Audit Reveals Work Still Needed to Track Louisiana Hurricane Aid

Louisiana has a long way to go to make sure that more than a billion dollars in housing aid has been used properly by the thousands of people who got federal help from the catastrophic 2005 hurricane season, according to a new state audit issued Monday.

The funds were allocated to people rebuilding homes, to landlords fixing up their rentals and to folks elevating their homes out of flood plains. Louisiana received about $9.5 billion in federal aid under the Road Home program to rebuild from hurricanes Katrina and Rita in 2005.

The Louisiana Legislative Auditor gave the progress report on efforts to keep track of recipients and what they used the money for. The state is responsible for doing this work.

As of last June, the audit found that necessary paperwork was missing from 15,095 homeowners who combined got about $1 billion under the recovery program known as Road Home. The audit urged the state to continue trying to get those homeowners to show they used the money properly or recoup the funds. Among the paperwork needed, homeowners must show that the house they got money for has been rebuilt or replaced and that it is insured.

Even though there is a huge volume of missing paperwork, state officials said that does not mean a lot of people misused the money. The problem has been in getting people to send in the right paperwork, officials said.

As evidence of that, the Louisiana Office of Community Development, the agency handling hurricane aid, estimated that about 94 percent of homeowners who got aid are back in their houses.

“The biggest challenge is getting the documentation back,” said Pat Forbes, the agency’s executive director. He said the high number of rebuilt homes demonstrates that the program was “hugely successful” and did what it was intended to do – restore hurricane-battered Louisiana.

He added, though, that there are people who did not spend their funds properly and they will be required to repay the money. The agency said it has flagged many cases and sent those onto federal investigators at the U.S. Department of Housing and Urban Development, the federal agency overseeing the hurricane aid.

Aid recipients faced hurdles in complying with the program because of the poor way it was managed, said Melanie Ehrlich, founder of the Citizens’ Road Home Action Team, a citizens group that monitored the rebuilding program.

“It was repetitive,” she said. “They asked for the same documentation over and over again.”

The Legislative Auditor report also analyzed another pot of money – $649 million in loans given to landlords to fix rental properties. Of that amount, the audit found that 1,108 loans valued at about $89.5 million are not in compliance. The audit urged the state to keep after these loan recipients, too.

Finally, the audit looked at money handed out to property owners to help them raise or move their structures to reduce the risk from flooding. The audit found 268 recipients who got $6.3 million are out of compliance with the program. Additionally, the audit said the state is working to recoup about $10.4 million from house-raising contractors for work that it says was not done.

Keeping track of hurricane aid recipients is a massive task. The state said it is looking to hire a contractor or nonprofit to work with Road Home recipients and help them get into compliance.