Report on Katrina spending does not inspire confidence

The U.S. agency charged with the recovery of New Orleans and parts of the Gulf Coast devastated by Hurricane Katrina more than a year ago has wasted more than 1 billion on fraudulent or unjustified claims. And to date, the Federal Emergency Management Agency has recovered less than 1 percent of the amount.
That's just one of the blockbuster findings of a report by the Government Accountability Office that has taken Congress by storm -- literally.
"The American people are generous and willingly open their hearts and their wallets to the victims of disasters," said Sen. Susan Collins, R-Maine, who demanded the GAO study. "But they expect their tax dollars will be spent carefully to help storm victims, not be lost to a hurricane of waste, fraud and abuse."
Examples of waste
How egregious was FEMA's mismanagement? Consider this: The agency did not dispute the claims of about 7,000 people who said their property was damaged by Hurricane Katrina and then by Hurricane Rita. The agency paid out nearly 20 million to those individuals.
Or this: Rental aid was given to more than 8,000 victims who were already living in trailers provided by FEMA.
In another "Say what?" moment, the agency made payments of more than 3 million to 500 foreign exchange students -- even though some of the students let FEMA know of their status.
What went wrong? Gregory Kutz, an investigator with the GAO, said that FEMA's approach after Hurricane Katrina was to shoot money out the door and then deal with trying to recover improper expenditures later.
Kutz told the Associated Press that FEMA failed to put in place adequate controls to prevent "substantial fraudulent and improper payments" and he revealed that the 1 billion figure may be on the low side.
So, how did FEMA respond? Here's part of the statement it released:
"Following Hurricane Katrina, FEMA acknowledged weaknesses in the processes and systems that resulted in ineligible individuals receiving assistance. Although FEMA has not had an opportunity to review GAO's latest report, FEMA continues to focus our rebuilding efforts to greatly improve our reliability, accuracy and response in providing aid to disaster victims."
A question worth asking
All well and good, but here's a question for agency higher-ups: When will you recover a substantial amount of the 1 billion-plus that was squandered?
It's a question that the Democratic-led Congress must pursue next year.
Collins, a Republican, is to be commended for turning the spotlight on this waste of taxpayer dollars. Her Democratic colleagues should take up the mantle of congressional oversight into the activities of one of the most important agencies in the federal government.
The problem just isn't that individuals who were not eligible for assistance received federal dollars, but that legitimate victims were deprived of aid because of FEMA's incompetence.
"I hope FEMA has learned the costly lesson," Kutz said.
The American people have the same hope -- but only time and another major disaster will tell.