NEW ORLEANS -- A federal inspector general has recommended FEMA take back $2 billion the city was awarded to assist with repairing streets and water, sewer and drainage systems Hurricanes Katrina and Rita damaged.

But it doesn’t appear FEMA is willing to recall the money, saying it provided detailed documentation that the storms “significantly damaged” the city’s infrastructure and that repairs are eligible for federal funding.

FEMA first awarded the city and Sewerage & Water Board $785 million and later $1.25 billion. That sum is the majority of the money the city and S&WB have on hand as they begin a massive infrastructure-repair project with an ultimate price tag of $9 billion.

The city has spent about $305 million of that money as of January.

But in a report released Wednesday, the Department of Homeland Security Office of Inspector General wrote that the damage was not eligible for federal disaster assistance funding.

“Evidence shows that the infrastructure was old and in poor condition even before the hurricanes," the IG report said. “Eligibility for FEMA funding requires that damages be the direct result of the declared disaster, and it is the applicant’s responsibility to show that the damages are disaster-related.”

FEMA shot back, saying there was no doubt the flooding that followed the storms caused the damage.

“Regardless of its age, the New Orleans infrastructure was functioning to serve a population of 445,000 prior to Hurricane Katrina,” FEMA wrote in response to the IG’s report. “This infrastructure was damaged by Hurricane Katrina and FEMA appropriately limited the approved funding to Katrina-related disaster damage.”