(09/11/2008)
An official government audit now says the government found that FEMA wasted at least $45.9 million on the four contracts that together were initially worth $400 million.

FEMA subsequently raised the total amounts for the four contracts twice, both times without competition, to $2 billion and then $3 billion.

The money-hole is one of many embarrassing blunders associated with Katrina, including the recent discovery of items stored in a warehouse that should have been given to victims.

The agency wasted $20 million for a camp for evacuees that was never inspected and proved to be unusable, investigators say.

A report by the Homeland Security Department's office of inspector general, just obtained, is the latest to detail mismanagement in the multi-billion-dollar Katrina hurricane recovery effort, which investigators have said wasted at least $1 billion.

The review examined temporary housing contracts awarded without competition to Shaw Group Inc., Bechtel Group Inc., CH2M Hill Companies Ltd. and Fluor Corp.

FEMA did not always properly review the invoices submitted by the four companies, exposing taxpayers to significant waste and fraud, according to the investigation.

FEMA responded by saying it has taken several steps to improve its disaster response since the 2005 storm.


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