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First Audits on Hurricane Sandy Funding Are Issued
The Department of Homeland Security (DHS) Inspector General (IG) has issued audits determining if the Federal Emergency and Management Agency (FEMA) Hurricane Sandy funds were accounted for and expended according to federal regulations and FEMA guidelines. The audits looked at debris removal contracts, public assistance grants, and FEMA’s initial responses in New Jersey and New York.

Little Egg Harbor Township, NJ The audit found that while the Township complied with federal procurement regulations for contracts, there were $689,138 in costs without adequate documentation or not eligible for the Public Assistance grant funds for debris removal activities (Image above is Debris at a Temporary Staging site. Source: Little Egg Harbor Township Department of Public Works).  FEMA should disallow those costs unless the Township provides adequate documentation.
 
Borough of Beach Haven, New Jersey – The IG reviewed a $4.85 million award for debris removal in the borough and found that the Borough accounted for FEMA funds on a project-by-project basis as Federal regulations and FEMA guidelines require. Additionally, the Borough complied with applicable Federal procurement regulations for the debris removal contracts.  However, the IG identified the following:
  • $3,688,066 of funding that FEMA can put to better use because the Borough no longer needs it to complete work under the project;
  • $651,592 of cash advanced under the project that the Borough can return to the state because final project costs are less than the amount advanced; and.
  • $344,319 of debris removal costs that the Borough plans to claim under the FEMA award that were either (1) not supported by adequate documentation or (2) not eligible under the Public Assistance program. FEMA should disallow the $344,319 if the Borough claims the costs, unless the Borough provides FEMA with adequate supporting documentation for the costs, or provides additional documentation to show that the costs are eligible.
Village of Saltaire, New York – Results of the IG’s audit found that the village’s policies, procedures, and business practices were adequate to account for and expend FEMA grant funds according to federal regulations and FEMA guidelines. Saltaire accounted for costs on a project‐by‐project basis, used full and open competition in awarding $3.49 million in contracts, and took affirmative steps to solicit small, minority, and women‐owned firms.

New Jersey Debris Removal – The audit found that New Jersey complied with applicable federal and state procurement standards for the emergency contracts for statewide debris removal and monitoring activities related to Hurricane Sandy. 
 
FEMA’s Initial Response in New Jersey – The IG concluded that FEMA provided an effective and efficient response to the damages caused by Hurricane Sandy.  FEMA proactively prepared for Sandy, overcame staffing and operational challenges, overcame staff management issues, used a variety of sourcing mechanisms, and effectively coordinated response activities by working with key state and federal organizations. Seven months after landfall, FEMA had: 
  • Responded to 261,506 people who contacted them for help or information;
  • Completed 126,416 home inspections;
  • Awarded $396 million for Individual Assistance; and
  • Awarded $341.5 million for Public Assistance
FEMA’s Initial Response in New York – The IG concluded that FEMA provided an effective and efficient response to the damages caused by Hurricane Sandy. FEMA proactively prepared for Hurricane Sandy, overcame operational and staffing challenges, overcame resource shortfalls, used a variety of sourcing mechanisms, and effectively coordinated response activities. As of April 2, 2013, FEMA had:
  • Awarded $459 million in mission assignments to 39 federal agencies to support FEMA and the State of New York with resources, such as emergency medical personnel and assistance with debris clearance and power restoration;
  • Registered more than 270,000 Individual Assistance applicants; and
  • Awarded more than $806 million for Public Assistance.
New York Needs to Sign Mission Assignments More Quickly – The audit focused on the Direct Federal Assistance mission assignments because the federal government could incur a financial risk if a state does not provide its cost share for work done during a presidentially declared disaster.  More than two months after Hurricane Sandy, New York had not signed 12 Direct Federal Assistance mission assignments totaling $47 million, exposing FEMA to approximately $11.7 million in potential liability if the state did not accept its financial responsibility for responding to devastation from Hurricane Sandy.  Although New York ultimately signed all mission assignments, the state should have signed the 12 Direct Federal Assistance mission assignments in question much sooner than the 2.5 months it took for New York to accept its responsibility on the 12 mission assignments.