The Federal Emergency Management Agency said it is expecting a refund of $4.2 million after an audit showed that disaster-relief grants given to Hawaiian state officials were spent on nonqualifying road-construction projects.
The state's Department of Design and Construction (DDC) was awarded FEMA grants for damages from severe storms, flooding, landslides and mudslides in early 2006, but a Homeland Security inspector general's report this week concluded that some of the construction and roadwork did not qualify as emergency relief and should not have been approved by federal officials.
The IG probe found that the DDC claimed costs for roadwork and quantities of construction material that were greater than those specified by FEMA. For example, FEMA approved costs and construction for 350 linear feet of concrete curbs at two construction sites, but the DDC charged the government for 1,186 linear feet for four sites.
DDC officials also did not keep records of construction improvements that were not included in the approved FEMA work at each site and charged the federal government for renovations and updates that were not necessary for emergency relief. The DDC acknowledged that project improvements had been made, but contended that they had informed FEMA officials of the changes during the time of construction.
In addition, the DDC did not use a competitive, open-market system to choose contractors for the project, according to the IG's report.
"DDC officials circumvented full and open competition and invited four specific contractors — with whom they were familiar — to bid on roadwork repairs," the IG report stated. Part of the confusion over the disaster-relief program stemmed from the fact that the DDC in Hawaii is not legally responsible for road maintenance and should not have been put in charge of the repairs. The city of Honolulu's Department of Facilities Maintenance is legally responsible for repairing city streets and had maintained the original FEMA-approved sites before the disaster.
"DDC officials concurred that they do not own nor maintain the city's roads. They said that the city provides DDC ... construction contracts on behalf of other city entities. They told us that it is their practice to allow city officials to decide which entity will receive FEMA funding and serve as the applicant," the IG report said.
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