Federal Emergency Management Agency - Public Assistance - Validate as You Go

Home > Agencies & Programs > Federal Emergency Management Agency - Public Assistance - Validate as You Go

Program level Payment Integrity results

Sponsoring agency: Department of Homeland Security

The Federal Emergency Management Agency (FEMA) Public Assistance program provides supplemental grants to state, local, tribal, and territorial (SLTT) governments, and certain types of private non-profits for emergency response and long-term disaster recovery efforts. Due to the nature of the Public Assistance program, FEMA is reliant on additional parties, such as states, territories, etc., to oversee and execute payments on behalf of the program. The barrier related to the expansive COVID disaster size and the level of burden to collect the necessary supporting documentation serves as a limitation to FEMA in improving the prevention of improper payments due to the inability to readily match information related to financial eligibility.

View on Federal Program Inventory

PROGRAM METRICS

$3,935 M

in FY 2021 outlays, with a

93.0%

payment accuracy rate

PROGRAM METRICS

$4,768 M

in FY 2022 outlays, with a

94.9%

payment accuracy rate

PROGRAM METRICS

$39,724 M

in FY 2024 outlays, with a

96.1%

payment accuracy rate

PROGRAM METRICS

$21,313 M

in FY 2025 outlays, with a

98.8%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2018 - 09/2019


    Confidence interval:

    >90%


    Margin of error:

    +/-11.99027

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $60.09 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $60.09 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0.0 M

Unknown Payment Details

Insufficient or lack of documentation from the States and/or regions to perform sufficient testing to determine the appropriateness and accuracy of the payment.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $214.49 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

FEMA Leadership prioritizes the annual PIIA assessments and has high expectations of reducing IPs and UPs. FEMA Leadership stresses the importance of being a good steward of taxpayer dollars which is trickled down the FEMA levels of hierarchy. Root cause analyses are performed at the completion of PIIA testing for each program which are used a basis for creating the respective MAPs as well as improving the respective internal control environments. Overall, the IPs and UPs are decreasing. Additionally, FEMA will be conducting training and require routine meetings with stakeholders as needed.

Future payment integrity outlook

Federal Emergency Management Agency - Public Assistance - Validate as You Go has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $2,062.64 M
Current year +1 estimated future improper payments $29.34 M
Current year +1 estimated future unknown payments $104.73 M
Current year +1 estimated future improper payment and unknown payment rate 6.5 %

The program's current year improper payment and unknown payment rate of 6.98 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

Program is reflective of disaster supplemental funding that was received by DHS to respond to the Hurricane Harvey, Irma, and Maria disasters that occurred in the 2017 / 2018 timeframe. Due to the burden of testing and reporting, Disaster Supplemental Funding programs are tested and reported two years in arrears. As such, by the time that remedial action is taken and/or is realized in the PIIA testing results, the total value of annual disbursements is expected to be below the threshold for PIIA action. DHS will continue to make process and internal control improvements to improve the payment management processes as it relates to supplemental funding but feels that internal control, human capital, information system, and infrastructure needs have been met.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2019 - 09/2020


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.19

Overpayments

Due to the nature of the Public Assistance program, FEMA is reliant on additional parties to oversee and execute payments on behalf of the program. However, FEMA has direct oversight over drawdown activity for the program in order to support the payment or reimbursement to the state and local entities. As such, DHS believes that all payments disbursed, as reviewed through the drawdown activity reviewed under PIIA, are within the agency's control. Therefore, all resulting improper payments, to include overpayments, have also been determined to be within the control of the agency.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $52.19 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $52.19 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0 M

Unknown Payment Details

For the timeframe of the testing being conducted, FEMA was unable to obtain sufficient documentation to fully ascertain whether the payment was proper or improper.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $190.7 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

The root causes of the IPs and UPs have consistently remained the same with UPs accounting for 80% to 90% of the overall reported questioned costs. FEMA continues to work with Recipients on obtaining additional information and missing documentation for the UPs. These efforts and the collaboration to strengthen internal controls with internal and external VAYGo stakeholders have led to continuous decrease of IPs and UPs. The IPs have improved by approximately 40% and the UPs have improved by approximately 80% over the last three VAYGo testing cycles. FEMA is confident the IPs and UPs error rates will continue to improve as the VAYGo program continues to mature, ongoing collaboration continues, and continuous training of internal and external VAYGo stakeholders is held.

Future payment integrity outlook

Federal Emergency Management Agency - Public Assistance - Validate as You Go has NOT established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $20,598.36 M
Current year +1 estimated future improper payments $224.52 M
Current year +1 estimated future unknown payments $823.94 M
Current year +1 estimated future improper payment and unknown payment rate 5.09 %

The program's current year improper payment and unknown payment rate of 5.09 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

DHS has what is needed with respect to internal controls, human capital and information system and other infrastructure to reduce improper payments and unknown payments to the tolerable rate for the Federal Emergency Management Agency (FEMA) - Public Assistance - VAYGo program.

N/A - DHS did not request additional resources in the most recent budget submission of the agency.

Additional programmatic information

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, as Amended (Stafford Act), Title 42 of the United States Code (U.S.C.) § 5121 et seq., authorizes the President to provide federal assistance when the magnitude of an incident or threatened incident exceeds the affected State, Territorial, Indian Tribal, and local government capabilities to respond or recover.

The purpose of the PA Grant Program is to support communities’ recovery from major disasters by providing them with grant assistance for debris removal, life-saving emergency protective measures, and restoring public infrastructure. Local governments, states, tribes, territories and certain private nonprofit organizations are eligible to apply. Public Assistance is FEMA's largest grant program and provides emergency assistance to save lives and protect property and assists communities with repairing public infrastructure affected by federally declared incidents.

FEMA implemented the VAYGo pilot program to test PA and certain other disaster grant expenditure, originally scoped to Hurricanes Harvey, Irma, and Maria. Since these disasters, the VAYGo program has expanded to include coverage over additional disaster declarations, such as COVID response. As part of VAYGo, FEMA reviews project documentation for a sample of funds as they are drawn down by recipients and conducts testing to verify whether the project funding was appropriately expended by the subrecipient. One goal of VAYGo is to identify potential problems earlier, allowing FEMA and recipients—including PA recipients—to correct or mitigate issues earlier in the process instead of waiting until grant closeout. According to FEMA officials that conduct the testing, the primary goal of VAYGo is to test for ineligible costs, which can serve as a gateway for the agency to be on notice of issues of fraud, waste, or abuse in the PA program.

While error rates remain above the OMB thresholds to be considered susceptible to significant improper payments, the associated Public Assistance payments as monitored by VAYGo have seen substantial improvements. FEMA is confident the IPs and UPs error rates will continue to improve, as the VAYGo program continues to mature and the ongoing collaboration and training of internal and external VAYGo stakeholders continues.

