Over $222 million in Katrina funds missing in Houston
Homeland Security’s inspector general says it cannot account for more than $222 million of $252 million in federal disaster aid that Houston received last year to house Gulf Coast evacuees after Hurricanes Katrina and Rita hit.
“Rental payments we reviewed contained errors, and the city paid some charges twice,” according to the audit, which was released on Oct. 31.
AidfromtheFederalEmergency ManagementAgency(FEMA)also included rental furniture, but the city“didnotmaintainadequatedocumentation for approximately $10 million in furniture deliveries,” the report said.
“Thisproblemoccurredbecause the city did not maintain records showing which apartment units received furniture. To facilitate moving evacuees into apartments, the city sometimes delivered furniture before apartment units were inspectedandevacueesmovedin,”the report said.
The Government Accountability Office, Department of Homeland Security and the Senate Homeland Security and Governmental Affairs Committeehavedocumentedmore than $1 billion in waste and fraudulent spending in the whole Katrina-relief effort because of poor internal controls, insufficient verification standards, noncompetitive contracts and other wasteful practices.
Sen. Susan Collins, Maine Republican and chairman of the Senate homeland security committee, said the inspector general’s report will “undoubtedly help Houston or any other jurisdiction in the U.S. be better prepared to deal with additional funds that will be spent to assist Katrina victims, as well as funds that will be spent after future disasters.”
Miss Collins did not say whether she would order new hearings or more investigations but said her FEMAreformlegislationthatPresident Bush recently signed will “ensure that local communities work more closely with FEMA and DHS to be better prepared following a disaster.”
“The nation was ill-prepared to manage the consequences of Hurricane Katrina. When cities such as Houston agreed to provide shelter to thousands of Katrina victims, the federal, state and local governments had inadequate controls in place to monitor how relief funds were spent,” Miss Collins said.
The inspector general’s report said the city properly accounted for shelters and management costs — anestimated400,000evacueesfilled public buildings, convention centers, hotels and stadiums throughout Texas after Katrina, and thousandsmoresoughtshelterafterRita hit three weeks later.
“However, the city did not properly account for its interim housing costs, representing $222.3 million of the $252.6 million in FEMA fund- ing, in the months following the arrival of hurricane evacuees,” the inspector general’s report said.
“As a result, FEMA has no assurancesthatthecitymadehousing payments for only qualified evacuees or that the amounts paid were accurate,” the report said.
Aaron Walker, FEMA spokesman, said city officials “generally agreed with our findings and recommendations” and began accounting for furniture deliveries within the ”initial months” after the disaster, the report said.
City officials attempted to correct the problem by hiring contractors to embark on a massive, 24-hour document recovery and to verify payments, yet it contributed to an increased cost in management estimated at $30 million, or nearly $1,000 per evacuee family, the report said.
Frank Michel, spokesman for Houston Mayor Bill White, said the city could account for the money, just not by the auditing standards the inspector general requires.
“At one point, they wanted us to change how we were documenting costs, and then came back and said the way we were doing it was too costly and so they told us to stop it,” Mr. Michel said.
FEMAoversawandapprovedall of the spending, he said.
“Remember the situation. Essentially overnight the floodgates opened, no pun intended, and the buses arrived overnight — almost anentirecitywaspickedupandput down in another city,” Mr. Michel said. “Somebody had to house these people. FEMA did not have the wherewithal, and nobody else stepped forward.”
“Nogooddeedgoesunpunished,” Mr. Michel said of the audit.
In this file photo, more than two weeks after Hurricane Katrina hit the Gulf Coast, partially submerged vehicles line a residential street in New Orleans, on Sept. 14, 2005.