119−4). Department of Homeland Security Fiscal Year 2026 Congressional Justification , June 12, 2025. 11FEMA Should Increase Oversight to Prevent Misuse of Humanitarian Relief Funds , OIG-23-20, March 28, 2023. 12 Recommendation 1 was for FEMA to ensure the National Board resolves the $7.4 million in questioned costs 13and incorporates controls in EFSP-H guidance to minimize future reimbursements of unsupported costs. Recommendation 2 was for FEMA to ensure the National Board implements oversight measures to enforce EFSP-H guidance for future supplemental appropriations including by developing a risk-based methodology to review a sample of ongoing funding execution for future supplemental appropriations to ensure funds approved are reviewed and reconciled for completeness and accuracy and supported with appropriate documentation.

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FEMA and the National Board Did Not Collect Quarterly Reports to Review Spending

FEMA and the National Board did not collect quarterly spending reports to review ongoing expenditures related to EFSP-H funding, as required. In response to our 2023 report, FEMA and the Board issued new EFSP-H guidance requiring non-Federal entities to submit 14quarterly reports with spending information about services provided to aliens encountered by DHS. Despite issuing a policy to provide more oversight on how funds were spent, FEMA and the Board did not enforce the new requirement and did not collect any quarterly reports. This occurred because FEMA did not ensure the National Board established and implemented a system to collect the quarterly reports. FEMA and the Board continued to rely on local boards and fiscal agents to review ongoing expenditures without pursuing other methods. According to FEMA officials, the Board disbursed advanced funding directly to the non-Federal

entities' bank accounts. However, the Board did not have access to these accounts, so it

could not monitor or report on how the funds were used. Officials explained that information on final expenditures and remaining balances will not be available to FEMA until the Board completes its review, reconciliation, and grant closeout process for EFSP-H subawards, scheduled for completion by September 30, 2026. As a result, FEMA and the National Board cannot verify that $425 million in EFSP-H funding was used for allowable costs.

FEMA and the National Board Did Not Ensure EFSP-H Funds Were Used for Eligible Aliens

FEMA and the National Board did not ensure non-Federal entities provided EFSP-H services only to eligible aliens -- those encountered and released by DHS. In response to our 2023 report, FEMA and the Board issued new EFSP-H guidance requiring non-Federal entities to 15maintain documentation with alien registration numbers (A-Number) and each alien's first 16and last name for 3 years. However, the guidance did not require non-Federal entities to submit the A-Number data to the Board or CBP for validation. We found that neither FEMA 17nor the Board collected A-Number and name data from non-Federal entities. Further, FEMA Humanitarian Relief Funding Guidance Fiscal Year 2023 (Continuing Resolution $75 Million) National Board, 14Application and Funding Guidance , December 2022. Humanitarian Relief Funding Guidance Fiscal Year 2023 (Department of Homeland Security National Board, 15Appropriations Act, 2023 - $350 Million) Application and Funding Guidance , March 2023.

The A-Number is a unique number assigned to aliens encountered by DHS to track their interactions with DHS. 16Only aliens with an A-Number are eligible to receive services under EFSP-H. DHS' Enforcement Integrated Database stores and maintains information related to persons encountered 17during immigration and criminal law enforcement investigations and operations conducted by U.S. Immigration and Customs Enforcement, U.S. Citizenship and Immigration Services, and CBP. CBP can perform validation checks to ensure an alien's A-Number, first name, and last name match information in the database. This validation process aims to avoid the reimbursement of costs for services provided to ineligible aliens.

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officials stated the Board did not plan to collect and validate such information as part of its review, reconciliation, and grant closeout process for EFSP-H subawards. FEMA cited two factors contributing to the lack of A-Number collection:

• Collecting A-Numbers at the National Board level would have required significant
  privacy controls to handle the sensitive personally identifiable information, thus increasing the complexity and administrative cost of the program. Therefore, the Board did not feel it was justified or feasible to collect A-Numbers.

• The statutory structure for EFSP-H resulted in limited Federal control, as FEMA did not
  have unilateral authority over the National Board. DHS and FEMA supported the creation of SSP as a better structure to monitor the use of funds. Without the collection and validation of A-Numbers and alien's first and last names, FEMA cannot ensure that non-Federal entities used humanitarian funding for eligible aliens.

