Audit: FEMA Misspent Nearly $27M in COVID Funeral Funds

Federal Emergency Management Agency (FEMA) officials approved enormous amounts of unallowed COVID-19 funeral expenses, according to a newly released internal audit.

FEMA money was spent on such things as “boat purchases” for families to spread the ashes of loved ones at sea, and funeral jewelry for survivors, the Department of Homeland Security’s Office of the Inspector General (IG) said.

Auditors overall are questioning $26.9 million in FEMA funeral payments, the IG said in an Aug. 22 report.

“FEMA’s funeral assistance program greatly expanded the universe of reimbursable expenses for deaths related to COVID-19, even beyond those specifically identified as ineligible under established FEMA policy, without establishing guardrails to ensure relief was limited to necessary expenses and serious needs as required by statute,” the report said.

“Instead, the operating procedures allowed, with few exceptions, reimbursement for all expenses listed on funeral home receipts, invoices, and contracts.”

In March 2021, FEMA implemented a publicly available COVID-19–specific policy to streamline delivery of funeral assistance granted in connection with the pandemic.

This policy establishes a maximum award amount of $9,000 for each COVID-19–related funeral for which an applicant is responsible.

Although statute limits items for reimbursement to “necessary expenses and serious needs,” FEMA supplemented its COVID-19-specific policy with internal disaster-specific operating procedures, which, unlike its “Individual Assistance Program and Policy Guide” and COVID-19–specific policy, are not available to the public.

These operating procedures allowed all expenses, with few exceptions, listed on a funeral home receipt, invoice, or signed contract to be eligible for reimbursement.

Expenses reimbursed included “gratuities; portraits; funeral jewelry for survivors; memory T-shirts/blankets; travel or boat purchases intended to scatter ashes outside of a memorial service; perpetual care of burial grounds; and items purchased for individuals attending the funeral or service, such as travel costs, clothing, and hotel costs,” the IG report said.

“[From April 12, 2021, through Sept. 21, 2021,] FEMA issued $1.3 million in assistance payments to multiple parties applying for the same decedents and paid applicants more than the allowable maximum award, resulting in overpayments of $759,026.”

The IG report added that “FEMA also issued a questionable award amount of $591,805 for unallowable costs on 93 of 389 applications we reviewed.”

In its audit, the IG said that FEMA’s COVID funeral program spent more than $2.5 billion on 389,000 COVID-related funeral applications compared to an earlier high of “$2.6 million on 976 funeral assistance applications to pay for funeral costs of victims of Hurricanes Irma, Harvey, and Maria in 2017.”