FEMA Owes $10 Billion to Disaster-Hit Communities — and It Simply Isn't Paying

## Nearly $10 Billion Owed, and Communities Can't Get Paid In El Dorado County, California — a community in the foothills of the Sierra Nevada that experienced one of the most destructive wildfires in the state's recent history with the 2021 Caldor Fire — county staff have spent three years preparing an application tha

In El Dorado County, California — a community in the foothills of the Sierra Nevada that experienced one of the most destructive wildfires in the state's recent history with the 2021 Caldor Fire — county staff have spent three years preparing an application that would allow them to enroll more than 500 homes in a fire-resistant materials and hardening program. The program is funded through FEMA. The county has submitted its paperwork and made every required preparation. FEMA simply has not responded. For more than a year.

El Dorado County is not an edge case or an administrative anomaly. It is one of hundreds of communities across the United States experiencing an identical problem: FEMA owes them money, has acknowledged owing them money, and is not paying. The scale of the backlog, according to internal agency documents obtained by NPR, approaches $10 billion in total outstanding obligations. That figure represents years of accumulated disaster recovery reimbursements, mitigation grants, and infrastructure repair funding that communities have in many cases already spent — incurring debt or cutting other programs to fund projects that federal commitments led them to believe would be reimbursed.

The specific mechanisms producing this backlog are multiple and overlapping. FEMA has lost thousands of employees since the current administration took office. Its CORE workforce — the Cadre of On-Call Response and Recovery employees who make up roughly 40% of the agency's operational capacity — had contract renewals restricted to 180-day terms and then subjected to approval requirements from DHS leadership, dramatically slowing the agency's ability to process claims. A government shutdown lasting eight weeks left FEMA employees unpaid for an extended period, creating additional processing paralysis in the middle of an ongoing disaster backlog.

The FEMA backlog falls across two primary funding streams whose specific characteristics matter for understanding who bears the burden most acutely. The Public Assistance Program reimburses local governments for the cost of repairing major public infrastructure — roads, bridges, water treatment plants — after federally declared disasters. The specific program design requires communities to incur the costs upfront, undertake the repair work, and then seek reimbursement from FEMA. When FEMA's payment processing slows to the degree that the current backlog represents, communities that have borrowed to fund disaster recovery find themselves servicing debt on projects they expected to be compensated for, without the compensation arriving.

The Hazard Mitigation Grant Program — which funds proactive improvements like the El Dorado County fire hardening project — has been further compromised by the administration's cancellation of the Building Resilient Infrastructure and Communities program on the grounds that it was focused on climate initiatives. A federal judge ordered the program reinstated, but FEMA has provided no timeline for when the cancelled funding might actually flow.

The communities most exposed to the backlog's consequences are those that are simultaneously most vulnerable to disaster and least resourced to absorb the financial shock of delayed reimbursement. Smaller counties and municipalities without significant reserve capacity have been forced into emergency borrowing or service cuts to bridge the funding gap — consequences that fall on residents who are already managing the aftermath of the disasters that created the FEMA claims in the first place.

The specific urgency that frames the FEMA backlog story is the Atlantic hurricane season, which begins June 1 — approximately six weeks from the date of this writing. FEMA's capacity to respond to major hurricane disasters depends on the functional availability of exactly the workforce and financial resources that the current backlog and staffing reductions have compromised. New Homeland Security Secretary Markwayne Mullin acknowledged the problem directly during his first official visit to survey Hurricane Helene recovery in North Carolina, saying he was trying to push things forward 'as fast as possible' and acknowledging that 'disasters are happening constantly.'

The specific Disaster Relief Fund — the financial mechanism through which FEMA's disaster response is funded and which, unlike many federal funding streams, does not automatically lapse during government shutdowns — is running low. The DHS appropriations bill that would replenish the fund with more than $26 billion has not been passed, meaning FEMA is heading into hurricane season with a depleted financial reserve and a reduced operational workforce.