BIRMINGHAM, Alabama -- The tornado turned Jonathan Stewart's house into a pile of rubble on April 27, nothing but bricks and debris scattered ovei a concrete slab.

Days later, an inspector from the Federal Emergency Management Agency came to Stewart's address in Pleasant Grove, and took some notes and pictures. Three days later, Stewart received a letter stating he didn't qualify for a FEMA grant. One of the reasons: Insufficient damage.

'Based on your FEMA inspection, we have determined that the disaster has not caused your home to be unsafe to live in,' the letter read.

The reaction of Stewart and his wife: 'Lisa and I looked at the letter and laughed,' he said. Similarly, Lashunta Tabb's house in North Smithfield Manor has three damaged outer walls, it's stripped of its siding, and more than half of the roof is gone.

There's no way to live there, she said. But after a FEMA inspection, she received a letter that was word for word what the Stewarts received: Insufficient damage.

"Although the disaster may have caused some minor damage," both letters stated, "it is reasonable to expect you or your landlord to make these repairs. At this time you are not eligible for FEMA housing assistance."

These head-scratching assessments -- where the words don't seem to reflect reality -- have been delivered to an unknown number of Alabama tornado victims. But FEMA says "insufficient damage" is the top reason in Alabama that people are initially determined ineligible for FEMA grants.

FEMA officials urge applicants who believe they were incorrectly declared ineligible -- for whatever reason -- to appeal.

Many of the findings of insufficient damage are correct, according to Lynda Lowe, a FEMA deputy branch director for individual assistance.

"A lot of those people registered but didn't have damage," she said.

Keith Arthur, FEMA's inspection service coordinator for Alabama, said he couldn't be sure what happened in individual cases such as with homes belonging to Tabb and the Stewarts. The truth of a finding can be easily determined on appeal, he said.

But FEMA reported that as of Wednesday, less than 1 percent of the 25,081 applicants initially declared ineligible for any reason had appealed. FEMA couldn't provide a number for how many of those declarations were due to insufficient damage.

Stewart said he now knows his insurance coverage will replace his house, so he would be ineligible for a FEMA grant anyway. But he wonders how many others who would be eligible for housing assistance -- because they're uninsured or under-insured -- got turned off by the finding of insufficient damage and have given up.

FEMA spokeswoman Renee Bafalis said getting people to appeal has been the agency's biggest hurdle. "If you have a question why you received a determination of ineligibility, go in there (to a disaster recovery center) and let them look it up and help you file an appeal," she said.

An applicant has 60 days from the date of the determination letter to appeal.

Lawsuits against FEMA

Stories about insufficient damage findings by FEMA, similar to the Stewarts' and Tabb's, abound in news accounts and blogs after nearly every recent disaster.

A 2011 tornado victim in North Carolina whose ravaged home was condemned by the city received an "insufficient damage" determination from FEMA. A Mississippi couple who received such a finding after Hurricane Katrina in 2005 posted before-and-after pictures of their two-story home, showing nothing left but foundation posts. A Slidell, La., Katrina victim posted an appeal to her "insufficient damage" finding, asking what kind of damage would be "sufficient," given that the house was gutted by an 8-foot-high storm surge and all possessions were lost.

In Texas, a lawsuit alleges FEMA improperly denied thousands of poor farm workers money to repair their homes after Hurricane Dolly in 2008 based on the insufficient damage finding. In the Texas cases, 38,000 families applied for assistance and 22,000 applications were denied. The lawsuit, still pending in a federal court in Brownsville, Texas, said "FEMA's only written explanation was a form stating that each ineligibility determination was due to 'insufficient damage.' " Seeking further explanation, the group of Rio Grande Valley homeowners represented in the suit learned that the reason behind more than 10,000 "insufficient damage" denials was a concept used by FEMA called "deferred maintenance," the suit states.

Deferred maintenance is not referenced in any regulation nor is it a publicly available standard, according to Jerry Wesevich, an attorney with Texas Rio Grande Legal Aid who represents the plaintiffs. Deferred maintenance is a "shorthand term that FEMA uses when it determines somehow that a condition of a home prior to the disaster caused the damage after the storm," Wesevich said. "I'm not sure how that works, and we have a right to find out.

"They never write down 'deferred maintenance.' But their excuse is, it's in the inspector's judgment that if the house was a piece of (junk) beforehand, they'll deny it. But they won't tell the public what it is based on."

Calls to the U.S. Department of Justice lawyer representing FEMA were not returned.

In Alabama, Arthur, the inspectors' coordinator, said inspectors no longer use deferred maintenance in assessing damage. There is a place for inspectors to note "preexisting" conditions, he said, but they have no impact on the bottom-line dollar assessment.

"It's simple, really. Your house was either damaged by the storm or it wasn't," Arthur said.

Pricing by computer

After a victim applies for a FEMA grant, an inspector is dispatched to the applicant's property. At its peak after April 27, FEMA deployed 523 inspectors in Alabama conducting 5,000 inspections per day -- an average of nearly 10 per inspector, Arthur said.

The inspectors use laptop-sized computers that are tied to a computer database called NEMIS (National Emergency Management Information System).

One of the first steps inspectors undertake, guided by a program, is to "build the house," measuring rooms and entering the data. The inspectors then assess damage, again guided by the program. For example, they choose from a drop-down menu under a category for "kitchen appliances" and label particular appliances as "unaffected," "repair" or "replace."

Based on the inspector's choices, the computer interacts with NEMIS, which can price each item based on the going price for that item in the particular geographic region.

Shingles, for example, are more expensive in the North, Arthur said, and the computer accounts for that as it builds its report. A full inspection takes 45 to 80 minutes depending on damage, he said.

The information from the report then is turned into letters telling an applicant whether he qualifies for FEMA assistance, based on what is known at the time.

Inspectors are private subcontractors. Many of them come from the construction industry or the house inspection business, Arthur said, but these are not necessarily requirements. FEMA is near the end of a 4 1/2- year, $750 million contract with Partnership for Response & Recovery of Fairfax, Va., which pays inspectors $57.50 per house inspection, according to its website. Those wanting to be an inspector fill out an online application, submit to a background check, and take a "mock inspection class for hands-on training."

Critics claim that the volume and speed of the inspections and the possibility of an inspector with little or no experience leave room for mistakes -- mistakes that might lead to giving aid to people who don't deserve it and none to victims who do.

But FEMA officials point to the millions of dollars quickly dispatched to victims who are often in desperate situations.

In some ways, FEMA officials are in a no-win situation, said Claire B. Rubin, a disaster researcher and consultant in the Washington, D.C., area. The agency gets criticized when applicants receive rejections due to insufficient damage or other reasons. On the other hand, FEMA was blistered by the General Accounting Office and the media for wasting millions after the 2004 Florida hurricanes and Hurricane Katrina for overpaying on contracts and awarding grants to unqualified individuals.

"In Katrina they lost so much money because they were not careful about payout," Rubin said. "The GAO hit them hard."

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