Key Finding 2. FEMA Did Not Consistently Review SSP Payment Requests

FEMA's Grant Programs Directorate did not consistently review SSP payment requests to verify

whether costs associated with humanitarian funds for aliens were allowable. 2 C.F.R. Part 200 Grants Management Policyand FEMA Manual 205-0-1, , Chapter 5, require FEMA to ensure non- Federal entities spend funds for allowable costs in compliance with applicable laws, regulations, and program requirements. According to the FY 2023 SSP NOFO and related FEMA training material, non-Federal entities must submit payment requests for reimbursement and 18upload supporting documentation in FEMA Grants Outcomes (FEMA GO), including: 19

• a spreadsheet with A-Number data or evidence of DHS processing, first and last names,
  and corresponding DHS release dates and services dates (start and end dates); and

• proof of payment, such as canceled checks, credit card statements, personnel
  timesheets, and payroll reports for labor costs, as well as proof of purchase, including itemized receipts and invoices with sufficient detail. We reviewed a judgmental sample of seven approved payments to five non-Federal entities, totaling $48.2 million. This represented nearly 87 percent of the $55.6 million in payments Requesting a Payment Shelter and Services Program Fiscal Year 2023 Recipients FEMA presentation, and 18Shelter and Services Program Payment Request Slick Sheet , March 2024.

FEMA GO is the grants management system of record for SSP. FEMA Manual 205-0-1 requires staff to maintain 19an official award file in FEMA GO containing records associated with administrative, financial, and programmatic activities throughout the grants management lifecycle.

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FEMA made against the total $1 billion in SSP awards obligated in FYs 2023 and 2024. Based 20on our review, we questioned $16.5 million (or 34 percent of the $48.2 million) associated with six of the seven payments in the sample. Specifically, we found:

• FEMA did not ensure required documents, including A-Number data, proof of payment,
  or proof of purchase, were uploaded to FEMA GO for three payments, resulting in $7.8 million in questioned costs.

• Although FEMA requested that CBP perform A-Number validation checks in the DHS
  Enforcement Integrated Database for aliens assisted through SSP, FEMA did not use the results of these checks to accurately calculate allowable costs for two payments, $5.6 million in questioned costsresulting in . FEMA made calculation errors and did not ensure that invoice service dates aligned with the dates in the A-Number data.

• FEMA did not ensure that invoices submitted for three payments included sufficient
  $3.1 million in questioned costsdetail to support the claimed SSP costs, resulting in . Invoices for laundry services and medical care listed only flat amounts without itemized breakdowns or applicable billing rates.

This occurred because FEMA's Grant Programs Directorate launched SSP without developing and implementing formal program guidance for reviewing SSP payment requests. Instead, FEMA officials relied on unsigned, ad-hoc policies and procedures. Without improved oversight during the grant closeout process, FEMA faces an increased risk of funding unallowable costs.

Key Finding 3. FEMA Did Not Perform Verification to Prevent Duplication of Funding

FEMA and the National Board relied solely on self-certifications from non-Federal entities 21and did not perform verification to ensure costs were not claimed under both the EFSP-H and SSP programs. Federal regulations and FEMA guidance prohibit duplication of funding. 22 The FY 2023 and 2024 EFSP-H and SSP grants were at risk of duplication of funding because they provided similar services and because the spending periods for EFSP-H subawards

As of September 30, 2024, FEMA paid about $55.6 million to non-Federal entities on the SSP grants awarded in 20FYs 2023 and 2024. We previously reported FEMA's use of self-certification is not a reliable control to prevent duplication of 21 FEMA Has Made More than $3 Billion in Improper and Potentially Fraudulent funding and improper payments ( Payments for Home Repair Assistance since 2003 FEMA Did Not Implement , OIG-20-23, April 6, 2020, and Controls to Prevent More than $3.7 Billion in Improper Payments from the Lost Wages Assistance Program , OIG- 22-69, September 16, 2022). 2 C.F.R. § 200.405(c) and FEMA Manual 205-0-1, § 4.3.3.2. 22

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overlapped with the periods of performance for SSP grant awards by up to 22 months due to multiple EFSP-H extensions (see Figure 1). Although non-Federal entities were required to provide self-certifications, FEMA was unable to provide detailed EFSP-H spending data, which prevented us from testing for potential duplication between EFSP-H and SSP during the overlapping timeframes. Figure 1. EFSP-H and SSP Overlapping Periods of Performance

