New York City Superstorm Sandy Study Shows Need for Improved Disaster Recovery Process

ALBANY — An audit by the state comptroller found some “significant deficiencies” in how the state managed how it spent federal aid to repair homes and restore land devastated by powerful hurricanes Sandy, Lee and Irene more than a decade ago.

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

The audit did not identify any specific fraud, abuse or problems resulting from procedural deficiencies, but auditors said the way the state manages disaster recovery programs increases the risk of such problems.

The state has spent $4.5 billion in federal funds to pay for repairs and rehabilitation for eligible property owners and to purchase and rehabilitate some severely damaged properties that could be used to build affordable housing. The funding was also used to better protect New York City from future severe storms.

The audit examined the state’s 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 program oversight,” DiNapoli said Thursday. “Homes and Community Renewal must ensure that money only goes to eligible properties and that there are no improper or duplicate payments. It also needs to better monitor projects to track delays to minimize the need for refunds. These challenges need to be addressed so we are better prepared to manage future recovery efforts.”

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

Among the audit findings:

• “There were indications” that 2 of the 11 properties purchased by the state for $189,540 “may not have qualified for financing.”
• Among the selected cases, New Yorkers were paid $60,288 in potentially duplicate payments, and one claimant was overpaid $6,000 for recovery assistance.
• Six of the 11 properties acquired by the government were undeveloped or delayed by the time of this year’s audit.”

“Collectively, these deficiencies increase the likelihood that funds will not be used for disaster recovery program purposes and may represent a financial loss to the state and a reduction in funding opportunities for other potential applicants,” the audit states.

In an audit of the Homes and Community Recovery Agency, which administers disaster recovery programs, DiNapoli reviewed 41 cases to track the use of public money to rebuild after sea waves, floods, hurricane-force winds, long power outages and other superstorm attacks.

The Homes and Community Renewal Agency defended its programs to “quickly use funds for critical repairs, renovations, or acquisitions to redevelop or convert to open space damaged homes in disaster-declared regions of New York State.” The agency said most of the issues raised in the audit were resolved last year, many before the agency was presented with a draft audit over the summer, and improvements continue.

Michael Gormley has been with Newsday since 2013, covering state government, politics and other issues. He has been covering Albany since 2001.