May 20, 2014 — The following was released by the Commerce Department Office of Inspector General:
The Office of Inspector General, U.S. Department of Commerce, has released a report that details the findings of an investigation into allegations received from a whistleblower alleging that a NOAA grantee may have improperly applied for and received Hurricane Sandy funds under the Disaster Relief Appropriations Act and Sandy Recovery Improvement Act.
The OIG investigation concluded that NOAA’s actions resulted in questioned costs of approximately $550,200 – over half of the $1 million dollars of funds disbursed – for items that should not have been eligible for funding based on the plain language of the disaster relief law.
The investigation was initiated following a whistleblower complaint that Hurricane Sandy relief funds were being used by NOAA to replace assets that were not actually damaged by Hurricane Sandy. Nine research facilities that are part of the National Estuarine Research Reserve System (NERRS) applied for and together received approximately $1 million in Sandy relief funds from NOAA. The facilities (listed in the report) receiving funds under the grant are located in: New York, New Jersey, Massachusetts, Maryland, Virginia, Delaware, New Hampshire, Maine and Rhode Island.
The OIG investigation found that NOAA expanded the Act to include assets that they could argue were “compromised” by Hurricane Sandy. This was done in response to concerns raised by NERRS facilities (e.g., prospective grant recipients) objecting to receiving disaster relief funds to purchase aging assets that were not actually “damaged” by the storm. Accordingly, NOAA advised the NERRS facilities that research equipment that was “compromised” by the storm was eligible for Hurricane Sandy funding, despite the law’s requirement that equipment be “damaged” in order to receive disaster relief funds.
The OIG made several recommendations including:
– NOAA conduct an improper payments analysis and seek the recovery of any disaster relief funds improperly paid out.
– NOAA, in consultation with the Department of Commerce Office of General Counsel, determine whether it violated any laws or regulations when funds for items listed in the report were spent by grantees.
– NOAA review other programs, amounting to approximately $6 million, to determine whether the scope of the Act was similarly expanded and report on the results of that review.
Read the full Inspector General Report here