FEMA Should Recover $3.4 Million of the $3.5 Million Awarded to Hope Academy for Hurricane Katrina Damages [open pdf - 3MB]
"FEMA failed to properly validate Hope's eligibility for Federal disaster funds estimated at $3.5 million. This occurred because FEMA lacks adequate policies and guidelines to prohibit officials of an unaccredited and unlicensed nonpublic school from applying for and receiving Federal funds. Hope contends that, at the time of the disaster, it served approximately 90 students in grades K--12 in a 5,770 squarefoot building also used as a church. FEMA relied on this information in determining the size of the new facility, site work and ancillaries, and acreage that Hope needed to replace its damaged facility. However, Hope failed to provide documentation sufficient to support the number of students and grade levels it serviced. In addition, we found that--  Hope failed to follow Federal procurement regulations when awarding $1.8 million in contracts for land acquisition, project management, and architectural and engineering services;  Hope allowed its Board president to enter into an unethical related-party transaction with his personal company for land acquisition costing $1.5 million; and  Hope officials allege that they lost all of their records in the storm and could not recall the names of most students; however, they did recall a 15-page list of contents the storm destroyed. They asked FEMA to pay $792,972 for the damaged contents even though they maintained insurance to cover only $17,200 in contents. Hope could not provide adequate documentation to support the number of students and grade levels it serviced or its claim for lost contents. Therefore, we question $3.4 million of the $3.5 million grant award."
Department of Homeland Security, Office of Inspector General, Report No. OIG-16-135-D
US Department of Homeland Security, Office of the Inspector General: https://www.oig.dhs.gov/