$700M in Katrina, Rita Aid May Have Been Squandered

24K families given up to $30K each

By Matt Cantor,  Newser Staff

Posted Apr 4, 2013 7:12 AM CDT | Updated Apr 4, 2013 7:54 AM CDT

(Newser) – Officials lack "conclusive evidence" that up to $700 million in federal aid following hurricanes Katrina and Rita was used appropriately, a federal investigation finds. Some of the 24,000 families who received up to $30,000 apiece to elevate their homes used the money for another purpose, while others failed to provide a full report of what they'd done with the cash, says the report, by HUD's inspector general.

HUD officials say Louisiana was responsible for overseeing the appropriate use of the money, the AP reports. Since Katrina, the department has helped put stricter rules on aid distribution for events like Hurricane Sandy, a rep says. Indeed, "as the federal government prepares to spend nearly $16 billion on recovery efforts related to Sandy, this is a mistake taxpayers, and citizens affected by the storm, can't afford to see repeated," says Sen. Tom Coburn. Louisiana is still pushing aid recipients to document their use of the money, and some 5,000 homeowners have complied following the report's assessment.

In this Sept. 2, 2005 file photo, homes are surrounded by floodwaters from Hurricane Katrina.
In this Sept. 2, 2005 file photo, homes are surrounded by floodwaters from Hurricane Katrina.   (AP Photo/David J. Phillip, Pool, File)
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