Source: DHS OIG analysis of FEMA data FEMA and the National Board relied on self-certifications because they did not establish and implement a review process to prevent duplication of funding between EFSP-H and SSP grants and did not collect detailed information, including a detailed breakdown of EFSP-H funding amounts by service cost categories, that would have made such a review possible. As a result, FEMA has limited assurance that it prevented duplication of funding between EFSP-H and SSP grant awards. Without improved oversight during the grant closeout process, FEMA faces an increased risk of duplication between EFSP-H and SSP payments.

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Recommendations

Recommendation 1: We recommend the Director of FEMA's Individual Assistance Division ensure the National Board resolves the $425 million in questioned costs associated with the Emergency Food and Shelter Program-Humanitarian Relief funding during the grant closeout process by collecting supporting documentation, determining whether the costs are allowable, and recouping any costs that are not allowable. Recommendation 2: We recommend the Assistant Administrator of FEMA's Grant Programs Directorate resolve the $16.5 million in questioned costs associated with the Shelter and Services Program funding identified in our report. FEMA should collect supporting documentation, determine whether the costs are allowable, recoup any costs that are not allowable, and upload the necessary information to the FEMA Grants Outcomes system of record. Recommendation 3: We recommend the Assistant Administrator of FEMA's Grant Programs Directorate review payment requests during the grant closeout process for all Shelter and Services Program awards in FY 2023 and FY 2024 to minimize the reimbursement of unsupported costs. FEMA should collect supporting documentation, determine whether the costs are allowable, and upload the necessary information to the FEMA Grants Outcomes system of record. Recommendation 4: We recommend the Assistant Administrator of FEMA's Grant Programs Directorate develop and implement controls to ensure FEMA officials and grant recipients use FEMA Grants Outcomes as the system of record to maintain required documentation supporting all phases of the grants management lifecycle. Recommendation 5: We recommend the Director of FEMA's Individual Assistance Division and

the Assistant Administrator of FEMA's Grant Programs Directorate establish a review process

to ensure there was no duplication of FY 2023 funding between the Emergency Food and Shelter Program-Humanitarian Relief and the Shelter and Services Program. FEMA should recoup any duplicate payments identified.

Management Comments and OIG Analysis

FEMA provided management comments on a draft of this report. FEMA concurred with all five recommendations, which we consider open and resolved. Appendix B contains a copy of FEMA's response in its entirety. FEMA also provided technical comments to our draft report. We incorporated these comments in our report, as appropriate. A summary of FEMA's response to the recommendations and our analysis follows. 9 OIG-26-04

FEMA disagreed with some of the findings in our report related to the questioned costs we identified during our review of sampled SSP grant payments. Specifically, FEMA disagreed that it made calculation errors when examining A-Number records, resulting in $5.6 million in questioned costs. FEMA also disagreed that it did not ensure invoices submitted for three payments included sufficient detail to support the claimed costs, resulting in $3.1 million in questioned costs. Our analysis showed that FEMA did not always accurately calculate the allowable costs and maintain sufficient documentation to support the claimed costs, as required. Therefore, we stand by our conclusion and the questioned costs. FEMA Response to Recommendation 1: Concur. FEMA's Individual Assistance Division will work to close out the EFSP-H grant program and resolve the $425 million in questioned costs. Pursuant to 2 C.F.R. Section 200.344, the National Board must submit a closeout package to FEMA that includes all final financial, performance, and other reports and documentation.

FEMA's Individual Assistance Division will complete a closeout review by collecting supporting

