FEMA let one COVID grant grow from $853 million to $9.6 billion
Summary
In September 2020, FEMA awarded one state $853 million to cover pandemic medical staffing. Fourteen months and five funding modifications later, the same grant had grown to $9,553,782,360 -- about 14 percent of everything FEMA had obligated nationwide for COVID-19 emergency protective measures by the end of fiscal 2023. FEMA's inspector general found the agency still hadn't determined whether $8.1 billion the state had drawn down was an allowable cost at all, and that a three-year-old post-payment review process meant to catch bad claims had validated zero percent of the grant's $9.1 billion in obligations. The failure wasn't confined to one grant: nationally, FEMA's own cost estimate for the pandemic missed nearly tenfold, growing from $17.6 billion projected in its first 30 days to $171.6 billion four years later.
A grant that grew eleven times over
In September 2020, awarded a state $853 million in emergency protective measures funding to address medical staffing shortages at 236 healthcare facilities. The state passed the money to a subrecipient, who signed three time-and-materials contracts for contract medical staff. 's own project-worksheet record⧉ shows what happened next: through a sequence of funding modifications the agency calls 'versions,' the grant's obligation total reached $9,553,782,360 by December 2021 -- roughly 11.2 times the original award, in just over a year.
traces the growth to 's own estimating process. The first cost estimate for the project, about $1.1 billion of the eventual total, was supported by a single sheet of paper with no itemized costs, and was not prepared by a licensed professional engineer or certified cost estimator as 's own guidance requires. In April 2023, after raised the size of the unliquidated balance, de-obligated $500 million, bringing the net total to $9,053,782,360 -- still equal to about 14 percent of everything had obligated nationwide for COVID-19 emergency protective measures through the end of fiscal 2023.
View data as table
| Sept. 2020 (initial award) | 0.9 |
|---|---|
| Dec. 2021 (peak, version 5) | 9.6 |
| Apr. 2023 (net, after de-obligation) | 9.1 |
Three years of a review that reviewed nothing
The grant's unliquidated balance -- money obligated but not yet paid out or reconciled -- stayed above $1.5 billion for two straight years, ranging as high as almost $4 billion between May 2021 and April 2023. As of April 2024, had not determined the cost allowability of $8.1 billion the state had already drawn down: it had begun, but not completed, review of $1.3 billion, and had taken no action at all on the remaining $6.8 billion.
The tool built for exactly this -- Validate As You Go, or VAYGo, a process meant to check spending shortly after it happens rather than waiting until a project formally closes -- had a completion rate of zero percent on the grant's $9.1 billion in obligations, nearly three years after that testing began. Of the $1.3 billion had started reviewing, it had already questioned $255 million as of March 2024. 's own Grants Manager system logged 893 days of remediation with the state, with no final eligibility determination reached. After closed its fieldwork, told the office it had since completed VAYGo work on $6.9 billion in expenditures -- a claim says explicitly it neither verified nor audited.
View data as table
| Review begun, not completed | 1.3 |
|---|---|
| No action taken | 6.8 |
An instruction nobody could confirm
's audit also drew a random sample of 20 other large completed COVID-19 projects, totaling $58 million out of a nationwide universe of 8,420 projects ranging from $131,100 to $100 million. Six of the 20 -- about $33 million, or 56 percent -- lacked the documentation required to confirm the work was actually done before paid for it, contributing to $32.8 million in payments classified as improper. Three staff at 's Consolidated Resource Centers separately told they had been instructed to 'not do a deep dive' on cost eligibility during a 2020 'Stand Down' meeting held ahead of an expected surge in project submissions -- an allegation says it could not corroborate even after requesting audio or video of the meeting; 's own records yielded no documentary evidence either way.
Of the 20 sampled projects, reduced reimbursement on five, cutting $1,800,664 in requested funding -- and in all five cases skipped the determination memorandum 's own manual requires whenever a reimbursement request is denied or reduced. made seven recommendations; concurred with all of them. considers five resolved. Two remain open and unresolved: reviewing the grant's unliquidated obligations for possible return to the Disaster Relief Fund, and conducting a full incurred-cost audit of the medical staffing project itself.