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2020 - 09/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.61

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    Readily available on the FEMA.gov website, the Federal Emergency Management Agency (FEMA) supplies training guides related to the Public Assistance program. In addition, the website also includes video tutorials. Many of these videos and tutorials are also published on the FEMA Public Assistance Grants Portal YouTube channel to ensure a broad audience reach. Validate as You Go (VAYGo) HQ conducts training courses via VAYGo University (VU) to support Regional and Recipient VAYGo stakeholders. In addition, VAYGo HQ has conducted VAYGo roadshows as requested from FEMA Regions. In fiscal year (FY) 2023, VAYGo HQ visited Region IX (FEMA Region IX supports Arizona, California, Hawaii, Nevada, the Territory of Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa) and Region X (FEMA Region X supports Alaska, Idaho, Oregon, and Washington). In FY 2024, VAYGo roadshows were requested from FEMA Regions and FEMA scheduled to visit Region VIII (FEMA Region VIII supports Colorado, Utah, Wyoming, Montana, South Dakota, and North Dakota) in FY 2024. VAYGo HQ also supported the Public Assistance Working Session (PAWS) in May 2023 and provided VAYGo training to roughly 100 Regional and Recipient Public Assistance stakeholders. Public Assistance - VAYGo hosted periodic meetings with recipients as part of the VAYGo remediation efforts for outstanding Improper Payments (IPs) and Unknown Payments (UPs). Through these ongoing meetings and the collection of information and documentation, VAYGo has continued to remediate previously identified and known issues. FEMA continues to work with recipients on obtaining additional information and missing documentation for the UPs. These efforts and the collaboration to strengthen internal controls with internal and external VAYGo stakeholders have led to a continuous decrease of improper payments. For FY 2020 disbursement activity (reported in 2022) FEMA reported an overpayment error rate of 1.09 percent. Based on the FY 2021 and FY 2022 disbursement activity (consolidated for reporting in 2024), the overpayment error rate has been improved to 0.34 percent. Training efforts will continue to heavily focus on obtaining sufficient supporting documentation in order to see future improvements on the UP error rate.
    FY2024 Q1
    Completed
    Change Process
    To help meet the goals of the 2022-2026 Strategic Plan, the Federal Emergency Management Agency (FEMA) reestablished the Public Assistance Steering Committee (PASC). The committee is an advisory group of state, territorial, tribal and local (STTL) government representatives and FEMA region representatives designed to help improve the Public Assistance program processes for customers–recipients and applicants. The committee first convened in 2017 to provide real-world partner perspectives, inform strategic program changes and discuss overall program improvements. The re-established committee convened in 2022–post COVID-19. With the re-establishment of the PASC in 2022, FEMA formally set the membership to be comprised of a SLTT representative from each region and increased engagement with the annual Public Assistance Working Session (PAWS). FEMA continues to work with the PASC and has leveraged the committee to complete the following: • In March 2022, FEMA made the first changes based on recommendations to help speed recovery efforts and reduce applicant burdens. • In September 2022, FEMA took these additional steps to streamline Public Assistance. • In March 2023, FEMA released a Memo, “Simplifying the Public Assistance Program – Management Costs”, to further streamline Public Assistance as it relates to Management Costs documentation for force account labor. The national emergency declaration related to the COVID-19 disaster activated FEMA’s Public Assistance program and created opportunities for collaboration and funding at all levels of government, ensuring that these resources reached individuals with the greatest needs requires concerted effort and advocacy at the local, state, and national levels. FEMA created a streamlined Public Assistance Direct Application process to address the COVID-19 pandemic and scale the Public Assistance Program to ensure eligible applicants receive funding quickly. The Direct Application process allowed applicants to submit a COVID-19 Streamlined Project Application directly through Grants Portal without a Program Delivery Manager (PDMG) assigned. Through the Direct Application process, applicants can claim costs for Debris Removal (Category A), Emergency Protective Measures (Category B), and Management Costs (Category Z) using a Streamlined Project Application (SPA). Stakeholder feedback reported that this streamlined process was effective because FEMA was able to scale and respond to the national emergency. Validate as You Go (VAYGo) was placed on a strategic pause beginning in April 2022 to conduct listening sessions and identify ways to improve the VAYGo testing process. FEMA's Office of the Chief Financial Officer conducted thirteen listening sessions early in fiscal year (FY) 2023 with FEMA Regions and Recipients to better understand the Public Assistance program and to identify common VAYGo issues and recommendations for improvements in the VAYGo program. The outcomes from the listening sessions lead to the development of the VAYGo Guide outlined below. The VAYGo Guide was developed in partnership with FEMA HQ Public Assistance, FEMA Grants Program Directorate, Regions, and Recipients. The Guide encompasses improvements and standardization to VAYGo testing, identifies roles/responsibilities, documentation requirements, and enhances communication with Regions and Recipients. As a result of those listening sessions, FEMA published the VAYGo Guide and distributed to Regions and Recipients. This guide provides implementation and delivery guidance for the FEMA VAYGo grant payment review process and includes details on documentation requirements to support recipient drawdowns and financial disbursements. The guidance is designed to enhance the customer experience for all stakeholders involved in VAYGo processes while also establishing a framework for implementing measures to reduce the administrative burden of grants management when improper payment rates meet or fall below the minimum threshold established by the Office of Management and Budget (OMB). On August 9, 2023, FEMA reinstated VAYGo, which now includes the new implementation guide and a new closeout benefit for qualifying recipients.
    FY2024 Q1
    Completed
    Audit
    In 2022, the Federal Emergency Management Agency (FEMA) Public Assistance Task Force (PATF) engaged an independent review to objectively assess the Public Assistance National Delivery Model. The review focused on the implementation and subsequent performance of the National Delivery Model process using program data from 2018 through July 2022 and stakeholder feedback from April 2022 through July 2022. Once recommendations were developed based on the gap analysis findings, the Assessment Team socialized the recommendations with relevant offices and FEMA leadership in July 2022 with a final report being issued in January 2023. The Payment Integrity Information Act of 2019 (PIIA) requires agencies to review and assess all programs and activities they administer and identify those determined to be susceptible to significant improper payments, estimate the annual amount of improper payments, and submit those estimates to Congress. In accordance with the Office of Management and Budget (OMB) Circular No. A-123, Appendix C, "Requirements for Payment Integrity Improvement", federal agencies are required to assess improper payments and report annually on their efforts. In compliance with these requirements, the FEMA Public Assistance - Validate as You Go (VAYGo) program has conducted reviews and published results in 2022 (over FY 2020 disbursement activity) and in 2024 (over FY 2021 and FY 2022 disbursement activity consolidated). In addition, FEMA performed an assessment of internal control over financial reporting including performing tests of operating effectiveness, for the FY 2023 performance period. These internal control assessments included a review over Grants Management with no material internal control issues noted. Finally, the FEMA Public Assistance program regularly is subject to external and/or independent audit reviews to include those conducted by the DHS Office of the Inspector General (OIG) and the Government Accountability Office (GAO). Two recent reviews by these entities include a 2024 review conducted by the GAO, GAO-24-106676: “Disaster Relief Fund: Lessons Learned from COVID-19 Could Improve FEMA’s Estimates”, and a 2022 review conducted by the OIG, OIG-22-51: “Assessment of FEMA’s Public Assistance Alternative Procedures Program”.
    FY2024 Q4
    Completed
    Automation
    The National Delivery Model has increased simplicity with the improved transparency provided by the cloud-based Grants Manager / Grants Portal user interfaces. The Grants Manager and Grants Portal tool is a two-part, online platform that is used to formulate and track award packages. Grants Manager is the internal platform used by the Federal Emergency Management Agency (FEMA) specialists, while the Grants Portal is the external platform used by applicants, recipients, and subrecipients to manage their projects. Feedback received from one applicant stated, “I like the new format. Online is a lot easier with the portal. For example, especially for debris removal, we have 100 pictures to download. We can do that in minutes now as opposed to a few days before. The portal is definitely streamlining things.” Feedback also indicates that respondents appreciated Grants Manager’s technology and user- friendliness and how it was simplified and a vast improvement over the old delivery model. With the enhanced automation to allow for documentation submission, FEMA is able to obtain documentation required for various points of the grants process: • Obligation – FEMA collects and reviews documentation from applicants to determine work and cost eligibility. Information may be based on estimates for work to be completed. • Disbursement – Recipient collects, reviews, and maintains documentation from the subrecipient. • Validate as You Go (VAYGo) – FEMA collects and reviews documentation from applicants to determine work and cost eligibility. Information may be based on estimates for work to be completed. • Closeout – Recipient submits to FEMA information that certifies a project is complete, all terms and conditions have been met, and final costs are reconciled based on actual costs. FEMA developed a VAYGo Module within the FEMA Grants Manager / Grants Portal platform. The module has workflows to support VAYGo testing, process requests for information, and enable FEMA Recipients to upload documentation for their respective VAYGo tested samples. FEMA continues to collaborate with Public Assistance Business Architecture to enhance the VAYGo Module with the goal of improving the VAYGo customer service experience for internal and external VAYGo stakeholders. This is an ongoing effort.
    The corrective action was not fully completed this reporting period
    Not Completed
    Automation
    The Federal Emergency Management Agency (FEMA) developed a Validate as You Go (VAYGo) Module within the FEMA Grants Manager / Grants Portal platform. The module has workflows to support VAYGo testing, process requests for information, and enable FEMA Recipients to upload documentation for their respective VAYGo tested samples. FEMA continues to collaborate with Public Assistance Business Architecture to enhance the VAYGo Module with the goal of improving the VAYGo customer service experience for internal and external VAYGo stakeholders. This is an ongoing effort.
    FY2025
    Planned
    Training
    The Federal Emergency Management Agency (FEMA) will continue to train staff on proper procedures for reviewing submitted package documentation and making Public Assistance – Validate as You Go (VAYGo) scoped payments. VAYGo HQ conducts training courses via VAYGo University (VU) to support Regional and Recipient VAYGo stakeholders. VAYGo HQ is planning to host a workshop in early fiscal year (FY) 2025 with FEMA Regional VAYGo Points of Contact. This workshop will provide strategic and tactical strategies to support FY 2024 testing efforts. In addition, VAYGo HQ will continue to conduct VAYGo roadshows as requested from FEMA Regions. VAYGo HQ will continue to be part of the April 2025 Public Assistance Working Session (PAWS). FEMA will continue publication of helpful tools resources to guide the Public Assistance funding application process on the FEMA website. Over 20 courses will also remain readily available through the FEMA Emergency Management Institute (EMI) that can be accessed at any time and completed via self-pace. This level of engagement across multiple VAYGo spectrums will continue to enhance the level of knowledge required to strengthen the Public Assistance program leading to successful VAYGo results.
    FY2025
    Planned
    Change Process
    The Federal Emergency Management Agency (FEMA) will continue to train staff on proper procedures for reviewing submitted package documentation and making Public Assistance – Validate as You Go (VAYGo) scoped payments. Areas for potential improvement and enhancement often come from FEMA partners. FEMA partners may submit issues, opportunities, and feedback related to Public Assistance as a part of continuous improvement efforts via the “Feedback” feature in the Public Assistance Grants Portal or by working with their FEMA Regional Public Assistance officer. FEMA staff may also submit issues, opportunities, and feedback via the Change Control Tool on FEMA’s intranet site. FEMA’s Change Control Unit reviews and responds to requests through the Change Control Tool. The FEMA Office of the Chief Financial Officer (OCFO) is planning to issue an updated VAYGo Guide late 2024 based on feedback captured from regions and recipients through the various training channels outlined in the narrative Training section. It is through the continuous and ongoing VAYGo communication and training channels that fosters a positive and successful VAYGo testing environment for all VAYGo stakeholders.
    FY2025
    Planned
    Audit
    The Payment Integrity Information Act of 2019 (PIIA) requires agencies to review and assess all programs and activities they administer and identify those determined to be susceptible to significant improper payments, estimate the annual amount of improper payments, and submit those estimates to Congress. In accordance with the Office of Management and Budget (OMB) Circular No. A-123, Appendix C, "Requirements for Payment Integrity Improvement", federal agencies are required to assess improper payments and report annually on their efforts. In compliance with these requirements, the Federal Emergency Management Agency (FEMA) Public Assistance - Validate as You Go (VAYGo) program will continue to conduct a review and publish results in 2025. In addition, FEMA will perform an assessment of internal control over financial reporting including performing tests of operating effectiveness, for the FY 2025 performance period. These internal control assessments include a review over Grants Management. Finally, the FEMA Public Assistance program regularly is subject to external and/or independent audit reviews to include those conducted by the DHS Office of the Inspector General (OIG) and the Government Accountability Office (GAO).
    FY2025
    Planned

