A new audit released Monday by the Louisiana Legislative
Auditor says the state could be on the hook for hundreds of millions in disaster
relief payback. The money was supposed to help property owners recover from Hurricanes Rita and Katrina.
"The grants come with a covenant," says Legislative Auditor
Daryl Purpura. "Whenever you receive the funds you had to re-occupy, rebuild,
get insurance and prove to the state that you had done these things."
The Legislative Auditor's review of the Office of Community
Development, which oversees the Road Home program, showed potentially huge
paybacks for money obtained illegally.
"An individual has received the funds
and he's not met the covenant, then they owe the state," says Purpura. "But
ultimately the state is the grantee so the federal government is going to be
looking for the state to recover the funds."
Below is the response from OCD Director Patrick Forbes.
"The state takes seriously its
commitment to restore the residential property damaged by hurricanes Katrina
and Rita and seeing that residents who so desire are able to return home.
OCD-DRU also takes seriously its fiduciary responsibility both to the state and
federal taxpayers. We know that a non-compliant applicant represents not only a
family that is not back in their home, but also likely a blighted property in a
neighborhood. While grant recipient compliance is our primary goal, grant
recapture and recovery is also ongoing, and will continue as more applicants
are identified as non-compliant and unable to be assisted through other
"To continue to improve compliance, we
have been in discussions with HUD on modifying Road Home programs to assist
some of these homeowners who have not yet completed their construction, and we
are working aggressively with HUD to ensure that homeowners get in compliance.
We expect these programs to be reviewed by HUD within the next six weeks.
We expect these program modifications to help a number of currently
non-compliant Road Home applicants become compliant, so proceeding with
recovery on these files would be premature at this point.
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