Auditor Says La. Road Home Grants Handled Inconsistently

Computation errors and questionable data shortchanged some homeowners receiving Road Home grants while overcompensating others in the cash-strapped hurricane recovery program, according to a review by the Louisiana Legislative Auditor’s office.

The audit released by Legislative Auditor Steve Theriot described award calculations that were made using information whose reliability and accuracy were questioned. The review detailed discrepancies in damage estimates, conflicts in insurance information, incorrect penalties assessed and incorrect grants.

The Road Home provides grants of up to $150,000 to homeowners with severe damage from hurricanes Katrina and Rita. The program has been plagued with complaints about inaccuracies in grant calculations and the slow pace of aid delivery.

The governor’s Office of Community Development, which hired private contractor ICF International Inc. to run the Road Home and oversees ICF’s performance, disagreed with many of the audit’s findings, saying Theriot’s office didn’t understand some of the program designs.

Both OCD and ICF cited the need for speed in handing out the grants, with an ICF official saying the state and the contractor expected some inaccurate grants because of the push to get grants out quickly.

The Road Home has handed out more than 50,500 grants totaling $3.5 billion so far. More than 184,000 people have applied for aid, and the program is estimated to be billions of dollars short of what it needs to aid all eligible homeowners.

The auditor’s office looked at a random sample of 80 Road Home awards totaling $5.4 million from 10,372 grants awarded through mid-May.

Thirty of the grant amounts – or 37 percent of those grants reviewed – were incorrect, the audit says. The Road Home paid 19 of those homeowners $166,871 more than they should have received and shortchanged 11 homeowners by $29,103, the audit says. One homeowner was underpaid more than $13,000, and one was overpaid more than $50,000, according to the audit.

“Based on our sample results, we estimate that 2,463 applicants may have been awarded more than they should have received and 1,426 applicants may have been awarded less than they should have received,” the audit says of grants through mid-May.

Suzie Elkins, executive director of the Office of Community Development, disagreed with the audit’s assessments of the underpayments and overpayments. The community development office had asked the legislative auditor’s office to look at the grant closings.

In her response to the audit, Elkins said a review of the auditor’s sample group by OCD and ICF found five homeowners were overpaid and three were underpaid – or about 10 percent of homeowners received inaccurate grant amounts, rather than 37 percent.

ICF said overpayments and underpayments were most likely caused by trying to quickly make programmatic changes sought by the state, noting that 99 “important changes” have been made to the homeowner aid program since it began, many of which impact the grant closings.

“Such overpayments and underpayments are to be expected and their occurrence does not imply that we performed at an inappropriate standard of care,” John Thornton, administrative officer with ICF, wrote in a response to the audit.

He said ICF agrees with the state’s mandate that it is better for homeowners to receive money faster, “than to delay all homeowners their funds simply to avoid initial mistakes for some.”

Thornton said overpayments were expected to be recovered through the program’s “post-closing” review process. He said the largest overpayment was one grant of $50,000 that was based on incorrect information from an applicant, who said he will return the grant.

He also said ICF has taken steps to improve data checking before grants are awarded.

Topics Louisiana Homeowners