Overpayments

Due to the nature of the Public Assistance program, the Federal Emergency Management Agency (FEMA) is reliant on additional parties, such as states, territories, etc., to oversee and execute payments on behalf of the program. However, FEMA has direct oversight over drawdown activity for the program in order to support the payment or reimbursement to the state and local entities. As such, DHS believes that all payments disbursed, as reviewed through the drawdown activity reviewed under the Payment Integrity Information Act of 2019 (PIIA), are within the agency's control. Therefore, all resulting improper payments, to include overpayments, have also been determined to be within the control of the agency.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $136.35 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $136.35 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Financial $136.35 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Audit, Automation, Change Process, Training Audit, Automation, Change Process, Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0 M

Unknown Payment Details

Payments are considered Unknown Payments (UPs) when the associated recipient and subrecipient(s), if applicable, fail to provide adequate supporting documentation in accordance with the grant agreement, such as amendments or price tables, or to support the disbursement drawdown amount. Without adequate supporting documentation, the Federal Emergency Management Agency (FEMA) is unable to discern whether the payments were proper or improper as the disbursement could not be reconciled to the terms and conditions of the agreement. In order to assert to the appropriateness of the payment, FEMA generally requests the following information from the recipients:
• Proof of payment documenting drawdown paid to correct subgrantee / disaster
• Private nonprofit support to include Facility Questionnaire, Internal Review Service (IRS) Letter confirming status, etc.
• Support for Private Property Debris Removal
• Documentation to substantiate the work as eligible and the cost estimate as reasonable
• Force account labor and equipment supporting documentation
• Material supporting documentation
• Rented equipment supporting documentation
• Photographs (Sites, Demonstrating Threat, Hazardous Materials)
• Insurance Coverage (Policies, Statement of Losses, Reimbursements, Other)

