- The Washington Times - Tuesday, October 31, 2006

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 yesterday.

Aid from the Federal Emergency Management Agency (FEMA) also included rental furniture, but the city “did not maintain adequate documentation for approximately $10 million in furniture deliveries,” the report said.

“This problem occurred because 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 inspected and evacuees moved in,” the report said.

The Government Accountability Office, Department of Homeland Security (DHS) and the Senate Homeland Security and Governmental Affairs Committee have documented more 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 FEMA reform legislation that President 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 — an estimated 400,000 evacuees filled public buildings, convention centers, hotels and stadiums throughout Texas after Katrina, and thousands more sought shelter after Rita 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 funding, in the months following the arrival of hurricane evacuees,” the inspector general’s report said.

“As a result, FEMA has no assurances that the city made housing payments for only qualified evacuees or that the amounts paid were accurate,” the report 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.

FEMA oversaw and approved all of the spending, he said.

“Remember the situation. Essentially overnight the floodgates opened, no pun intended, and the buses arrived overnight — almost an entire city was picked up and put down in another city,” Mr. Michel said. “Somebody had to house these people. FEMA did not have the wherewithal, and nobody else stepped forward.”

“No good deed goes unpunished,” Mr. Michel said of the audit.

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