The Federal Emergency Management Agency (FEMA) mishandled nearly $10 billion in funds during the COVID-19 pandemic, according to a newly released audit conducted by the Department of Homeland Security (DHS).
The audit examined FEMA’s financial activities between January 2020 and 2023, revealing widespread mismanagement and failures in adhering to established funding guidelines.
One of the most significant findings of the audit was that FEMA distributed $1.5 billion to an unidentified state for hiring medical staff without properly vetting the expenses. The report noted that these funds “could have been put to better use for other disasters,” highlighting concerns about the agency’s decision-making during the crisis.
“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 audit concluded.
In addition to the misallocation of funds, FEMA also disbursed $8.1 billion in “questioned costs”—expenses whose legitimacy has yet to be confirmed. The agency was also found to have made $32.8 million in improper payments, further raising concerns about its financial oversight and accountability.
Adding to these concerns, Elon Musk’s DOGE team recently uncovered that FEMA had spent $59 million in a single week to house illegal immigrants in luxury hotels in New York City.
“The @DOGE team just discovered that FEMA sent $59M LAST WEEK to luxury hotels in New York City to house illegal migrants,” Musk posted on X (formerly Twitter) on Monday. “Sending this money violated the law and is in gross insubordination to the President’s executive order. That money is meant for American disaster relief and instead is being spent on high-end hotels for illegals!”
The backlash following Musk’s findings was swift. Assistant DHS Secretary Tricia McLaughlin announced that FEMA has terminated four officials involved in the misuse of funds, including the agency’s Chief Financial Officer. The terminations mark one of the most significant accountability measures taken against FEMA leadership in recent years.
Musk has since called for the agency to be shut down entirely, arguing that it has become bloated and inefficient. His criticism aligns with broader efforts by the Trump administration to streamline government operations and reduce wasteful spending.
According to a report by the Daily Mail, DHS Secretary Kristi Noem, whose department oversees FEMA, has also expressed doubts about the agency’s future. Over the weekend, Noem reportedly stated that if President Donald Trump asked for her recommendation on FEMA, she would advise him to “get rid” of it.
Trump himself echoed these sentiments in a post on Truth Social on Tuesday, where he criticized FEMA’s spending practices and its alleged bias toward Democratic-controlled areas.
“FEMA spent tens of millions of dollars in Democrat areas, disobeying orders, but left the people of North Carolina high and dry. It is now under review and investigation,” Trump wrote.
He went on to call FEMA under President Joe Biden a “disaster” and suggested that the agency should be eliminated. Instead, he proposed that disaster relief efforts be handled at the state level, arguing, “Big savings, far more efficient.”
The debate over FEMA’s role in disaster response has been ongoing for years, but these latest revelations have intensified discussions about whether the agency should continue operating in its current form. Critics argue that its inefficiencies and mismanagement make it an unnecessary burden on taxpayers, while supporters believe that a federal response agency is essential for coordinating large-scale disaster relief.
As investigations into FEMA’s financial practices continue, the future of the agency remains uncertain. With growing calls for reform—or outright dissolution—FEMA may soon face one of its most significant restructurings since its establishment in 1979.