FEMA conducted testing over the fiscal year (FY) 2021 disbursements covered by the Public Assistance – Validate as You Go (VAYGo) program between October 2022 and September 2024. During that review period, FEMA was unable to obtain sufficient documentation across a total of 15 states and territories with largest contributors for the lack of supporting documentation provided tied to Texas (Region VI), Massachusetts (Region I), California (Region IX), Florida (Region IV), New Jersey (Region II), Louisiana (Region VI), Minnesota (Region V), etc. FEMA also conducted testing over the FY 2022 disbursements covered by the Public Assistance – VAYGo program between October 2023 and September 2024. During that review period, FEMA was unable to obtain sufficient documentation across a total of 19 states and territories with largest contributors for the lack of supporting documentation provided tied to New Jersey (Region II), Texas (Region VI), Florida (Region IV), California (Region IX), Massachusetts (Region I), Rhode Island (Region I), Maryland (Region III), etc. For both disbursement periods, FY 2021 and FY 2022, the COVID-19 pandemic response was the main contributing disaster response related to the lack of sufficient documentation and thus the resulting UPs extrapolated error amount.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $1,396.14 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
States $1,396.14 M The Federal Emergency Management Agency (FEMA) Public Assistance - Validate as You Go (VAYGo) program and process focuses on ensuring grantee drawdowns and disbursements to sub-grantees are compliant with all applicable Federal laws, regulations, and policies. As part of this incremental oversight review, financial documentation is to be reviewed throughout the lifecycle of the grant in order to support the grantee drawdowns. Based on testing results, necessary documentation is not always made readily available by the regional, state, and local entities to fully support the drawdown activity. Unknown Payments (UPs) have been attributable to: • Missing proof of payment to subrecipient vendors for supplies and equipment • Labor timesheets and documentation of recipient salary / payroll detail • Etc.

Mitigation strategies taken Mitigation strategies planned
Audit,Automation,Change Process,Training Audit,Automation,Change Process,Training

Evaluation of corrective actions

Public Assistance is designed to reimburse everything from an hour of overtime to the replacement of an entire wastewater treatment facility. It is designed to be flexible and support the range of recovery needs. The program delivery model, built on standard roles and processes, enables the Federal Emergency Management Agency (FEMA) to employ a risk-based approach that recognizes that not all Applicants or projects require the same level of resources, documentation, or oversight. FEMA adjusts its approach based on risks. The risk-based approach balances developing policy, delivering the program, and prioritizing resources to maintain an efficient use of resources. FEMA prioritizes resources and effort where risk and complexity are high. That means ensuring personnel and technical resources are made available, and administrative oversight is more in-depth, where a disaster, Applicant, or project represents a higher risk in one or more of the four risk areas–Mission, Finances, Program, and Reputation. By contrast, FEMA limits level of effort, resources, and administrative oversight where risk is low. That means assigning fewer personnel or technical resources and decreasing requirements and level of review where an applicant or project does not pose a significant risk in one or more of the four risk areas.

The root causes of the Improper Payments (IPs) and Unknown Payments (UPs) have remained consistent over the last 24-months of consecutive testing, covering fiscal year (FY) 2021 and FY 2022 disbursement activity. Generally, UPs steadily account for approximately 90 percent of the overall reported error rate and valuation. FEMA continues to work with recipients on obtaining additional information and missing documentation for the UPs. To assist in obtaining sufficient supporting documentation in a timely manner, FEMA remains committed to streamlining and automating the Public Assistance process, training relevant parties and stakeholders, ensuring that policy and process documentation is current and available, and maintaining consistent and regular oversight through internal reviews and audit activity while not overburdening grant recipients.

The Federal Emergency Management Agency (FEMA) Public Assistance payment appropriateness is heavily reliant on state and local entities and the relationship that they have with vendors. As noted previously, the main focus will be on sustaining educational efforts and sharing interim directives and reimbursement package requirements with Regional, state, and local partners. FEMA will continue to work with Recipients on obtaining additional information and missing documentation for the Unknown Payments (UPs). These efforts and the collaboration to strengthen internal controls with internal and external Validate as You Go (VAYGo) stakeholders have been successful in the past and have led to continuous decrease of overpayments. FEMA is confident that the continuation of these efforts will have a positive impact on the reduction of UPs going forward as well.

The Federal Emergency Management Agency (FEMA) will continue to train staff on proper procedures for making Public Assistance payments that would fall under the scope of the Validate as You Go (VAYGo) oversight. Planned corrective actions in fiscal year (FY) 2025 will continue to focus on automation of manual processes, training staff and state/local personnel, and conducting regular testing to ensure documentation completeness, accuracy, and validity. In FY 2025, the main focus will be on sustaining educational efforts and sharing interim directives and reimbursement package requirements with Regional, state, and local partners. FEMA is confident that the Improper Payment (IP) and Unknown Payment (UP) error rates will improve as the VAYGo program continues to mature and ongoing collaboration and continuous training of internal and external VAYGo stakeholders is sustained.

Public Assistance events that are determined to be of higher risk are scoped in for Validate as You Go (VAYGo) oversight and monitoring. As this continues to gain scope and mature to a more sustained timeframe for review, Improper Payments (IPs) should be prevented and/or detected in a timelier manner for resolution by the Federal Emergency Management Agency (FEMA). FEMA is confident the IP and Unknown Payment (UP) error rates will improve as the VAYGo program continues to mature and returns to a more 'real-time' execution approach. This will continue to entail FEMA's commitment to ongoing collaboration and continuous training of internal and external VAYGo stakeholders.

For fiscal year (FY) 2020 disbursement activity (reported in 2022) FEMA reported an overpayment error rate of 1.09 percent. Based on the FY 2021 and FY 2022 disbursement activity (consolidated for reporting in 2024), the overpayment error rate has been improved to 0.34 percent. Ongoing corrective action efforts will continue to heavily focus on obtaining sufficient supporting documentation in order to see future improvements on the UP error rate.

Future payment integrity outlook

Federal Emergency Management Agency - Public Assistance - Validate as You Go has NOT established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $21,019.59 M
Current year +1 estimated future improper payments $71 M
Current year +1 estimated future unknown payments $730 M
Current year +1 estimated future improper payment and unknown payment rate 3.81 %

The program's current year improper payment and unknown payment rate of 3.86 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

As heavy program fluctuations continued to be seen in the 2024 assessment review, covering the fiscal year (FY) 2021 and FY 2022 disbursement activity, the Federal Emergency Management Agency (FEMA) Public Assistance - Validate as You Go (VAYGo) program will review the 2025 conducted assessment results to better determine if the program has stabilized. Per Office of Management and Budget (OMB) Circular No. A-123, Appendix C guidance, based on at least a 24-month reporting period, a baseline will be established at that time if no significant changes are noted. From the established baseline, the agency will have a more accurate basis to establish a tolerable rate. However, based on the intent of the program and the program's current relation to a nationwide emergency disaster as well as other high- risk disaster declarations, it is expected that the tolerable rate will be established at approximately 2.5 percent.

The Federal Emergency Management Agency (FEMA) is confident that resourcing is sufficient to establish and maintain internal controls, human capital, and information system and other infrastructure to reduce Improper Payments (IPs) and Unknown Payments (UPs). As a tolerable rate has not yet been established for the Public Assistance - Validate as You Go (VAYGo) program, the level of resourcing will be reassessed to an established tolerable rate once the program is fully baselined.

