The Federal Emergency Management Agency (FEMA) did not properly review the Port of Authority of New York and New Jersey’s (Port Authority) request for Public Assistance funds for damages the Holland Tunnel sustained from Hurricane Sandy, says a new DHS Inspector General Report.
According to the report, FEMA did not follow Federal regulations or its own guidelines for reviewing cost estimates and documenting its determinations. FEMA Region II personnel could not provide documentation to justify changes made to the cost estimates or prove they reviewed the cost estimates adequately, resulting in a lack of assurance the costs obligated are accurate and reasonable.
This occurred, the report says, because FEMA Region II personnel conveyed the accuracy of estimates was not important since actual costs are determined at project completion, even though this project could take many years to complete. Additionally, FEMA Region II Recovery branch management did not ensure personnel adhered to policies and procedures required when reviewing costs.
As a result, says the report, FEMA lacks assurance the costs obligated are accurate and reasonable. DHS recommends that FEMA should deobligate $123 million of ineligible costs, and implement procedures to ensure its personnel follow Federal regulations and FEMA guidelines when reviewing Public Assistance grant requests. FEMA should also implement training to emphasize the importance of proper and appropriate obligation of Public Assistance funds, it notes.