Hurricane Katrina Aid Debacle

A few days ago I wrote a post about the anniversary of Hurricane Katrina. John C. Dvorak just brought this article to my attention (see his post here). He writes about a recent article on the inept way in which emergency relief money was handled after Hurricane Katrina:

The donated cash met a different fate. By late October, the State Department had allocated $66 million of the $126 million in international assistance to FEMA, which then granted it to the United Methodist Committee on Relief (UMCOR), the nonprofit aid arm of the United Methodist Church. With the funds, UMCOR established Katrina Aid Today, a consortium of nine national aid agencies dedicated to case-management work for Katrina evacuees. But to date, only $13 million has actually been disbursed, and it has been allocated almost exclusively to salaries and training for case workers, not to evacuees.

As for the rest of the funds, some $60 million languished for more than six months in a non-interest-bearing account at the U.S. Treasury. Had the money been placed in Treasury securities, the GAO report notes, their value would have increased by nearly $1 million by the end of February. Instead, inflation meant the funds actually decreased in value as the government stalled.

Read the complete article here.

How could this have been handled so poorly?

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