Tonawanda News

May 24, 2013

FEMA revises first October storm audit

By Eric DuVall
The Tonawanda News

Tonawanda News — Erie County officials are swinging back at a revised audit by the inspector general of the Department of Homeland Security, which says county officials misspent some $48 million in Federal Emergency Management Agency grants earmarked for cleaning up after the 2006 October storm.

A revised version of the audit, the first version of which initially released in March, was put out Thursday. As was the case in the first draft, the audit recommends the Department of Homeland Security, which oversees FEMA, seek to recoup $48 million from the county. 

FEMA officials will decide sometime in the next month whether or not to follow through on the audit’s findings.

Deputy Erie County Executive Richard Tobe said if FEMA does try to get the money back they’ll have a fight on their hands.

“Should things go badly, we’re not paying,” Tobe said. “We’ll go to court and if it has to, the judges will decide. But I don’t think we’ll get there.”

County Executive Mark Poloncarz released a statement in the wake of the revised audit, noting the central issue in the first draft — that county officials at the time gave preference to local firms and didn’t make provisions for contractors outside the region to bid on the storm clean up work — wasn’t even mentioned in the audit’s second draft. Of the $48 million in question, auditors said $39.4 million should be recouped because of a bidding process that “limited competition and disregarded federal contracting regulations.”

That allegation isn’t mentioned in the audit’s second draft.

“(The revised audit) repudiated its major findings and created multiple new and previously unstated reasons and alleged factors in continuing to demand that the County repay FEMA $39.4 million,” Poloncarz said.

In the county’s response to the first audit, Tobe pointed out the federal law cited by auditors had changed — coincidentally enough just days before the storm took place. President George W. Bush had signed a new federal law that reversed FEMA policy on disaster response spending. Federal law now explicitly instructs FEMA grant recipients to spend the money locally when possible as a means to jumpstart the local economy following a major disaster rather than cast a wider net in hopes of reducing costs.

“It changed 180 degrees,” Tobe said. “In the past it said you can’t give a local preference. It switched. Congress changed its mind and not only can there be a local preference, there should be. It helps rebuild the economy rapidly to keep the money in the community.”

Tobe noted that complaint by auditors was also dropped from the second draft — and no mention was made of the county’s response, which Tobe said is a breach in professional standards for auditors of any stripe.

He called the audit a “casual process” and “frustrating” due to the lack of communication between county officials attempting to respond to auditors’ requests.

That, he said, was the central issue in the remaining $9 million the FEMA audit calls into question. In both versions, auditors contend Erie County was unable to produce paperwork justifying $9 million in FEMA response money — that, in effect, county officials lost the receipts for part of the work after the storm.

Not so, says Tobe. 

He said among the thousands of pages of information turned over to federal officials, county workers inadvertently provided some incorrect paperwork to auditors — but he insisted the correct documentation exists. Auditors, though, weren’t interested in giving the county a chance to set the record straight.

“We’ve ... told them we do have the records and can obtain them and produce them if they want,” he said. 

Generally, he said auditors would submit a draft of their findings to the county and officials here would have a chance to respond and provide what paperwork was missing. That was never the case, Tobe said.

“We would receive (the draft audit) and … (say) ‘sorry we gave you the wrong stuff. Here’s the right stuff’ … and there would be a little bit of back and forth. None of that happened … and they’ve denied us the right to correct it. We were pretty upset with that,” Tobe said.

Tobe said the most frustrating part of the situation is county officials at the time were acting on advice from high-ranking FEMA officials who were in Western New York to help guide local leaders on how to proceed within federal guidelines. (Tobe was not working for the county in 2006 but was with the City of Buffalo, which was the subject of a nearly identical audit two years ago and successfully convinced FEMA not to recoup the money.)

The “fairness” issue, as the county put it in its official response, is central to Erie County’s response.

“(They’re saying) Erie County should not have listened to those FEMA representatives and should have done something different,” Tobe said. “What they’re telling us and every other community that has an event is when the FEMA representatives come in, don’t trust them and you’ll have a better chance of getting paid. It’s preposterous.

“Somehow Erie County would have needed to be more knowledgable of FEMA regulations than the FEMA staff itself. It’s an untenable position.”

Rep. Brian Higgins, D-Buffalo, who along with other members of the region’s congressional delegation criticized the audit, said FEMA representatives “knew or should have known” what the federal laws were. In a letter to the DHS inspector general in February, Higgins chastised auditors.

“From all appearances it seems that the auditors were either unfamiliar with the applicable (federal law) or they disregarded it,” Higgins wrote. “Whatever the case, the shortcomings on the part of the auditors ... must be addressed.”

Tobe expressed confidence FEMA officials would decide, as they did following the audit of Buffalo’s expenditures, not to recoup the money.

The region’s congressional delegation and state disaster officials are “primed to help” lobby FEMA officials on the issue, Tobe said.

“We have a lot of confidence FEMA will see this on the merits,” Tobe said. “As my mother used to say, a little help doesn’t hurt.”