Where did the money go? Your guess is as good as his, says David Montoya, the Inspector General for the Housing and Urban Development (HUD). "A new report released from the inspector general's office shows that more than 24,000 homeowners who received grants of up to $30,000 to elevate their homes either misspent or pocketed the money," reports ABC News ("Where did all the money go? How $700 million in Katrina relief money went missing," by Jeff Zeleny, Richard Coolidge, and Jordyn Phelps). "Considering there was just under $1 billion earmarked for this particular program and there's $700 million that wasn't used for that, I'd give it a very low D," said Montoya.
The New Orleans Times-Picayune covers the story here ("IG report: 85 percent of homeowners who got elevation grants haven't documented work," by Bruce Alpert). As the Times-Picayune tells it, it's actually not clear at this point whether 24,000 homeowners did or did not elevate their houses: what's known is that they either did not provide requested documentation, or else simply didn't respond at all to the survey. Writes the Times-Picayune: "Of the 28,188 recipients of elevation grants averaging $29,100, only 15 percent had demonstrated that they had used the money for the intended purpose, according to the IG report."
"Since the compliance survey was completed last August, state officials said that 5,454 homeowners who had not been in compliance have met the requirements of the program," reports the Times-Picayune. "In some cases, it was just a matter of providing one more document to their file, according to Angela Vanveckhoven, spokeswoman for the Louisiana Office of Community Development - Disaster Recovery Unit."
And judging by a letter to the HUD IG from Louisiana state official Patrick W. Forbes, P.E., Executive Director of the state's Office of Community Development, Louisiana sees things in a somewhat different light than does the HUD Inspector General. Forbes wrote to HUD on March 27: "Other than these homeowners' not providing documentation to the State to support their compliance, as required in the agreement, many in all likelihood have elevated their home but have not yet provided adequate compliance documentation to the program. OCD/DRU [the Office of Community Development, Disaster Recovery Unit] currently considers these applicants as nonresponsive, not noncompliant." Forbes' letter is attached as a comment to the Inspector General's March 29 memorandum on its program inspection ("Memorandum 2013-IE-0803").
And in Louisiana's view, the grants were not a specific quid pro quo to begin with. Louisiana's Road Home Action Plan, Forbes commented, says that "Elevation compensation up to a maximum of $30,000 may be awarded to compensate a homeowner for the loss of equity caused by the higher flood elevation standards for new construction and rebuilding." Writes Forbes, "The compensation model provides eligible homeowners with a grant for uncompensated property losses to their damaged address rather than tying funding to a specific construction-related activity."
So will Louisiana be looking to get its money back from grantees, as the HUD IG urges? At this point, the answer to that question is not clear.