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

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

“Sandy funds we helped deliver to hard-hit communities like North Hempstead and Long Beach need to stay on Long Island,” said Senator 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.”

'Deeply flawed audit report'

“We thank Senator Schumer for urging FEMA to not claw back the federal disaster funds that enabled the town to work quickly to remove debris and make streets and roadways passable following Superstorm Sandy. We believe the OIG's audit report to be deeply flawed and that FEMA will recognize that the town followed the necessary procedures, complied with contract rules, and served as careful custodians of the federal disaster relief funds,” said Judi Bosworth, North Hempstead Town Supervisor.

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

After Superstorm Sandy, FEMA provided millions of dollars in public assistance grants — much of which has been spent but some that remains to be spent — to the Town of North Hempstead and the Long Beach School District on Long Island 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 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.

'Unfair burden'

Senator 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 (DHSES), previously were deemed reasonable by FEMA. Unless blatant fraud were to be uncovered, Senator Schumer said that these funds should not be recouped.

Senator Schumer added, “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.”

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OIG audit results

The OIG audited $36.6 million in public assistance grants awarded to the Town of North Hempstead as a result of Superstorm 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 never was actually disbursed to the town.

First, the OIG said that town did not follow federal procurement standards in awarding $4.9 million in debris removal contracts. Senator Schumer explained that, following the storm, the town was out of power for approximately 10 days, and town 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, according to Senator Schumer, this recommendation therefore was unnecessary.

Inadequate documentation alleged

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

Finally, the OIG recommended that $405,158 for costs related to wind damage be disallowed as a duplication of benefits that was covered by the town's insurance; the OIG also recommended that $791,175 in costs be disallowed because the town came in under budget on a project.

Senator Schumer said that, instead of commending North Hempstead for completing work under budget, the OIG said these funds should be disallowed. In his view, both of those recommendations were unnecessary because the town and DHSES both agreed on the insurance proceeds and the unneeded funds, but noted that those projects have not gone through final reconciliation and close out, where these corrections ordinarily would be made.

The OIG also audited $35.5 million in public assistance grants for the Long Beach School District. The OIG report stated that Long Beach had not followed 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.

Senator Schumer acknowledged that 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.

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

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