NYS Superstorm Sandy study cites need for improved disaster recovery process

ALBANY — An audit by the state comptroller found some “significant weaknesses” in the way the state oversaw the spending of federal aid to help repair homes and to redevelop land ravaged by severe storms Sandy, Lee and Irene more than a decade ago.

Comptroller Thomas DiNapoli on Thursday called for fixes to improve the accountability and effectiveness of spending billions of dollars in public money to make coastal areas in particular more resilient before the next devastating storms.

The audit didn’t identify any specific fraud, abuse or problem that resulted from the procedural weaknesses, but auditors said the way the state administered the disaster recovery programs raised the risk of having those problems.

The state spent $4.5 billion in federal funds to help pay for repairs and recovery for eligible property owners, and to buy and redevelop some severely damaged property that could be used for affordable housing. The funding was also used to help better gird New York against future severe storms.

The audit examined state actions during and after Hurricane Irene in August 2011, Tropical Storm Lee a month later, and Superstorm Sandy, which hit Long Island hard in October 2012.

“Our auditors identified gaps in oversight of the programs,” DiNapoli said Thursday. “Homes and Community Renewal needs to make sure that money only goes to eligible properties and there are no inappropriate or duplicate payments going out. It also must better monitor projects to track delays so it can minimize having to take back funds. These issues must be fixed so we’re better prepared to manage future recovery efforts.”

The vast majority of the federal funding was directed primarily for use during and after Sandy. 

Among the audit's findings:

• “There were indications” that two of 11 properties acquired by the state at a cost of $189,540 “may not have been eligible for funding.”
• $60,288 in potentially duplicated payments were made to New Yorkers among the sampled cases, and there was a $6,000 overpayment to one applicant for recovery aid.
• Six of 11 properties acquired by the state were undeveloped or completed late by the time the audit was underway this year.

"Together, these weaknesses increase the likelihood of funds not being used for disaster recovery program purposes and may represent a financial loss to the state and reduced opportunity for funding for other potential applicants,” the audit said.

DiNapoli’s audit of the Homes and Community Renewal agency, which administers programs for disaster recovery, looked at 41 cases to track the use of public money to recover from sea surge, flooding, hurricane winds, long power outages and other assaults of the storms.

The Homes and Community Renewal agency defended its handling of the programs to “rapidly deploy funds for the critical repair, reconstruction, or acquisition for redevelopment or conversion to open space of damaged homes across disaster-declared regions of New York state.”

The agency said most of the concerns in the audit were addressed last year, many of them before the agency was presented with a draft of the audit in the summer and improvements continue.

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.