(The following was excerpted from a recent article in the Single Audit Information Service.) The Federal Emergency Management Agency (FEMA) plans to ensure that the state of New York and New York City properly close out an award for repairs to multifamily structures damaged by Hurricane Sandy, in response to a recent Department of Homeland Security Office of Inspector General (OIG) audit that found that accounting reports are still incomplete although the work was finished more than three years ago.

Following Hurricane Sandy in October 2012, many single family and multifamily structures in New York City and the surrounding areas sustained damage. The New York State Division of Homeland Security and Emergency Services, as a FEMA pass-through entity, provided almost $538 million in federal Public Assistance grant funds to the New York City Department of Environmental Protection to help the city implement two large “shelter-in-place” projects that enabled disaster survivors to stay in their own homes by providing emergency protective measures such as temporary repairs to affected electrical, heating and hot water systems. FEMA expanded the repair services to include temporary boilers and power generators.

In January 2013, FEMA estimated that New York City spent about $14.33 million of these funds on emergency protective measures for multifamily structures. Although all work under this award ended by April 2013, the OIG found that FEMA has not identified and recovered all federal funds New York City spent on these projects. “This occurred because FEMA’s records were incomplete and New York State has not provided FEMA with a final accounting of costs for the work,” the OIG explained. “Furthermore, FEMA has no procedures to independently identify commercial and residential properties New York City had assisted with federally funded emergency protective measures.”

The OIG noted that even though New York City has not made payments to any contractors under the grant since Oct. 15, 2014, the project closeout has not yet started. FEMA officials said that in light of the size and complexity of the damage caused by Hurricane Sandy, the timeframes for closing out the award should be longer. However, the OIG said that because three years has passed the since the completion of the work, FEMA is at increased risk of not being able to recover the funds.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)