No additional resources have been requested specifically as a result of the Payment Integrity Information Act of 2019 (PIIA) assessment and reporting results. Based on the timing and identification of the Improper Payment (IP) and Unknown Payment (UP) error rate for the Federal Emergency Management Agency (FEMA) Public Assistance - Validate as You Go (VAYGo) program, the fiscal year (FY) 2025 Budget request had already been developed. FEMA is confident that the resourcing already requested and included in the FY 2025 Budget, examples noted below, is sufficient to establish and maintain internal controls, human capital, and information system and other infrastructure to reduce IPs and UPs.

FEMA continues to implement its mission of helping people before, during, and after disasters. The agency has carried out this mission and helped communities across the Nation respond to natural hazards and emergencies. FEMA has learned that emergency management is a shared responsibility among the whole community, where disaster operations are federally supported, State managed, and locally executed. The FY 2025 Budget request continues investments in implementing this framework and advances priorities established by the Administration. Additionally, the FEMA Administrator has identified three goals critical to the Agency’s mission aligned with leadership’s vision for emergency management:

1. Instill Equity as a Foundation of Emergency Management
• Cultivate a FEMA that prioritizes and harnesses a diverse workforce
• Remove barriers to FEMA programs through a people first approach
• Achieve equitable outcomes for those that FEMA serves

2. Lead Whole of Community in Climate Resilience
• Increase climate literacy among the emergency management community
• Build a climate resilient nation
• Empower risk-informed decision making

3. Promote and Sustain a Ready FEMA and Prepared Nation
• Strengthen the emergency management workforce
• Posture FEMA to meet current and emergent threats
• Unify coordination and delivery of federal assistance

The Disaster Relief Fund (DRF) is the appropriation FEMA uses to direct, coordinate, manage, and fund eligible response and recovery efforts associated with domestic major disasters and emergencies that overwhelm State and tribal resources pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288 (as amended), 42 U.S. Code sections 5121-5207. Specifically, the DRF can provide funding for Stafford Act declarations or activities that include: (1) pre-declaration surge activities; (2) emergency declarations; (3) major disaster declarations; (4) fire management assistance grants (FMAGs); and (5) Disaster Readiness and Support (DRS) activities. Through the DRF, FEMA can authorize Federal disaster support activities as well as eligible State, local, tribal, and territorial (SLTT) actions such as emergency protection and debris removal. The DRF also funds the repair and rebuilding of eligible disaster damaged infrastructure, eligible hazard mitigation projects, financial assistance to eligible disaster survivors, and FMAGs for eligible large wildfires. In the DHS FY 2025 Budget, FEMA has requested:
• A major disaster allocation to address ongoing Stafford Act disasters. The FY 2025 budget request includes funding for continued recovery efforts in support of COVID-19, Hurricanes Maria, Fiona, and Ian, and other disaster activity.

In addition, Operations and Support (O&S) provides core mission development and maintenance of an integrated, nationwide capability to prepare for, mitigate, respond to, and recover from the consequences of major disasters and emergencies regardless of cause, in partnership with other Federal agencies, SLTT governments, volunteer organizations, and the private sector. Activities supported by this account incorporate the essential command and control functions, mitigate long-term risks, ensure the continuity and restoration of essential services and functions and provide leadership to build, sustain, and improve the coordination and delivery of support to citizens and SLTT governments. In the DHS FY 2025 Budget, FEMA has requested:
• A program change to the O&S related to Disaster Workforce Readiness. The increase in staffing would provide training and education enhancements for the FEMA Incident Management Assistance Team (IMAT) and Federal Coordinating Officer (FCO) cadres. The staffing increase is for critical and highly specialized positions, closing capability gaps and ensuring the Agency is ready to respond to disasters of increasing frequency and impacts and meet the need of survivors. Laws such as the Post Katrina Emergency Management Reform Act, the Post Sandy Recovery Act, and the Homeland Security Act of 2002 have set requirements for FEMA to gain and maintain capabilities to not only coordinate the Federal family’s ability to provide lifesaving and life sustaining resources and activities during disasters, but to also be the industry leader in training and education of the emergency management field across all levels of society. Government Accountability Office (GAO) and Office of the Inspector General (OIG) reports and findings have identified where FEMA has experienced successes, shortcomings, and gaps in mission delivery and have provided recommendations on how and where to apply resources to address shortfall. This includes FEMA’s ability to execute the requirements established in Section 302 (Coordinating Officers) and Section 303 (Emergency Support and Response Teams) of the Stafford Act. Developing and maintaining professional development programs for FCOs and IMATs is necessary to advance the Administrator’s stated goals for the management and support of FEMA’s field leaders. These requirements, both new and with enhancements to existing programs, will enhance the readiness of FEMA’s FCO and IMAT cadres and will enable increased Field Leadership capabilities.
• A program change to the O&S related to Grants Management Modernization (GMM). The increase in funding would allow for the sustainment of the Grants Management Modernization (GMM) Program FEMA Grant Outcomes (FEMA GO), Preparedness Grant Systems Portfolio (PGSP), Hazard Mitigation Grant Program (HMGP), Environmental and Historic Preservation Management Information System (EMIS), and Mitigation Electronic Grants (MT-eGrants). With these additional resources FEMA will be able to manage risk and implement sufficient controls over the grants that it administers as well as provide mission critical services and support to disaster survivors, program staff, and stakeholders. Specifically, these resources will enable the Legacy Grant Management Systems to provide adequate system’s operation and maintenance capabilities to improve the cybersecurity protection for FEMA’s intellectual property, including the FEMA GO software, and protect recipient data and FEMA data contained in the FEMA GO system.

For additional detail on the DHS FY 2025 Budget, please refer to the DHS.gov website.

Additional programmatic information

The Federal Emergency Management Agency (FEMA) Public Assistance program provides supplemental grants to state, tribal, territorial, and local governments, and certain types of private non-profits so communities can quickly respond to and recover from major disasters or emergencies. After an event like a hurricane, tornado, earthquake or wildfire, communities need help to cover their costs for debris removal, life-saving emergency protective measures, and restoring public infrastructure. FEMA provides this assistance based on authority in statutes, executive orders (EOs), regulations, and policies. The four basic components of eligibility are applicant, facility, work and cost.
• An applicant must be a state, territory, tribe, local government or private nonprofit organization.
• A facility must be a building, public works system, equipment or natural feature.
• Work is categorized as either "emergency" or "permanent." It must be required as a result of the declared incident, located within the designated disaster area, and is the legal responsibility of the applicant.
• Cost is the funding tied directly to eligible work, and must be adequately documented, authorized, necessary and reasonable. Eligible costs include labor, equipment, materials, contract work, as well as direct and indirect administrative costs.

In 2019, FEMA implemented the Validate as You Go (VAYGo) Public Assistance grants payments review process for major disaster declarations resulting from the Harvey, Irma, and Maria disasters, to comply with statutory improper payment review and reporting requirements to significantly reduce project closeout documentation requirements for recipients with proven effective internal control processes. In December 2020, FEMA expanded VAYGo to all Public Assistance and Fire Management Assistance Grants major disasters and emergency declarations beginning with disasters declared in fiscal year 2020.

FEMA began using information provided in FEMA Grants Manager, Grants Portal, and Emergency Management Mission Integrated Environment (EMMIE) to review documentation and information provided on Public Assistance Projects. VAYGo’s goal is to improve grants management internal control processes by consistently assessing payment error rates to identify potential payment integrity issues. VAYGo payment integrity testing results allows recipients to remediate questioned costs and take appropriate actions to strengthen internal controls in grant lifecycle processes. This will prevent or reduce the likelihood of future improper payments. The program intends to strengthen grants management internal controls while decreasing the complexity and burden of the grants management process for both FEMA and recipients.

