Auditors question $180M of nearly $1B in state program costs

(The Center Square) – The Louisiana auditor says more than $180 million is questionable costs from about $1 billion that flowed through the Governor’s Office of Homeland Security and Emergency Preparedness for the first half of 2023.

A September report from Legislative Auditor Mike Waguespack evaluated documentation submitted by sub-grantees and contractors for more than $962.7 million in reimbursements through the Public Assistance Program from Jan. 1 through June 30.

The total includes 3,232 reimbursement requests, with noted exceptions for about 19%.

“As a result of applying our procedures, we found exceptions, which exceeded $500 per reimbursement request, totaling $181,006,792 in 636 reimbursement requests,” auditors wrote.

The funds come from the Federal Emergency Management Agency Public Assistance Grant Program for state and local governments and certain nonprofits to respond to and recover from major disasters or emergencies.

The money covers things like debris removal, emergency protective measures, and permanent restoration of infrastructure, with the federal share of the spending typically exceeding 75% of eligible costs.

The Governor’s Office of Homeland Security and Emergency Preparedness coordinates the spending as the federal grantee, and local governments and nonprofits submit requests for reimbursement and supporting documentation to recover costs.

A breakdown of the exceptions by work type show 470, or about 17%, totaling $161.3 million stemmed from contract work. Other exceptions and questionable costs include:

• Materials, 71, about $11.5 million.

• Labor, 57, $5.1 million.

• Rented equipment, eight, $2.3 million.

• Equipment, 30, $734,318.

The report indicated what evidence did not square up. Those findings were:

• Lack of supporting documents, 433, $95 million.

• Procurement guidelines not followed, 116, $72.4 million.

• Out of scope or exceeded cost estimate, 38, $8.86 million.

• Ineligible costs, 95, $3.56 million.

• Requests duplicated, omitted or miscategorized, 26, $1 million.

Lynne Browning, assistant deputy director of public assistance for the Governor’s Office of Homeland Security and Emergency Preparedness, referred a request for comment from The Center Square to a communications person. At time of publication, that request was unsuccessful.

In a letter to Waguespack on Sept. 18, Browning concurred with exceptions identified in the report and explained the methods the department uses to address the questioned costs. Browning wrote the department leverages the report to improve training and education for staff, and “findings on contract costs have increased due to a recent process change requiring all Federal contract clauses for reimbursement of those costs.”

“We would also like to note that our review process necessitates that any exceptions identified within your report are required to be addressed before project closeout,” Browning wrote. “GOHSEP has made considerable progress in addressing all historical questioned costs, with 85% of all previously questioned costs being resolved life to date and $131 million resolved during this same reporting period.”