Federal officials say as much as $700 million in Katrina, Rita aid may have been misspent

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Federal investigators said Wednesday that as much as $700 million in federal aid intended to help some 24,000 Louisiana families elevate their homes after Hurricanes Katrina and Rita in 2005 may have been misspent.

A report by the Housing and Urban Development Department’s inspector general said some homeowners who got grants of up to $30,000 used the money for something else, and that others didn’t provide sufficient documents to state officials to show that the work was done.

“The state did not have conclusive evidence” that $698.5 million in disaster recovery aid was used to elevate homes, the auditors wrote.

In response, HUD officials said the state is responsible for making sure the money was spent properly. But after seeing similar results in previous audits, department officials helped Congress put tighter reins on the program in distributing aid to victims of last fall’s Superstorm Sandy in the Northeast.

“In the years since Hurricane Katrina, HUD has already implemented a number of the recommendations made by the inspector general, including additional controls to ensure recovery funds are used appropriately,” department spokesman Jason Kravitz said.