documentation, determining whether the costs are allowable, and recouping any costs that are not allowable. Estimated completion date: December 31, 2026. OIG Analysis: We consider these actions responsive to the recommendation, which is open and resolved. The recommendation will remain open until FEMA submits documentation showing the completion of these corrective actions. FEMA Response to Recommendation 2: Concur. FEMA's Grant Programs Directorate will continue to collect supporting documentation during the closeout phase to determine whether final payment request costs are allowable as part of the payment review process. All previous and final payments will be reviewed before awards are closed out. If it is determined that any costs are not allowable, all options will be pursued to recoup those costs, as appropriate, and the necessary documentation will be uploaded to FEMA GO. Estimated Completion Date: September 30, 2026. OIG Analysis: We consider these actions responsive to the recommendation, which is open and resolved. The recommendation will remain open until FEMA submits documentation showing it has resolved the $16.5 million in questioned costs associated with the SSP funding identified in our report. FEMA Response to Recommendation 3: Concur. As part of the SSP closeout process, and in accordance with chapter 6 of FEMA Manual 205-0-1, FEMA will continue to review all previous and final payment requests for allowability. FEMA will implement internal SSP award closeout procedures addressing how it will verify that costs and service dates are within the period of performance, and ensure all documents are uploaded to FEMA GO. In addition, the payment request will be routed to FEMA and DHS leadership for final determination, as appropriate. Estimated Completion Date: September 30, 2026. 10 OIG-26-04

OIG Analysis: We consider these actions responsive to the recommendation, which is open and resolved. The recommendation will remain open until FEMA submits documentation showing the completion of these corrective actions. FEMA Response to Recommendation 4: Concur. FEMA's Grant Programs Directorate implemented controls to address this matter and will provide them to DHS OIG for reference. The FY 2023 SSP NOFO identifies FEMA GO as the system of record for SSP. Recipients already must use FEMA GO to submit their quarterly reports, amendments, and payment requests. To

strengthen oversight, FEMA's Grant Programs Directorate is implementing both a "Payment Request Reviewer Guide" and a "Payment Review Checklist," which provide clear instructions

for ensuring supporting documentation is attached within FEMA GO and for reviewing and reconciling reimbursement requests to ensure compliance and accuracy. Estimated Completion Date: February 27, 2026. OIG Analysis: We consider these actions responsive to the recommendation, which is open and resolved. The recommendation will remain open until FEMA submits documentation showing the completion of these corrective actions. FEMA Response to Recommendation 5: Concur. FEMA's Individual Assistance Division will establish a review process to ensure there was no duplication of FY 2023 funding between EFSP-H and SSP. As the EFSP-H FY 2023 period of performance ends on September 30, 2026, FEMA will not be able to implement a review process until the National Board provides the closeout package and the program is officially closed. Once this process is complete, FEMA's Individual Assistance Division will complete a sampling analysis to identify any duplicate payments and recoup those funds, as appropriate. Estimated Completion Date: December 31,

2026.

OIG Analysis: We consider these actions responsive to the recommendation, which is open and resolved. The recommendation will remain open until FEMA submits documentation showing the completion of these corrective actions.

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Appendix A: Objective, Scope, and Methodology

The objective of this audit was to determine the extent to which FEMA ensured non-Federal entities used EFSP-H and SSP funding in FYs 2023 and 2024 in compliance with applicable laws and regulations. To answer our objective, we reviewed applicable Federal laws and regulations along with DHS, FEMA, CBP, and National Board policies, procedures, and guidance associated with the allocation, award, and administration of EFSP-H and SSP funding. We also reviewed DHS OIG and U.S. Government Accountability Office reports, relevant media articles, congressional testimonies, and DHS NOFOs. To understand the Department's process related to allocating, awarding, and administering EFSP-H and SSP funding, we interviewed officials from:

• FEMA's Individual Assistance Division, Grant Programs Directorate, Office of the Chief
  Financial Officer, Office of Chief Counsel, and Office of the Chief Security Officer

• CBP's Operations Support Office and Policy Directorate

• National Board's Fiscal Agent and Secretariat

• DHS' Office of Intelligence and Analysis and Office of the Chief Financial Officer
  We analyzed the universe of humanitarian relief funds awarded to non-Federal entities through EFSP-H and SSP grants in FYs 2023 and 2024. We selected a non-statistical, judgmental sample of seven SSP payments totaling $48.2 million, representing a portion of the $55.6 million in total payments made in FYs 2023 and 2024, as of September 30, 2024. We reviewed supporting documentation uploaded to FEMA GO to determine whether the expenses claimed were reasonable in nature and amount, allocable to the FEMA award, included in the approved budget, and adequately documented. We evaluated the actions taken by FEMA and the National Board to implement recommendation 2 from our 2023 report, which aimed to improve oversight of EFSP-H 23spending by reducing risk, increasing transparency, and allowing for sample reviews of ongoing expenditures. To assess whether implementation efforts achieved the desired results, we interviewed program officials and requested copies of the Board's quarterly spending reports, which were expected to include a breakdown of the obligations, expenditures, and remaining balances by service category for each EFSP-H subaward. However, because FEMA did not ensure the Board established and implemented a system to collect the quarterly reports, we did not conduct further testing in this area. FEMA Should Increase Oversight to Prevent Misuse of Humanitarian Relief Funds , OIG-23-20, March 28, 2023. 23 12 OIG-26-04

