ICYMI: Schumer to FEMA: Don't Take Back Sandy Funds From Long Beach, North Hempstead

Senator Charles E. Schumer held a press conference on Tuesday to ask the Federal Emergency Management Agency to not claw back millions in federal Sandy funds for the Town of North Hempstead and the Long Beach School District, following two Inspector General reports recommending that these funds be disallowed.

“Sandy funds we helped deliver to hard-hit communities like North Hempstead and Long Beach need to stay on Long Island,” said Schumer. “These communities worked in good faith to recover quickly after Superstorm Sandy, and that’s why I am publicly urging FEMA not to clawback these funds. Whether it was removing dangerous debris, making immediate repairs or performing work at local schools, these federal funds helped make a difference in the lives of Long Islanders, and to claw them back — at the expense of local taxpayers — could be an unwarranted punch to the gut for all of Long Island.”

After Hurricane Sandy, FEMA provided millions of dollars in public assistance grants — much of which has been spent, but some remains — to the Town of North Hempstead and Long Beach School District for debris removal efforts, repairs, and other emergency work as a result of the storm. As part of its obligation to reduce fraud and waste, the Department of Homeland Security Office of Inspector General conducts audits to identify improper payments made to municipalities.

The OIG recently released reports that deemed $9.9 million in approved funds for the Town of North Hempstead ineligible, unsupported, or unused and $668,430 in federal funds previously approved for the Long Beach School District ineligible. Schumer said that local taxpayers should not be forced to bear the burden of costs that, according to the New York State Department of Homeland Security and Emergency Services, were previously deemed reasonable by FEMA. Unless blatant fraud is uncovered, Schumer said that these funds should not be recouped.

“To tell the locals ‘you were right in how you spent this money,’ and now, to say, ‘maybe you’re wrong’ is an unfair burden these communities—and taxpayers—should not bear," Schumer said.

The OIG audited $36.6 million in Public Assistance grants awarded to the Town of North Hempstead as a result of Hurricane Sandy. In its report, the OIG recommended that FEMA disallow $9.9 million in funds. However, only about $5.5 million in funds is at risk of being clawed back, because, according to DHSES, the rest of the $9.9 million was never actually disbursed to the town.

First, the OIG said that the town did not follow federal procurement standards in awarding $4.9 million in debris removal contracts. Schumer explained that, following the storm, the town was out of power for approximately 10 days and officials made the decision that immediate debris removal was urgent as a matter of public health and safety.

According to DHSES, FEMA determined these costs to be reasonable. Moreover, the OIG recommended that FEMA disallow $3.2 million in duplicate costs for debris removal; the duplicate costs were found and corrected during FEMA’s standard reconciliation process and therefore, this recommendation was unnecessary. The OIG also claimed that North Hempstead did not provide adequate documentation to support $562,387 in costs, however, the documentation provided contained a level of detail that DHSES described as routinely accepted by FEMA. Finally, the OIG recommends that $405,158 for costs related to wind damage be disallowed as a duplication of benefits that was covered by the town’s insurance; it also recommend that $791,175 in costs be disallowed because the town came in under budget on a project.

The OIG also audited $35.5 million in Public Assistance grants for the Long Beach School District. The OIG report stated that Long Beach did not follow federal procurement standards for certain contract costs and recommended that FEMA disallow $668,430 in what it deemed ineligible contract costs because Long Beach used cost plus percentage of cost contracts. FEMA guidance indicates that the use of such contracts may result in FEMA limiting the grant to an amount deemed to be reasonable based on the work performed; however, according to the school district, the total costs were deemed reasonable by FEMA.

Photo: Senator Schumer's Office.