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Audit Finds Problems With Oklahoma's Use of Federal Disaster Recovery Funds

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HUD OIG
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An audit of federal disaster recovery funds given to Oklahoma says the state failed to comply with requirements for managing the money.

Out of $93.7 million in Community Development Block Grant Disaster Recovery funds awarded for disasters from 2011 to 2013, $11.7 million in obligations weren’t properly documented. Of that amount, $4.3 million was already spent and may have to be paid back.

Will Nixon with Housing and Urban Development’s Office of Inspector General said state officials had only obligated about half the funding when the audit began.

"So, the other half of the money, we did not look to determine whether the obligation was appropriate or not," Nixon said. "So, yes, these amounts could grow, and they could be a lot higher than what we reported."

According to the audit, state officials either didn’t follow documentation requirements or left that to local entities getting the money in the end.

"This is an indication which the state just really abdicated its responsibility related to monitoring and managing these funds," Nixon said.

In one example, the state gave Lincoln County $228,834 dollars to resurface a road damaged by a tornado without verifying the damage. The HUD OIG audit said the road appeared to be unpaved in a photograph inspectors were shown during a site visit.

The audit reviewed 14 separate instances where Oklahoma obligated funds. Each time, officials did not document the selection process to prove it followed all federal requirements.

"For instance, with the fire equipment, that it was eligible, that it was tied back to one of the wildfires, that it was appropriate," Nixon said. "[Oklahoma] is going to have to go back and do those things."

More than one-third of the funds the audit says were improperly documented was for fire equipment in various towns. Other funding was obligated for road resurfacing, a housing complex and drainage projects.

In addition to asking for Oklahoma to provide documentation supporting allocations already made, HUD OIG recommended the state follow all federal requirements for future obligations and spending.