Management of FEMA Public Assistance Grant Funds Awarded to the Sewerage and Water Board of New Orleans Related to Hurricanes Katrina, Isaac, and Gustav

Cotton & Company concluded that the Sewage and Water Board (Board) lacked an adequate accounting system and did not spend grant funds in compliance with applicable Federal laws and regulations as well as FEMA guidelines. We made 12 recommendations, that when implemented, should help strengthen program management, performance, and oversight. For example, we recommended FEMA Region VI ensure the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness require the Board to implement a process to track and conduct periodic financial reporting on its disaster expenditures and revenues; accumulate and maintain actual cost data to support expenditures paid using the administrative allowance and provide documentation to support these expenditures. We also recommended requiring the Board to implement procedures and controls to ensure expenditures agree with underlying accounting records and reconcile to the recorded grant revenue and to its accounting system. FEMA concurred with all 12 of the recommendations.