Pryor announces settlement on FEMA funds dispute | Arkansas Blog

Pryor announces settlement on FEMA funds dispute

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U.S. Sen. Mark Pryor says a Mountain View family has settled a dispute with FEMA over $27,000 erroneously paid in flood repair assistance. The family had followed FEMA instructions, but the agency later found they weren't entitled to the money and sought repayment plus $10,000 in penalties, fees and interest.

Pryor wouldn't reveal terms of the settlement, but said the family was pleased with it.

Pryor had put a hold on Treasury Department nominations because of the dispute. He said he'd push ahead with legislation to allow the government to waive repayment in cases of error. No doubt penalties and interest aren't in order on payments made and spent on legitimate repairs under government assurances that the payments were legal. But recipients of erroneous payments get to keep those payments when it's the government making the error rather than, say, a bank that credited an account with too much money?

NEWS RELEASE

WASHINGTON D.C. — U.S. Senator Mark Pryor today said he was pleased an agreement has been reached between the Department of the Treasury and an Arkansas couple who erroneously received disaster assistance from FEMA three years ago. The details of the settlement are private, but satisfactory to the family. In response to the Treasury’s action, Pryor has lifted his holds on Treasury Department nominees allowing them to advance through the Senate confirmation process.

“The Guglielmana family has dealt with a lot of unnecessary bureaucracy and frustration over the past year. I’m pleased we were able to bring this case to a favorable resolution.” Pryor said. “This family showed tremendous courage and I hope their actions will help scores of other flood victims who may be tangled in the same web. I also want to recognize the hard work and professionalism of the Treasury Department, especially the career public servants at the Financial Management Service for helping the Guglielmanas.”

Following major flooding in 2008, the Guglielmana family of Mountain View, Arkansas completed an extensive application process and home inspection by FEMA. The agency approved $27,000 in disaster assistance for their home repairs. In March 2011, FEMA informed them that they were never eligible for assistance because they live in a county that does not participate in the National Flood Insurance Program. In a Notice of Debt letter, FEMA said that they must repay the funds within 30 days or face high interest charges or other collection actions. After failing to pay, FEMA sent the debt to the Department of the Treasury for collections in September 2011. An additional $10,000 was added for penalties, fees and interest.

*Please respect the Guglielmana family’s privacy. They do not wish to take calls from reporters.

Pryor said he will continue to advance his legislation to help individuals who are facing similar situations. His measure would enable FEMA to waive debt owed to the U.S. in which funds were distributed in FEMA error in situations where recoupment would be against “equity and good conscience.” The provision is part of the Senate’s Fiscal Year 2012 Homeland Security Appropriations Act. Separate legislation, the Disaster Assistance Recoupment Fairness Act, passed favorably out of the Homeland Security and Governmental Affairs Committee earlier this year.

FEMA has been sending out Notice of Debt letters to 160,000 individuals who received federal disaster assistance improperly in the aftermath of the 2005 hurricane season. Improper payments are identified as those resulting from human error, such as numerous members of one household applying for identical benefits, accounting problems or inadequate internal controls.

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