Greater Transparency Needed in Spending on Post-Katrina and Post-Rita Recovery

About $88 billion has been appropriated by Congress to 23 different federal agencies through four separate emergency supplemental appropriations acts. Close to half, or $42.6 billion, was appropriated directly to the Federal Emergency Management Agency (FEMA), $17.1 billion went to the Department of Housing and Urban Development, $9.1 billion to the Department of Defense, $7 billion to the Army Corps of Engineers, with remainder split by 19 other agencies. The U.S. Government Accountability Office (GAO) admonished FEMA for lacking a mechanism to report on the financial activities of these federal government agencies that are performing reconstruction work on its behalf. GAO urged that steps be taken to ensure better accountability and transparency, and to allow an assessment of how well funds are being spent. The Army Corps of Engineers, for instance, has allocated more than $1 billion to an initial effort to repair and restore close to 169 miles of damaged levees, floodwalls, and other flood control structures along the Gulf Coast. Most of the measures carried out by June 2006 were of a temporary nature. And they were undertaken only where damage was clearly visible, leaving open to question the reliability of adjacent levees and floodwalls. The Corps has allocated an additional $941 million for more repairs and reconstruction, but expects actual costs to be greater due to design changes, cost overruns, and other factors. Longer-term work to strengthen hurricane protection in southeastern Louisiana will require many years and several billion dollars of additional funding.