We assessed the reliability of computer-processed data obtained from FEMA GO, FEMA's Integrated Financial Management Information System, as well as separate spreadsheets manually created by FEMA and National Board officials to track allocations, award obligations, and expenditures related to humanitarian funding provided to aliens through EFSP-H and SSP grants in FYs 2023 and 2024. To test data reliability, we traced and compared reported amounts to source documentation, including grant files, financial system reports, and other corroborating evidence. We determined the data was sufficiently reliable for the purposes of our audit. We assessed internal controls related to FEMA's oversight of humanitarian funding for aliens and identified internal control components and underlying internal control principles that were significant to the audit objective. Specifically, we identified weaknesses for the control environment, risk assessment, control activities, information and communication, and monitoring control components. These internal control weaknesses are discussed in the body of this report. However, because we limited our assessment to the audit objective, the report may not have disclosed all internal control deficiencies that may have existed at the time of our audit. Inspector We conducted this audit from June 2024 through September 2025 pursuant to the General Act of 1978, 5 U.S.C. §§ 401-424, and according to generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

DHS OIG's Access to DHS Information

FEMA denied DHS OIG direct, read-only access to the FEMA GO back-end database because it was not possible to partition the data access to only those records FEMA deemed relevant to the audit. In lieu of direct system access, after multiple delays, FEMA provided us with full copies of the raw data tables for all FY 2023 and 2024 SSP grants. The delays caused by the denial of direct FEMA GO access and subsequently obtaining extracts negatively impacted our timeliness in performing this audit. Subsequently, we obtained direct, read-only access to SSP award records for FYs 2023 and 2024 through the FEMA GO front-end interface.

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Appendix B: FEMA Comments on the Draft Report

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Appendix C: Potential Monetary Benefits

Source: DHS OIG analysis of FEMA records

20 OIG-26-04 Category of Unsupported Funds to Be Total Ineligible Humanitarian Questioned Put to Costs Costs Totals $441.5 M $441.5 M N/A $0 $0 EFSP-H SSP $16.5 M $16.5 M $425 M $425 M $0 $0 $0 $0 Funding Questioned Questioned Better Use Rec No. Costs

Appendix D: Report Distribution

Department of Homeland Security

Secretary Deputy Secretary Chief of Staff Deputy Chiefs of Staff General Counsel Executive Secretary Director, GAO/OIG Liaison Office Under Secretary, Office of Strategy, Policy, and Plans Under Secretary for Management Assistant Secretary for Office of Public Affairs Assistant Secretary for Office of Legislative Affairs Administrator, Federal Emergency Management Agency Associate Administrator, FEMA Office of Resilience Associate Administrator, FEMA Office of Response and Recovery Assistant Administrator, FEMA Grant Programs Directorate Assistant Administrator, FEMA Recovery Directorate Director, FEMA Individual Assistance Division Commissioner, U.S. Customs and Border Protection FEMA Audit Liaison Office CBP Audit Liaison Office

Office of Management and Budget

Chief, Homeland Security Branch DHS OIG Budget Examiner

Congress

Congressional Oversight and Appropriations Committees

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Additional Information

To view this and any other DHS OIG reports, Please visit our website: www.oig.dhs.gov For further information or questions, please contact the DHS OIG Office of Public Affairs via email: DHS-OIG.OfficePublicAffairs@oig.dhs.gov

DHS OIG Hotline

To report fraud, waste, abuse, or criminal misconduct involving U.S. Department of Homeland Security programs, personnel, and funds, please visit: www.oig.dhs.gov/hotline If you cannot access our website, please contact the hotline by phone or mail: Call: 1-800-323-8603 U.S. Mail: Department of Homeland Security Office of Inspector General, Mail Stop 0305 Attention: Hotline 245 Murray Drive SW Washington, DC 20528-0305