On March 13, 2020, the Presidential declaration of a nationwide COVID-19 emergency increased the level of federal response from FEMA, as well as support to State, local, tribal, and territorial (SLTT) partners across the nation. The agency’s response to COVID-19 was unprecedented. When the White House directed FEMA to lead operations, COVID-19 became the first national pandemic response that FEMA has led since it was established in 1979. It was also the first time in U.S. history the President declared a nationwide emergency under Section 501b of the Stafford Act and authorized Major Disaster Declarations for all states and territories for the same incident. FEMA, through its 10 Regions, managed 59 concurrent Presidential Major Disaster Declarations for COVID-19 and worked with over 91 tribal nations. Since this disaster declaration, FEMA alone has obligated over $85 billion in COVID-19 Public Assistance.

In April 2022, FEMA strategically paused the VAYGo program to conduct listening sessions and identify ways to improve the VAYGo testing process. VAYGo was reactivated on August 9, 2023 to enhance FEMA’s Public Assistance grants management internal controls. State, local, tribal and territorial governments now have access to a comprehensive VAYGo guide that is key to achieving this goal. This payment review process complies with statutory improper payment review and reporting requirements, and significantly reduces project closeout documentation requirements for recipients with effective internal control processes through the VAYGo Closeout Benefit. The closeout benefit will be available to recipients who achieve and maintain low error rates during their yearly VAYGo testing cycles for two consecutive years. Qualified recipients will not have to submit all the associated financial documentation that is required in the standard closeout process, considerably streamlining their project lifecycle. The benefit only applies to large projects for hurricanes Harvey, Irma and Maria, and all disasters declared in fiscal year 2020 and forward, including COVID-19.

As the COVID-19 specific disaster declaration was so wide reaching and impacted so many individuals, the span of the public assistance provided is extensive. In order to sufficiently assess the appropriateness of these payments, the request for information is broad and often takes a substantial amount of time to obtain the necessary documentation and of adequate quality and completeness to enable auditability. Therefore, due to the impact of the VAYGo strategic pause as well as the significant increase in assessment burden, DHS delayed the PIIA Phase 2 reporting for the FEMA Public Assistance VAYGo and did not report in 2024. DHS is pleased to report in 2025 over a 24-month reporting period to cover assessment work over fiscal year (FY) 2021 and FY 2022 disbursement activity for the program. While the assessment results indicate that additional corrective actions and enhancements are needed to sufficiently prevent Improper Payments (IPs) and Unknown Payments (UP), the reduction in the overpayment error rate published in 2024 (0.34 percent) shows improvement over the 2022 published overpayment error rate (1.09 percent). Training efforts will continue to heavily focus on obtaining sufficient supporting documentation in order to see future improvements on the UP error rate. DHS remains fully committed to providing transparent, accurate, and complete reporting and upholding payment integrity.

Accountability for detecting, preventing, and recovering improper payments

Department-wide, Component managers are responsible for completing internal control work on payment processing as part of the Department’s Office of Management and Budget (OMB) Circular No. A-123 efforts. They are further responsible for establishing and maintaining sufficient internal controls, including a control environment that prevents improper payments from being made, effectively managing improper payment risks, and promptly detecting and recovering any improper payments that may occur. Management’s efforts, to include within DHS Headquarters as well Components, around improper payments are subject to an annual compliance review by the DHS’s Office of Inspector General (OIG). These measures are designed to hold the appropriate personnel accountable for meeting applicable improper payment reduction targets and establishing and maintaining strong internal controls around payment management.

Department-wide, the goals and requirements for strong payment integrity are communicated to all levels of staff throughout the DHS Office of the Chief Financial Officer and to relevant program office and procurement staff. The Department has taken extensive measures to ensure that managers, accountable officers, to include Component Chief Financial Officers (CFOs), programs, States, and localities are held accountable for reducing and recapturing improper payments. The Department’s CFO and senior staff have incorporated improper payment expectations and performance in their annual performance plans.

The Federal Emergency Management Agency (FEMA) regularly engages with recipients and process owners in monthly remediation meetings to ensure that appropriate accountable officials are actively taking actions to reduce Improper Payments (IPs) and identify and categorize Unknown Payment (UP) transactions as either proper or improper. If a transaction is deemed proper, no further action is taken. If a transaction is deemed technically improper, FEMA requires a corrective action be put in place in order resolve issues surrounding procedures, policies, and trainings. If a transaction is deemed improper and is associated with monetary loss, then the transaction is submitted through the FEMA debt collection process including Notice of Potential Debt Letters and Treasury Offset, if applicable.

In addition, FEMA tracks any changes to the program. Training, information sharing, and the documentation of new processes will be prioritized. Payment management reviews related to Internal Control over Financial Reporting are conducted within the DHS control environment each fiscal year accompanied with processes to review and examine for improper payments, to include but not limited to duplicate payment reviews, card payment reviews, payroll analysis, etc.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.27

Causes

Due to the nature of the Public Assistance program, the Federal Emergency Management Agency (FEMA) is reliant on additional parties, such as states, territories, etc., to oversee and execute payments on behalf of the program. However, FEMA has direct oversight over drawdown activity for the program to support the payment or reimbursement to the state and local entities. As such, DHS believes that all payments disbursed, as reviewed through the drawdown activity reviewed under the Payment Integrity Information Act of 2019 (PIIA), are within the agency's control. Therefore, all resulting improper payments, to include overpayments, have also been determined to be within the control of the agency. Overpayments identified primarily related to drawdown costs that could not be reconciled to the active and relevant supporting documentation for the period of performance applicable (for example, contract amendments were not provided to substantiate a price change). In addition, invoice supporting detail may have been determined to be insufficient or not substantiated the total drawdown value. Specific examples included use of incorrect utility and labor rates as well as claims for erroneous expenses.

For the FEMA conducted testing over the fiscal year (FY) 2023 disbursements conducted in 2025, FEMA identified improper payments across a total of 6 states and territories. The largest contributors for identified improper payments tied to New York (Region II), Connecticut (Region I), and Pennsylvania (Region III). For the assessed disbursement period, the COVID-19 pandemic response was the main contributing disaster related to the identified overpayments and thus the resulting IPs extrapolated error amount.

Payments are considered Unknown Payments (UPs) when the associated recipient and subrecipient(s), if applicable, fail to provide adequate supporting documentation in accordance with the grant agreement, such as amendments or price tables, or to support the disbursement drawdown amount. Without adequate supporting documentation, FEMA is unable to discern whether the payments were proper or improper as the disbursement could not reconciled to the terms and conditions of the agreement. To assert to the appropriateness of the payment, FEMA generally requests the following information from the recipients:
• Proof of payment documenting drawdown paid to correct subgrantee / disaster
• Private nonprofit support to include Facility Questionnaire, Internal Review Service (IRS) Letter confirming status, etc.
• Support for Private Property Debris Removal
• Documentation to substantiate the work as eligible and the cost estimate as reasonable
• Force account labor and equipment supporting documentation
• Material supporting documentation
• Rented equipment supporting documentation
• Photographs (Sites, Demonstrating Threat, Hazardous Materials)
• Insurance Coverage (Policies, Statement of Losses, Reimbursements, Other)

As part of this incremental oversight review, financial documentation is to be reviewed throughout the lifecycle of the grant to support the grantee drawdowns. Based on testing results, necessary documentation is not always made readily available by the regional, state, and local entities to fully support the drawdown activity. UPs have been attributable to:
• Missing proof of payment to subrecipient vendors for supplies and equipment
• Labor timesheets and documentation of recipient salary / payroll detail
• Etc.

