FEMA Should Disallow $2.04 Billion Approved for New Orleans Infrastructure Repairs

FEMA should not have awarded the City and S&W Board the initial $785 million, or the additional $1.25 billion to complete the repairs to damaged infrastructure, because the damages were not eligible for Federal disaster assistance funding. Even though FEMA attributed the damages to the water distribution system directly to Hurricanes Katrina and Rita in 2005, we concluded that FEMA did not have sufficient documentation to support its decision. In fact, evidence shows that the infrastructure was old and in poor condition even before the hurricanes.Eligibility for FEMA funding requires that damages be the direct result of the declared disaster, and it is the applicant’s responsibility to show that the damages are disaster-related.FEMA should disallow $2.04 billion—the initial award of $785 million, plus the additional $1.25 billion award.