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Audit finds NY Superstorm Sandy relief program paid $6.8 million for flawed or incomplete work

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NEW YORK — A program that was supposed to rebuild homes wrecked by Superstorm Sandy paid $6.8 million to contractors for work that was "flawed or incomplete," the city's comptroller said in an audit released Tuesday.

Comptroller Scott Stringer's office examined the city's much-maligned Build It Back program, which was supposed to help people repair, rebuild and elevate their homes after the October 2012 superstorm. The program, launched by former Mayor Michael Bloomberg, was widely considered a failure for rebuilding only a handful of homes until it was overhauled by Mayor Bill de Blasio last year.

City officials paid some of the contractors twice, resulting in a loss of $245,000, Stringer said. Thousands of aid applications were incomplete or insufficiently documented, but the companies were paid for processing them, Stringer said at a press conference on the Rockaway peninsula, a beachfront community devastated by the storm.

In other cases, homeowners were told their paperwork was lost, resulting in significant payment delays, Stringer said.

The audit examined whether the city properly ensured benefits to storm victims from June 2013 through August 2014, a period overlapping the mayoral administrations, he said.

"We found overbilling, double-billing, contractors being paid even through the application wasn't complete," Stringer said. "This is the mismanagement and the untold story of Hurricane Sandy."

He said the city has to do better for homeowners "who have been victimized twice: once by the storm and once by the bureaucracy."

Superstorm Sandy, which was spawned when Hurricane Sandy merged with two other weather systems, killed people in several states, but New Jersey and New York were hit the hardest. After the storm, the city contracted with a private company, Public Financial Management, to manage subcontractors that were supposed to provide assistance to affected people seeking government aid. The company and the subcontractors were paid to review and process aid applications made by homeowners.

The city's Office of Housing Recovery Operations failed to properly manage the consultants and subcontractors, Stringer's office said. One of the subcontractors hired employees who didn't meet educational requirements for their jobs and didn't understand the program, Stringer said.

The city has terminated its relationship with Public Financial Management, which referred media inquiries to the city's Office of Housing Recovery Operations.

"This audit simply reiterates what the administration already outlined in its Build it Back report nearly one year ago - and every recommendation is already implemented or being implemented as part of the Mayor's overhaul," said Amy Spitalnick, a spokeswoman for the Mayor's Office.

"Over the last year, offers have been made to nearly all active applicants, and thousands have started construction or received reimbursement, compared to none when this administration took office," Spitalnick added.

Stringer spoke at the home of bus driver Darrell Mitchell, who lives in Arverne with his wife and four children. Mitchell's home abuts Jamaica Bay and was swamped with 4 feet of water, causing $100,000 in damage. The family had to live with his father in Brooklyn for more than a year after the storm.

Countless calls to the city went unanswered, and Mitchell hasn't received a dime from Build It Back. Instead, he has spent tens of thousands of dollars out of pocket and received only $10,000 from the federal government. Rainwater still seeps through his home's walls.

"This is our home," Mitchell said as he showed reporters his bare walls and holes in the ceiling. "There's nowhere else to go."

Also on Tuesday, de Blasio and U.S. Sen. Chuck Schumer praised the Federal Emergency Management Agency for authorizing $3 billion in federal funding, the largest block grant in its history, to repair and protect city housing developments damaged by Superstorm Sandy.

"This is a case when the federal government did something right," de Blasio said.


Associated Press Writer Jonathan Lemire contributed to this report.

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