San Diego overcharged FEMA $1.2 million for disaster

Bogus recycling costs called out by U.S Homeland Security audit

Flooding on Friars Road
  • Flooding on Friars Road

Just as the city is wrestling with issues of falling trees in the wake of the latest storm, a Homeland Security Department audit of the Federal Emergency Management Agency (known as FEMA) says officials here misspent $1,163,225 worth of federal disaster money in 2010 and 2011 and must refund the cash to the U.S. government.

The alleged mishandling of fiscal funds adds to persistent questions regarding the city's ability to adequately track its finances.

Flooding in Ocean Beach

Flooding in Ocean Beach

Overcharges included $654,348 in "excessive landfill costs"; $393,704 worth of "fees unrelated to the disaster"; $112,279 in "costs related to preexisting damages"; and $2894 in "excessive equipment costs."

The allegedly misspent funds totaled 29 percent of the $3,991,282 city award audited by the government, according to the January 25 report. The city received a total of $6 million in post-disaster FEMA money.

From December 17, 2010, through January 4, 2011, the city "experienced flooding, debris, and mud flows resulting from severe winter storms," says the report.

"The City manages normal rainwater flows through a network of storm drains and channels that it regularly maintains and cleans to minimize the accumulation of debris, which can cause flooding," notes the document.

"However, the severity of the storms created excessive debris in three of the City’s channels (Chollas Creek, Smuggler’s Gulch, and Pilot) and caused blockages, overflows, and flooding onto adjacent roadways and private properties."

Adds the audit, "City personnel used City-owned trucks and leased equipment to remove the silt, refuse, and vegetative debris from the channels and haul it to the City-leased and operated Miramar Landfill."

That's where problems later emerged.

"The City improperly claimed and received $393,704 from FEMA for ineligible recycling fees...because the Landfill did not recycle any disaster-related debris associated with these projects," says the document.

"Instead, it buried the debris because the debris material did not qualify for recycling."

In addition, "The City improperly claimed and received $654,348 from FEMA in ineligible landfill costs...because it misclassified the debris as a type for which the City’s landfill charges a higher rate."

According to auditors, "the City should have classified this type of disaster debris as General Refuse Waste, with a corresponding disposal rate of $21 per ton. However, we identified 1,685 instances where the City’s automated Landfill billing process incorrectly classified debris loads as Construction and Demolition Waste, with a higher disposal rate of $58 per ton — or $37 more per ton than appropriate."

On top of that, San Diego officials tried to claim that previous damage was caused by the 2011 storms, and therefore was eligible for federal emergency money.

Challenged by FEMA, the city reduced that claim by $160,374 to account for so-called pre-existing damages.

But auditors discovered that "the City's actual pre-disaster damages were $272,653 — or $112,279 more than FEMA and the City’s determination."

Many of the problems arose because the city did not "implement an adequate accounting process that accurately captured and verified the eligibility of landfill costs incurred."

The audit blames State of California bureaucrats in part for not providing sufficient direction to the city, but San Diego officials "disagreed with this finding. They told us that California officials consistently provided them comprehensive and exhaustive guidance related to FEMA’s Public Assistance Program, and always demonstrated great responsiveness and support to the City’s inquiries, questions, and requests for assistance."

Instead, according to the document, "City officials said that the findings in this report generally occurred because of staffing challenges immediately following the disaster; and that consequently (since 2012) they have committed an additional full-time, supervisory level position to support the City’s FEMA-related work to fully incorporate FEMA and California requirements into the City’s practices."

But the auditors held their ground.

"California monitored, validated, and approved $1,048,052 in landfill-related costs that we determined were not eligible. Therefore, regardless of the amount or quality of advice that California provided, it did not assure compliance with applicable Federal requirements."

The city managers generally agreed with the report's other findings, though they argued that the disputed recycling fees were allowable "direct costs", the report says.

Auditors responded that "FEMA only reimburses actual recycling costs when an established recycling program exists and the disaster debris consists of materials disposed of through the recycling process."

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Penny wise pound foolish? Or is it?

It's either the City's cheapness in not having employees experienced with FEMA rules and regs. Or City leaders trying to pull one over the Feds. If it's the latter, it's just another indicator of corrupt gov't. If it's the former it's another indicator of POOR leadership where no one is ever held accountable.

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