The same failure, at national scale
A GAO report⧉ released seven months before 's found the identical failure mode playing out across 's entire COVID-19 response. As of March 2024, had obligated $125.3 billion from the Disaster Relief Fund for COVID-19 and expended $103.6 billion of it. 's initial estimate, made 30 days after the pandemic's major disaster declarations in early 2020, put the total cost at $17.6 billion -- a figure officials told was 'blown out of the water' by actual costs. The estimate climbed to $63.8 billion at six months, $122 billion at 12 months, and stood at $171.6 billion as of March 2024: a nearly tenfold miss from the 30-day figure to the final one.
found underestimated its COVID-19 obligations in fiscal years 2021 and 2022 and generally missed its own estimation-accuracy goal, telling auditors that shifting policies and unprecedented uncertainty made the disaster hard to size up in advance. COVID-19 assistance alone accounted for 20 percent of everything the Disaster Relief Fund had spent between 1992 and 2021, and 2020 and 2021 -- three-quarters of it pandemic spending -- were the two highest-spending years in the fund's history. 's recommendation was narrow: that document what it learned from COVID-19 for the next catastrophic disaster. has not yet gotten through validating the last one.
View data as table
| 30-day estimate (Apr. 2020) | 17.6 |
|---|---|
| 6-month estimate | 63.8 |
| 12-month estimate | 122 |
| Current estimate (Mar. 2024) | 171.6 |
The takeaway
- A grant can grow elevenfold on an uncertified cost estimate, and no one stops it. 's own guidance required a licensed engineer or certified estimator to build the cost projection driving this project; the first version was one unsigned page.
- A review process that never finishes isn't oversight. Nearly three years into validating a $9.1 billion grant, had confirmed the propriety of none of it -- and the one unverified claim of later progress ($6.9 billion) came only after auditors had already closed their books.
- The single-grant failure and the national one rhyme, even if the numbers aren't the same measurement. One state's grant grew roughly 11x from its initial award to its peak obligation; nationally, 's own cost estimate for the whole pandemic missed its final total by roughly 10x. Different figures, measuring different things -- but both point to an agency that could not size disaster costs before, or verify them after, the money went out.
Figures on the medical staffing grant, the 20-project sample, and the 'Stand Down' allegation are from Report -25-13 (Jan. 30, 2025); figures on 's total COVID-19 obligations and its Life of Disaster cost estimates are from -24-106676 (July 9, 2024). Both were read directly. cites this single grant's size two ways with two different denominators -- about 14 percent of nationwide emergency protective measures obligations, and about 13 percent of Disaster Relief Fund COVID-19 obligations -- both are reported here as stated them, not combined. 's claim of subsequently completing $6.9 billion in VAYGo work was not independently verified by and is presented here as an unverified agency assertion, not a confirmed fact. Two of 's seven recommendations, covering the grant's unliquidated balance and a full incurred-cost audit, remained open and unresolved as of this report.
Sources(2) ▾
- U.S. Department of Homeland Security, Office of Inspector General, FEMA's Insufficient Oversight of COVID-19 Emergency Protective Measures Grants Led to Over $8.1 Billion in Questioned Costs and $1.5 Billion in Over-obligated Funds (OIG-25-13) (2025-01-30) — The single-state medical staffing grant's obligation history (Table 1), the $8.1B undetermined cost allowability, the 0% VAYGo completion rate, the 893-day remediation, the 20-project documentation sample, the 'Stand Down' meeting allegation, the determination-memorandum gap, and the seven recommendations oig.dhs.gov · original document
- U.S. Government Accountability Office, Disaster Relief Fund: Lessons Learned from COVID-19 Could Improve FEMA's Estimates (GAO-24-106676) (2024-07-09) — 's total COVID-19 DRF obligations/expenditures as of March 2024, the Life of Disaster estimate trajectory ($17.6B to $171.6B), 's underestimation in FY2021/FY2022, and 's lessons-learned recommendation gao.gov · original document
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's inspector general spent more than three years tracing what happened to a single COVID-19 grant to one state, and the trail runs through nine funding modifications, a cost estimate built on one uncertified sheet of paper, and a post-payment review process that, after nearly three years of running, had validated none of it. The same audit widened its lens to 20 other large projects nationwide and found matching failures. A separate report, examining 's COVID-19 spending as a whole, found the same pattern at the scale of the entire $125.3 billion program: an agency that could not reliably estimate, or later verify, what the pandemic was costing.