Report: DOGE has found FEMA misspent BILLIONS of dollars of taxpayer money

WASHINGTON, DC - Even before Elon Musk’s Department of Government Efficiency (DOGE) began its task of examining federal agencies in search of fraud and abuse, an audit conducted of the Federal Emergency Management Agency (FEMA) mismanaged nearly $10 billion during the COVID pandemic between 2020 and 2023, The New York Post reports. 

FEMA has come under fire recently due to its lackluster response to hurricanes and related flooding in Georgia, South Carolina, and specifically North Carolina and California wildfires. It has also been slammed after word came forth that the agency, which is supposed to deal with disaster relief, has been spending money to house illegal aliens. 

The audit showed that, among other issues, FEMA approved a grant of $1.1 billion even though it was only evidenced by a single piece of paper that wasn’t itemized. The Department of Homeland Security’s Office of the Inspector General conducted that audit on Jan. 30. 

The report noted that the request was “not prepared by a licensed professional engineer or cost-estimating professional.” 

President Trump, trying to fulfill a campaign promise that saw him sweep to victory in November, has promised to conduct a complete audit of government spending through DOGE, headed by billionaire businessman Elon Musk. FEMA has been particularly targeted by Trump and he has called for the department to undergo a complete overhaul. FEMA enjoyed a budget of $65 billion for FY-2025. 

The audit found that during COVID, $1.5 billion was paid out “for one state’s medical staffing” without proper vetting and “could have been put to better use for other disasters. " 

“These issues occurred due to the unprecedented circumstances surrounding the COVID-19 pandemic and FEMA not following established requirements when delivering public assistance funding,” the report said while not naming the states that received FEMA pandemic payments. 

The report also cited $8.1 billion distributed by FEMA as “costs that have yet to be determined allowable. " 

Former Louisiana congressman Garrett Graves, a frequent FEMA critic, slammed the agency and said “no doubt” FEMA misused COVID disaster relief. 

“What we sometimes fail to remember is that in the aftermath of a disaster, there are victims, and this bureaucracy has just continued to re-victimize those victims,” said Graves, who has been floated as a possibility to head the agency, although he says he does not want the job. 

“I appreciate the gesture, but it’s such a dysfunctional bureaucracy that I don’t think I would last a month,” he told The Post, adding that he supports Elon Musk’s plans to streamline FEMA. 

Meanwhile, Homeland Security Secretary Kristi Noem told CNN Sunday that she supports eliminating FEMA “the way it exists today.” 

Musk revealed this week that DOGE “just discovered” FEMA paid out over $59 billion to house illegal aliens at luxury hotels in New York City, while many victims of Hurricane Helene in North Carolina are living in tents. 

In an X post, Musk wrote, “Sending this money violated the law and is in gross insubordination to the President’s executive order.” 

Homeland Security confirmed that four (now former) FEMA employees were fired over the payment on Tuesday, including the Chief Financial Officer, two program analysts, and a grants specialist. A request was also made to send the money back. 

Earlier audits showed FEMA doled out over $1.4 billion in housing and aid for illegal aliens over the past two years. 

In 2023, the DHS Office of the Inspector General issued a report highlighting an investigation of approximately $110 million in humanitarian relief funds given to local organizations. It showed those organizations misspent the funds, couldn’t provide required receipts or documentation, and that some of the aid went to illegal aliens. 

Last October, former Secretary of Homeland Security Alejandro Mayorkas was criticized for saying FEMA didn’t have enough funds to last through the Atlantic hurricane season. Helene slammed through the southeastern United States, followed only days later by Hurricane Milton, which hit Florida and caused an estimated $60 billion in damage. 

CNN reported that FEMA secured an additional $20 billion in funds from Congress after the back-to-back hurricanes. The agency spent $9 billion of those funds in just over a week. 

In the aftermath of those two storms, then-Florida Rep. Matt Gaetz (R-FL) sent Mayorkas a letter criticizing the response to the hurricanes. 

“FEMA has wasted taxpayer funds, misappropriated funds, and left other federal, state, and local responders without deployment orders on the ground.” 

Gaetz cited “whistleblowers in numerous emergency management functions” as its source. 

In August 2024, an audit of FEMA found it wasted $7 billion in “unliquidated funds that could potentially be returned to the Disaster Relief Fund” because FEMA agents did not follow the proper processes. 

“Also, federal regulations and FEMA guidance provide no incentive to close out grants in a timely manner or consequences for failure to do so,” the audit read, which means money was in the accounts of states that did not need it. 

“Without improved oversight and stronger policies, billions of dollars of unliquidated funds that could otherwise be returned…will remain obligated to state, territorial, tribal, or local governments and unavailable for use in providing relief in connection with current disasters,” the audit said. 

The report further showed that it “reviewed a sample of 20 other grants and identified approximately $32.8 billion in improper payments.” 

The House Oversight and Government Reform Committee in 2017 highlighted FEMA’s lack of transparency, finding the agency wasted millions in purchasing homes for victims of floods and hurricanes. 

The homes, which cost up to $150,000 each to build and maintain for a year and a half, were typically either given away or sold after FEMA was done with them. After a flood in Baton Rouge in 2016, FEMA deactivated some 4,350 of such homes, the House committee reported. 

President Jimmy Carter established the agency in 1979 via an executive order. The Post reported that it is tasked with working with emergency management organizations in state and local governments and issuing grants to victims of natural disasters to help with temporary housing, funeral, and medical expenses.