Unfair Gaps🇺🇸 United States

Public Safety Business Guide

33Documented Cases
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All 33 Documented Cases

Systemic Fraud and Abuse in Federal Disaster Relief Disbursements

$3–$10+ billion per year in improper and likely unrecoverable payments across major federal disaster relief programs (varies by disaster year)

Large federal disaster programs repeatedly disburse funds to ineligible or fraudulent recipients, leading to billions in improper payments that must later be written off or only partially recovered. These abuses span multiple disasters and programs (e.g., FEMA Individual Assistance, Public Assistance, SBA disaster loans, and COVID-related relief) and recur after nearly every major event.

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FEMA Public Assistance Deobligations and Clawbacks from Noncompliant Disbursement

$10–$100+ million per year across states in deobligated FEMA Public Assistance funds and disallowed costs, depending on disaster volume

Public safety and local government entities frequently lose obligated FEMA Public Assistance funds years after the disaster when audits find procurement, documentation, or eligibility violations, forcing deobligation and local payback. These are not isolated incidents but systemic findings across multiple disasters, jurisdictions, and years.

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Disaster Response Cost Overruns from Poorly Controlled Overtime and Contracts

$100,000–$10+ million per major disaster per jurisdiction in unreimbursed overtime and contract overruns across police, fire, EMS, and emergency management agencies

Public safety agencies often experience large and recurring cost overruns during disasters due to uncontrolled overtime, emergency no-bid contracts, and inefficient resource deployment, many of which are later ruled partially ineligible for reimbursement. These overruns strain local budgets and reduce net federal relief benefits.

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Slow Reimbursement and Loan Disbursement Causing Cash-Flow Strain

$10,000–$1+ million per incident per applicant in interest, temporary financing costs, and deferred projects due to delayed cash, plus systemic liquidity risk at the jurisdiction level

Disaster relief for public safety and communities is predominantly reimbursable, so local entities must front costs and then wait weeks to years for cash, creating significant working capital strain. SBA disaster loans and FEMA reimbursements have documented multi-week to multi-year lags between application, approval, and full disbursement.

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