The state of Louisiana should review $290 million in federal Hurricane Katrina recovery aid awarded to Tulane University in light of an audit that found $13 million in questionable costs on one $36 million project, the inspector general for the U.S. Department of Homeland Security said Wednesday.
“The small percentage of Tulane’s massive aid package we examined in this audit identified an extraordinarily high level of questionable costs,” Inspector General John Roth said in a news release.
Tulane disagreed in a statement Wednesday afternoon. The university said it had worked closely with the Federal Emergency Management Agency to quickly repair buildings to prevent further damage and reopen the campus after the storm. The statement said the inspector general’s audits began six years after the 2005 storm.
“Following this unprecedented natural disaster, Tulane worked collaboratively with FEMA throughout the massive effort to repair its campuses, including 80 damaged buildings,” said the emailed response from spokesman Michael Strecker. “The university worked diligently to secure contracts that were able to meet the aggressive schedule and to do so at fair and reasonable prices. FEMA previously reviewed the principal contract issued by the university and determined that the charges under that agreement were fair and reasonable.”
Katrina hit on Aug. 29, 2005. Levee breaches led to catastrophic flooding in much of the city and knocked out utility services for weeks. Tulane escaped the worst of the flooding but sustained serious property damage and suspended its fall classes, reopening the following January.
The Oct. 8 audit focused on nearly $26 million spent for temporary power, dehumidification and cooling services and more than $10 million for employee support services. It said FEMA should disallow nearly $13 million of the aid.
“The contractor could not show that it actually incurred the costs that it billed Tulane; Tulane did not ensure that its contractor’s billings were valid, eligible and supported; and Louisiana, as the grantee, did not effectively execute its responsibilities to ensure compliance with federal regulations and FEMA guidelines,” the report said.
The report said there were nearly $7 million in undocumented fuel, equipment and labor costs and another $3.8 million in equipment billings it said were too high. It also cited more than $1 million in volume discounts the university should have received, which would have reduced costs. It did not identify any contractor or subcontractor.
Asked for the identity of the contractor or contractors involved and whether any litigation was involved, Strecker said the university would have nothing to add to its statement.
The audit said the findings on the $36 million in spending had been discussed with FEMA, Tulane and state officials in January. “FEMA officials generally agreed with our findings and recommendations subject to further review and clarification. Tulane officials generally disagreed with our findings but needed to review the questioned costs further. Louisiana officials did not offer any comments,” the audit said.
FEMA’s regional office in Denton, Texas, said a response to the audit would be filed within 90 days. The Governor’s Office did not immediately respond to an emailed request for comment.