Nobody really made sure $11B in Hurricane Sandy grants were properly spent

Updated Sep 11, 2019

WASHINGTON — The Port Authority and other transportation agencies that shared $10.9 billion in Hurricane Sandy relief funds were supposed to hire independent monitors to make sure the money was properly spent.

But the Federal Transit Administration never followed through to make sure the watchdogs were actually watching the money, according to a report issued Wednesday by the U.S. Department of Transportation’s inspector general.

Five agencies — Port Authority, New Jersey Transit, Connecticut Department of Transportation, New York City Department of Transportation and New York’s Metropolitan Transit Authority — received more than $100 million in federal funds and therefore were required to hire monitors.

The inspector general told the Federal Transit Administration to issue guidelines as to what information needed to be reported every quarter and to ensure that the state and regional agencies tell the federal government of settlements reached with contractors that could include federal funds.

“Until this guidance is implemented,” the report said, “FTA may not realize the full benefits of the integrity monitor program, and Hurricane Sandy funds may be at risk.”

In addition, the agencies in question did not report incidents of fraud involving non-Sandy funds, even though some of the same contractors later received Sandy money when they might have been disqualified for future federal awards.

“Even in cases that do not involve Hurricane Sandy projects, settlements that do not identify the parties involved can affect subsequent federally funded activities — such as responsibility determinations for firms bidding on future Sandy-funded projects,” the report said.

The inspector general also recommended that the Federal Transit Administration make arrangements to get back $1.1 million in federal funds after the Port Authority reached a fraud settlement with its contractors.

The FTA agreed with the recommendations, while citing examples of how the monitor program did work. For example, the agency said, the Port Authority visited the sites, created sign-in/sign-out sheets, interviewed workers and conducted head counts of contractors.

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