U.S. Senator Charles E. Schumer (D-N.Y.) has asked the Federal EmergencyManagement Agency (FEMA) not to clawback millions in federalSuperstorm Sandy funds given to Long Island'sTown of North Hempstead and Long Beach School District.

Reports from the Department of Homeland Security's Office of InspectorGeneral (OIG) recommended that these funds be disallowed. Thestorm struck the East Coast on Oct. 28, 2012.

“Sandy funds we helped deliver to hard-hit communities likeNorth Hempstead and Long Beach need to stay on Long Island,” saidSenator Schumer. “These communities worked in good faith to recoverquickly after Superstorm Sandy, and that's why I am publicly urgingFEMA not to clawback these funds. Whether it was removing dangerousdebris, making immediate repairs, or performing work at localschools, these federal funds helped make a difference in the livesof Long Islanders, and to claw them back — at the expense of localtaxpayers — could be an unwarranted punch to the gut for all ofLong Island.”

'Deeply flawed audit report'

“We thank Senator Schumer for urging FEMA to not claw back thefederal disaster funds that enabled the town to work quickly toremove debris and make streets and roadways passable followingSuperstorm Sandy. We believe the OIG's audit report to be deeplyflawed and that FEMA will recognize that the town followed thenecessary procedures, complied with contract rules, and served ascareful custodians of the federal disaster relief funds,” said JudiBosworth, North Hempstead Town Supervisor.

Superintendent of Schools David Weiss said, “The Long BeachPublic School District is grateful to U.S. Senator Chuck Schumerfor his advocacy on behalf of the district. Time and time again,Senator Schumer has supported our recovery efforts. His tirelessfight to secure full funding through the federal government isgratefully appreciated.”

After Superstorm Sandy, FEMA provided millions of dollars inpublic assistance grants — much of which has been spent but somethat remains to be spent — to the Town of North Hempstead and theLong Beach School District on Long Island for debris removalefforts, repairs, and other emergency work as a result of thestorm. As part of its obligation to reduce fraud and waste, the OIGrecently released reports that deemed $9.9 million in approvedfunds for the Town of North Hempstead ineligible, unsupported orunused and $668,430 in federal funds previously approved for theLong Beach School District ineligible.

'Unfair burden'

Senator Schumer said that local taxpayers should not be forcedto bear the burden of costs that, according to the New York StateDepartment of Homeland Security and Emergency Services (DHSES),previously were deemed reasonable by FEMA. Unless blatant fraudwere to be uncovered, Senator Schumer said that these funds shouldnot be recouped.

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Senator Schumer added, “To tell the locals 'you were right inhow you spent this money,' and now, to say, 'maybe you're wrong' isan unfair burden these communities — and taxpayers — should notbear.”

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OIG auditresults

The OIG audited $36.6 million in public assistance grantsawarded to the Town of North Hempstead as a result of SuperstormSandy. In its report, the OIG recommended that FEMA disallow $9.9million in funds. However, only about $5.5 million in funds is atrisk of being clawed back, because, according to DHSES, the rest ofthe $9.9 million never was actually disbursed to the town.

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

According to DHSES, FEMA determined these costs to bereasonable. Moreover, the OIG recommended that FEMA disallow $3.2million in duplicate costs for debris removal; the duplicate costswere found and corrected during FEMA's standard reconciliationprocess and, according to Senator Schumer, this recommendationtherefore was unnecessary.

Inadequate documentation alleged

The OIG also claimed that North Hempstead had not providedadequate documentation to support $562,387 in costs. SenatorSchumer said that the documentation provided contained a level ofdetail that DHSES described as routinely accepted by FEMA.

Finally, the OIG recommended that $405,158 for costs related towind damage be disallowed as a duplication of benefits that wascovered by the town's insurance; the OIG also recommended that$791,175 in costs be disallowed because the town came in underbudget on a project.

Senator Schumer said that, instead of commending North Hempsteadfor completing work under budget, the OIG said these funds shouldbe disallowed. In his view, both of those recommendations wereunnecessary because the town and DHSES both agreed on the insuranceproceeds and the unneeded funds, but noted that those projects havenot gone through final reconciliation and close out, where thesecorrections ordinarily would be made.

The OIG also audited $35.5 million in public assistance grantsfor the Long Beach School District. The OIG report stated that LongBeach had not followed federal procurement standards for certaincontract costs and recommended that FEMA disallow $668,430 in whatit deemed ineligible contract costs because Long Beach used costplus percentage of cost contracts.

Senator Schumer acknowledged that FEMA guidance indicates thatthe use of such contracts may result in FEMA limiting the grant toan amount deemed to be reasonable based on the work performed;however, according to the school district, the total costs weredeemed reasonable by FEMA.

Sentator Schumer's letter to FEMA is available on the senator's website.

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