For the FEMA conducted testing over the FY 2023 disbursements conducted in 2025, FEMA was unable to obtain sufficient documentation across a total of 11 states and territories. The largest contributors for the lack of supporting documentation provided tied to South Carolina (Region IV), Kentucky (Region IV), New Mexico (Region VI), and California (Region IX). For the assessed disbursement period, the COVID-19 pandemic response was the main contributing disaster related to the lack of sufficient documentation and thus the resulting UPs extrapolated error amount.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $20.4 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $20.4 M

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $240.08 M

Prevention

Grants Manager is the internal platform used by the Federal Emergency Management Agency (FEMA) specialists, while the Grants Portal is the external platform used by applicants, recipients, and subrecipients to manage their projects. With the enhanced automation to allow for documentation submission, FEMA can obtain documentation required for various points of the grants process:
• Obligation – FEMA collects and reviews documentation from applicants to determine work and cost eligibility. Information may be based on estimates for work to be completed.
• Disbursement – Recipient collects, reviews, and maintains documentation from the subrecipient.
• Validate as You Go (VAYGo) – FEMA collects and reviews documentation from applicants to determine work and cost eligibility. Information may be based on estimates for work to be completed.
• Closeout –Recipient submits to FEMA information that certifies a project is complete, all terms and conditions have been met, and final costs are reconciled based on actual costs.

FEMA developed a VAYGo Module within the FEMA Grants Manager / Grants Portal platform. The module has workflows to support VAYGo testing, process requests for information, and enable FEMA Recipients to upload documentation for their respective VAYGo tested samples. FEMA continues to collaborate with Public Assistance Business Architecture to enhance the VAYGo Module with the goal of improving the VAYGo customer service experience for internal and external VAYGo stakeholders.

Readily available on the FEMA.gov website, the FEMA supplies training guides related to the Public Assistance program. In addition, the website and the FEMA Public Assistance Grants Portal YouTube channel also includes video tutorials. The VAYGo Headquarter (HQ) conducts training courses via VAYGo University to support Regional and Recipient VAYGo stakeholders. FEMA has transitioned the Emergency Management Institute to exist within the National Disaster Emergency Management University (NDEMU). This training resource will continue to provide foundational training and development for emergency managers.

VAYGo HQ drafted a new VAYGo Guide 2.0 during fiscal year (FY) 2025, planned for early 2026 publication, that will enhance the testing environment for all VAYGo stakeholders. In addition, the FEMA Office of the Chief Financial Officer (OCFO) and the VAYGo HQ team are continuing efforts with the FEMA Office of Chief Counsel to formally authorize the Public Assistance - VAYGo program to issue Notices of Potential Debt Letters (NPDLs) upon completion of each assessment cycle when Overpayments are identified to ensure timely resolution and accountability.

The Payment Integrity Information Act of 2019 (PIIA) requires agencies to review and assess all programs and activities they administer and identify those determined to be susceptible to significant improper payments, estimate the annual amount of improper payments, and submit those estimates to Congress. In accordance with the Office of Management and Budget (OMB) Circular No. A-123, Appendix C, "Requirements for Payment Integrity Improvement", federal agencies are required to assess improper payments and report annually on their efforts. In compliance with these requirements, the FEMA Public Assistance - VAYGo program has conducted reviews and published results in 2024 and 2025, over FY 2021, 2022, and 2023 program disbursement activity. The FEMA Public Assistance - VAYGo program will conduct a review and publish results in 2026 over FY 2024 program disbursement activity. As FEMA is assessing disbursement activity for the program two years in arrears, impacts of corrective actions taken in 2024 and prior may be seen in the 2026 assessment results.
Public Assistance is designed to reimburse everything from an hour of overtime to the replacement of an entire wastewater treatment facility. It is designed to be flexible and support the range of recovery needs. The program delivery model, built on standard roles and processes, enables the Federal Emergency Management Agency (FEMA) to employ a risk-based approach that recognizes that not all Applicants or projects require the same level of resources, documentation, or oversight. FEMA adjusts its approach based on risks. The risk-based approach balances developing policy, delivering the program, and prioritizing resources to maintain an efficient use of resources. FEMA prioritizes resources and effort where risk and complexity are high. That means ensuring personnel and technical resources are made available, and administrative oversight is more in-depth, where a disaster, Applicant, or project represents a higher risk in one or more of the four risk areas–Mission, Finances, Program, and Reputation. By contrast, FEMA limits level of effort, resources, and administrative oversight where risk is low. That means assigning fewer personnel or technical resources and decreasing requirements and level of review where an applicant or project does not pose a significant risk in one or more of the four risk areas.

The root causes of the Improper Payments (IPs) and Unknown Payments (UPs) have remained consistent. Generally, UPs steadily account for over 90 percent of the overall reported error rate and valuation. FEMA continues to work with recipients on obtaining additional information and missing documentation for the UPs. To assist in obtaining sufficient supporting documentation in a timely manner, FEMA remains committed to streamlining and automating the Public Assistance process, training relevant parties and stakeholders, ensuring that policy and process documentation is current and available, and maintaining consistent and regular oversight through internal reviews and audit activity while not overburdening grant recipients.

The Federal Emergency Management Agency (FEMA) Public Assistance payment appropriateness is heavily reliant on state and local entities and the relationship that they have with vendors. Corrective actions taken and future efforts planned focus heavily on sustaining educational efforts and sharing interim directives and reimbursement package requirements with Regional, state, and local partners. FEMA continues to work with Recipients on obtaining additional information and missing documentation for the Unknown Payments (UPs). These efforts and the collaboration to strengthen internal controls with internal and external Validate as You Go (VAYGo) stakeholders have been successful in the past and have led to continuous decrease of overpayments. For fiscal year (FY) 2020 disbursement activity (reported in 2022), FEMA reported an overpayment error rate of 1.09 percent. Based on the FY 2021 and FY 2022 disbursement activity (consolidated for reporting in 2024), the overpayment error rate improved to 0.34 percent. The assessment over the FY 2023 disbursement activity has shown further improvement with an estimated overpayment rate of only 0.10 percent. FEMA is confident that the continuation of these efforts will have a positive impact on the reduction of UPs going forward as well.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit, Automation, Change Process, Training Audit, Automation, Change Process, Training
Unknown payments Audit,Automation,Change Process,Training Audit,Automation,Change Process,Training

Eligibility element/information needed Description of the eligbility element/information
Financial The financial position or status of a beneficiary, recipient, or their family

Additional information

The Federal Emergency Management Agency (FEMA) Public Assistance program provides supplemental grants to state, tribal, territorial, and local governments, and certain types of private non-profits so communities can quickly respond to and recover from major disasters or emergencies. After an event like a hurricane, tornado, earthquake or wildfire, communities need help to cover their costs for debris removal, life-saving emergency protective measures, and restoring public infrastructure. FEMA provides this assistance based on authority in statutes, executive orders, regulations, and policies. The four basic components of eligibility are applicant, facility, work and cost.
• An applicant must be a state, territory, tribe, local government or private nonprofit organization.
• A facility must be a building, public works system, equipment or natural feature.
• Work is categorized as either "emergency" or "permanent." It must be required as a result of the declared incident, located within the designated disaster area, and is the legal responsibility of the applicant.
• Cost is the funding tied directly to eligible work, and must be adequately documented, authorized, necessary and reasonable. Eligible costs include labor, equipment, materials, contract work, as well as direct and indirect administrative costs.

