Audit Says Katrina Aid May Have Been Misspent

Federal investigators say as much as $700 million in federal aid intended to help some 24,000 Louisiana families elevate their homes after Hurricanes Katrina and Rita in 2005 may have been misspent.

A report by the Housing and Urban Development Department’s inspector general says some homeowners who got grants of up to $30,000 used the money for something else, and that others didn’t provide sufficient documents to state officials to show that the work was done.

HUD officials say the state is responsible for making sure the money was spent properly. But after seeing similar results in previous audits, HUD officials helped Congress put tighter reins on the program in distributing aid to victims of last fall’s superstorm in the Northeast.