Audit: FEMA Still Squandering Millions in Katrina Aid

WASHINGTON (AP) - One year after Katrina, federal investigators say the government is still squandering tens of millions of dollars in wasted disaster aid. That includes $17 million in bogus rental payments to people who had already received free trailers and apartments.

At the same time, the Federal Emergency Management Agency has recovered less than one percent of the $1 billion it wasted on fraudulent hurricane assistance after the August 2005 storm, highlighting a need for stronger controls the next time a major hurricane strikes.

The report by the Government Accountability Office, set to be released Wednesday, paints a picture of an agency still struggling -- at substantial taxpayer expense -- to find the balance between distributing quick aid to those in need while guarding against substantial abuse.

Last week, a federal judge in Washington ordered the Bush administration to resume housing payments for thousands of people displaced by Katrina, criticizing FEMA for a convoluted application process. FEMA is appealing that ruling.

The GAO audit found that numerous aid applicants received duplicate rental aid, with FEMA in one case providing free apartments to 10 people in Plano, Texas, while sending them $46,000 to cover out-of-pocket housing expenses.

Another $20 million was wasted on thousands of individuals who claimed the same property damage from both Hurricanes Katrina and Rita. FEMA also paid at least $3 million to more than 500 ineligible foreign students in the stricken Gulf Coast.