The federal agency is seeking money back from people nationwide who were affected by 129 different disasters since 2005, including floods, tornadoes, hurricanes and other natural disasters, according to documents obtained by The Associated Press.

"The FEMA representative said that I was one of the first to get the letters, thousands will be getting the letters, going all the way back to Hurricane Katrina," said Lisa DiVito of Chicago, IL, who received $3,400 last July after a flood damaged her home (http://abclocal.go.com/wls/story?se...).

FEMA officials say they may have given out as many as 160,000 grants to ineligible people by mistake, to the tune of more than half a billion dollars.

FEMA accepts fault and said the mistakes occurred because of employees who either misunderstood eligibility rules, approved duplicate assistance for costs that were already covered by insurance or other sources, or made accounting errors. The agency, however, is still obliged to recover the erroneous payments.

The Department of Homeland Security's inspector general criticized the agency last December for failing to recover $643 million in these types of erroneous payments to victims of Hurricane Katrina and other disasters. The report called on FEMA Agency Administrator Craig Fugate to sanction a way to recoup the funds. FEMA then adopted a new process and the letters began going out.

"We are committed to being responsible stewards of taxpayer dollars," said Rachel Racusen, FEMA spokeswoman.

Since 1982, federal law has required the agency to try to recover any mistaken payouts. However, a bill introduced by Sen. Mark Pryor of Arkansas last month would allow FEMA to waive debts in cases where the agency has made mistakes. The Senate committee on homeland security will consider the bill this week.

The FEMA funds ranged from payments as little as a few hundred dollars to some as much as $27,000, and most recipients have already spent whatever they got on repairs. People who receive the letter asking them to repay their award have some options: they may appeal; apply for a hardship waiver that would forgive the debt; or establish a payment plan.

After this spring, which saw devastating tornadoes and floods, the agency's mistakes illustrate the problems associated with accepting federal aid, and after FEMA's colossal mistakes during Hurricane Katrina, some are totally fed up with the agency altogether.

"Hurricane Katrina made them worthless feds in windbreakers, a four-letter agency for which some couldn't find enough four-letter words," said The Associated Press in an article bashing the agency for its failures subsequent to Katrina during the 2008 Hurricane Ike, which made landfall in Galveston, TX (http://www.msnbc.msn.com/id/2676256...).

"They're still screwed up. They haven't remedied their problem," said Galveston nurse Reginald Cleveland, one of thousands of evacuees stuck at a shelter in San Antonio after Ike hit. "I say, put the people out. They obviously don't know what they're doing."

U.S. presidential candidate Ron Paul, who is also the congressman serving Galveston, said that some in his hurricane-prone district do not want FEMA's help.

"I've been very much involved in the hurricanes that have come into my district and most of the people in my district do not like FEMA," Paul told CNN's Wolf Blitzer in May. "There is strong resentment toward the way FEMA operates because they're bureaucrats that don't understand the rule of law nor do they understand local control and property rights (http://cnnpressroom.blogs.cnn.com/2...).

And Paul is ready to get rid of the entire agency, even aside from its incompetence.

"There's a very strong argument that this whole program of government, through coercion and taxation, can bail out everybody when we're flat broke," he said. "Why should we take the money from someone else who doesn't get the chance to live on the gulf and make them pay for my house?"

Sources for this article include:

http://news.yahoo.com/s/ap/20110510...

http://abclocal.go.com/wls/story?se...)

http://www.msnbc.msn.com/id/2676256...