BATON ROUGE -- The state and its legislative auditor have found that grants and forgivable loans totaling $118 million may have gone to waste in post-Katrina housing recovery programs.
Legislative Auditor Darryl Purpera took a sample of 45 Road Home grants and found that nearly half of those homeowners failed to comply with three-year rebuilding covenants. In addition, the state agency running the Road Home identified 1,142 ineligible awards totaling $58 million that may have to be repaid to the federal government.
More than 130,000 homeowners received more than $8.5 billion under the Road Home program, and state contractors received another $1.5 billion to dole out the money. This legislative audit is just the latest report to find a significant percentage of homeowners sampled may not have used the money properly.
Also, the legislative auditor looked at the Road Home’s sister programs, the Small Rental Property Program that paid forgivable loans to mom-and-pop landlords to help them fix their storm-damaged rental properties, and the Hazard Mitigation Grant Program to help Road Home recipients pay to elevate their houses to safe flood levels.
In the rental repair review, the auditor found a quarter of the properties sampled were likely ineligible, and the state Office of Community Development identified another $33 million in loans that needed to be recovered.
And in the elevation program audit, the state tapped 801 grants totaling $22.8 million for possible recovery. The auditor also found that contractors might have been compensated for elevation and shoring work they didn’t actually perform.