In 2019, FEMA implemented the Validate as You Go (VAYGo) grants payment review process for major disaster declarations resulting from the Harvey, Irma, and Maria disasters, to comply with statutory improper payment review and reporting requirements to significantly reduce project closeout documentation requirements for recipients with proven effective internal control processes. In December 2020, FEMA expanded VAYGo to all Public Assistance and Fire Management Assistance Grants major disasters and emergency declarations beginning with disasters declared in fiscal year 2020.

FEMA began using information provided in FEMA Grants Manager, Grants Portal, and Emergency Management Mission Integrated Environment (EMMIE) to review documentation and information provided on Public Assistance Projects. VAYGo’s goal is to improve grants management internal control processes by consistently assessing payment error rates to identify potential payment integrity issues. VAYGo payment integrity testing results allows recipients to remediate questioned costs and take appropriate actions to strengthen internal controls in grant lifecycle processes. This will prevent or reduce the likelihood of future improper payments. The program intends to strengthen grants management internal controls while decreasing the complexity and burden of the grants management process for both FEMA and recipients.

On March 13, 2020, the Presidential declaration of a nationwide COVID-19 emergency increased the level of federal response from FEMA, as well as support to state, local, tribal, and territorial partners across the nation. The agency’s response to COVID-19 was unprecedented. When the White House directed FEMA to lead operations, COVID-19 became the first national pandemic response that FEMA has led since it was established in 1979. It was also the first time in U.S. history the President declared a nationwide emergency under Section 501b of the Stafford Act and authorized Major Disaster Declarations for all states and territories for the same incident. FEMA, through its 10 Regions, managed 59 concurrent Presidential Major Disaster Declarations for COVID-19 and worked with over 91 tribal nations.

As the COVID-19 specific disaster declaration was so wide reaching and impacted so many individuals, the span of the public assistance provided is extensive. To sufficiently assess the appropriateness of these payments, the request for information is broad and often takes a substantial amount of time to obtain the necessary documentation and of adequate quality and completeness to enable auditability. While the assessment results indicate that additional corrective actions and enhancements are needed to collect sufficient documentation to reduce Unknown Payments (UPs), the reduction in the overall Improper Payment (IP) and UP error rate published in 2025 (1.22 percent) shows continued improvement over the 2024 published IP and UP error rate (3.86 percent). Corrective action efforts will continue to heavily focus on obtaining sufficient supporting documentation to see future improvements related to the UP error rate. DHS remains fully committed to providing transparent, accurate, and complete reporting and upholding payment integrity.

Reduction target

1.5 %

Although the Federal Emergency Management Agency (FEMA) Public Assistance - Validate as You Go (VAYGo) program is reporting an estimated error rate that identifies the program is susceptible to significant improper payments, FEMA is confident that the agency has what is needed with respect to internal controls, human capital and information system and other infrastructure to reduce Improper Payments (IPs) and Unknown Payments (UPs) to a tolerable rate.

Based on the historical reporting of the Public Assistance – VAYGo payment integrity results, steady improvements in the IP and UP error rates have been realized. With the corrective actions taken thus far and planned for ongoing implementation, FEMA is confident that existing resourcing is sufficient to continue the prevention and recoupment of improper payments.

No additional resources have been requested specifically for the Federal Emergency Management Agency (FEMA) Public Assistance – Validate as You Go (VAYGo) program in the DHS fiscal year (FY) 2026 budget as a result of the Payment Integrity Information Act (PIIA) assessment. The Disaster Relief Fund (DRF) is the appropriation FEMA uses to direct, coordinate, manage, and fund eligible response and recovery efforts associated with domestic major disasters and emergencies that overwhelm State and tribal resources pursuant to the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288 (as amended), 42 U.S. Code sections 5121-5207. Specifically, the DRF can provide funding for Stafford Act declarations or activities that include: (1) pre-declaration surge activities; (2) emergency declarations; (3) major disaster declarations; (4) fire management assistance grants (FMAGs); and (5) Disaster Readiness and Support (DRS) activities. Through the DRF, FEMA can authorize Federal disaster support activities as well as eligible State, local, tribal, and territorial (SLTT) actions such as emergency protection and debris removal. The DRF also funds the repair and rebuilding of eligible disaster damaged infrastructure, eligible hazard mitigation projects, financial assistance to eligible disaster survivors, and FMAGs for eligible large wildfires. To continue to support disaster response, FEMA included proposed budget allocations to address ongoing Stafford Act disasters in the FY 2026 budget request which includes continued DRF funding for Public Assistance.

For additional detail on the DHS FY 2026 budget, please refer to the DHS.gov website.

Department-wide, Component managers are responsible for completing internal control work on payment processing as part of the Department’s Office of Management and Budget (OMB) Circular No. A-123 efforts. They are further responsible for establishing and maintaining sufficient internal controls, including a control environment that prevents improper payments from being made, effectively managing improper payment risks, and promptly detecting and recovering any improper payments that may occur. Management’s efforts, to include within DHS Headquarters as well Components, around improper payments are subject to an annual compliance review by the DHS’s Office of Inspector General (OIG). These measures are designed to hold the appropriate personnel accountable for meeting applicable improper payment reduction targets and establishing and maintaining strong internal controls around payment management.

The goals and requirements for strong payment integrity are communicated Department-wide to all levels of staff throughout the DHS Office of the Chief Financial Officer and to relevant program office and procurement staff. The Department has taken extensive measures to ensure that managers, accountable officers, to include Component Chief Financial Officers (CFOs), programs, States, and localities are held accountable for reducing and recapturing improper payments. The Department’s CFO and senior staff have incorporated improper payment expectations and performance in their annual performance plans.

The Federal Emergency Management Agency (FEMA) regularly engages with recipients and process owners in monthly remediation meetings to ensure that appropriate accountable officials are actively taking actions to reduce Improper Payments (IPs) and identify and categorize Unknown Payment (UP) transactions as either proper or improper. If a transaction is deemed proper, no further action is taken. If a transaction is deemed technically improper, FEMA requires a corrective action be put in place in order resolve issues surrounding procedures, policies, and trainings. If a transaction is deemed improper and is associated with monetary loss, then the transaction is submitted through the FEMA debt collection process including Notice of Potential Debt Letters and Treasury Offset, if applicable.

In addition, FEMA tracks any changes to the program. Training, information sharing, and the documentation of new processes will be prioritized. Payment management reviews related to Internal Control over Financial Reporting are conducted within the DHS control environment each fiscal year accompanied with processes to review and examine for improper payments, to include but not limited to duplicate payment reviews, card payment reviews, payroll analysis, etc.

$0 M