Federal Audit: NJ Didn’t Have Adequate Controls to Administer Sandy Money

NJ Spotlight News | October 4, 2016 | Politics
A HUD audit calls on NJ to further justify expenditures or else pay the money back.

By Brenda Flanagan

“This is four years after Sandy and half the people aren’t even done with their homes yet because of the bureaucracy that’s going on,” said George Kasimos, founder of Stop FEMA Now.

Advocates and victims long blamed bureaucratic bungling for the nightmare of red tape that tripped up homeowners trying to repair and rebuild after Sandy. A favorite target: Hammerman and Gainer Inc., a Louisiana company that New Jersey paid $43 million to take homeowner applications and disburse funds. Now a federal audit’s offering victims some vindication finding “…the state did not have adequate controls in place to administer its contract and monitor contract performance and was not fully aware of federal procurement and cost principle requirements.”

Translation: “It’s a mess! I mean, people should’ve gotten fired and put in jail and no one — no one’s — even gotten reassigned, and it’s shameful,” Kasimos said.

“The state fumbled the ball. The governor fumbled the ball. The state needs to jump in and help those people who got shafted,” said Congressman Bill Pascrell.

Pascrell asked HUD to conduct the audit two years ago, after victims gave a list of complaints about how HGI treated them.

“The costs. No transparency whatsoever. Bills disappearing. There was no real track record and there was no real follow-up on many things that should’ve been followed up. And you’re dealing with people who were the most vulnerable. They’re out of their homes,” Pascrell said.

And politics do seemingly intrude. New Jersey’s Department of Community Affairs chose HGI to handle Sandy aid shortly after HGI’s law firm made a $25,000 donation to the Republican Governors Association, then chaired by Gov. Chris Christie. HGI bid low — $68 million for a three-year contract — but then billed the state $57 million for less than nine months of work. The state paid $43 million and basically fired HGI without public notice.

The audit notes “…HUD did not have assurance that the $43.1 million disbursed under the contract was for costs that were eligible, supported, reasonable and necessary.”

“Just be straight with us. Here’s a governor that’s always said, ‘I’ve been straight with you. I say it like it is!’ Baloney,” Pascrell said.

The governor’s office declined comment, but its rebuttal to the HUD audit blamed “HGI’s sloppy invoicing” for inaccurate records and noted, “…the state is confident that DCA maintained adequate documentation to support all of the funds disbursed, and in fact, to support almost $1.8 million more than the amount disbursed.” The bureaucratic back and forth frustrates people who continue to deal with red tape and regulations.

“There’s people, there’s tens of thousands of people still homeless from Superstorm Sandy, and it’s like the best kept secret. It’s a shame,” said Kasimos.

The audit calls on New Jersey to further justify expenses it deems questionable or pay the money back. New Jersey’s letter suggests that’s probably not going to happen.