A March 29 report by the Inspector General of the U.S. Department of Housing and Urban Development (HUD) claimed that $700 million of federal funds designated for Louisiana's Road Home Elevation Incentive Program had been misspent or is missing.
Using documents submitted by the state, the report said more than 24,000 homeowners misspent grants of up to $30,000 that were supposed to be used exclusively for home elevation in the wake of Hurricane Katrina and the levee failures.
In December 2005, Congress approved a $29 billion hurricane relief package, with $11.5 billion marked for Community Development Block Grant disaster recovery programs. HUD awarded Louisiana $6.2 billion of that $11.5 billion. The following June, Louisiana also was awarded an additional $4.2 billion. Eligible applicants were awarded up to $30,000 for home elevation, so long as the owner lived at the property during Hurricanes Katrina and Rita and the property was the owner's primary residence within three years of receiving the grant. Recipients were given a lump sum.
In March 2010, HUD's inspector general's office issued a report finding that Louisiana hadn't collected $3.8 million in grant funds from 158 noncompliant grant recipients, and that 158 of 199 sampled grant recipients had not elevated their homes. As of April 2012, only 18 recipients returned grant funds (totaling $200,900), but not necessarily in full. In August 2012, the state reported that more than 24,000 homeowners — who had received nearly $700 million in grants — did not elevate their homes or respond to the state.
Of those approved billions of dollars, HUD reported that only $119.2 million were used successfully to elevate homes.
Among its recommendations, HUD said Louisiana needs to recover more than $400 million that definitely was not used to elevate homes and find out what happened to the homeowners who did not respond to the state. — Alex Woodward