Katrina Money Wasted?

October 13, 2014 Posted by Jessica Shofler in News, Nonprofits

KatrinaFederal auditors claim that the University of New Orleans Research and Technology Foundation, a nonprofit created to support the University of New Orleans, failed to account for more than $19 million it received from the federal government to repair damage it sustained during Hurricane Katrina.

The Office of the Inspector General at the Department of Homeland Security (DHS), which conducts and supervises independent audits, investigations, and inspections of the programs and operations of DHS, recently issued an audit showing that, almost 9 years after Hurricane Katrina, the Foundation has still only accounted for $5.3 million of the money it received from FEMA. The audit alleges that the Foundation did not follow federal contracting guidelines on holding open and free competitions for repair project bids and allotting funds to small companies and those owned by women and minorities. The audit also notes that the Foundation failed to secure FEMA’s permission for $7 million of over budget spending.

The Foundation argues that noncompliance primarily occurred because it was emergency work and they needed to reopen the buildings as quickly as possible. But the auditors refute this claim, stating that exigent circumstances do not negate the necessity to follow federal contracting guidelines even if it is difficult to do so.

The audit also notes the lax oversight from FEMA and Louisiana emergency management officials, stating “[i]t is Louisiana’s responsibility to do whatever is necessary to get these projects closed.”

Unfortunately the Foundation failed to heed the lesson of The American Red Cross, which has periodically been accused of mishandling donations by diverting funds raised for one purpose to an altogether different purpose.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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