The Federal Emergency Management Agency has questioned whether funds allocated to Baldwin County were used properly for post-hurricane cleanup.
According to the December 2008 Office of Inspector general report, Baldwin County received a total of $41.3 million for 2004 Hurricane Ivan and 2005 hurricanes Dennis and Katrina.
The money came in amounts of $36 million, $800,000 and $4.5 million for the three respective hurricanes.
Government auditors recommend in the OIG report that FEMA reclaim $10.5 million because the auditors suspected the county claimed $7.7 million in tipping fees from landfill disposal, $1.64 million on stump removal labor, even though most stumps were removed by homeowners, $1.06 million in interest earned from tipping fees, $28,569 in duplicate fees and $10,302 covered by insurance costs.
Baldwin County claimed it gave money to contractors who were supposed to accomplish these tasks, but the report claims the money was eventually funneled back into the county’s pocket.
However, financial data contained in the county’s audited financial statements for the 2005 fiscal year indicates that the county’s solid waste fund, which includes the costs of maintaining the county’s landfills, benefited from tipping fees related to the hurricanes.
Federal regulations (44 CPR l3.22(a)(2)), prohibit the use of federal grant funds to accrue a profit.
“(Revenues in the Baldwin County Solid Waste) fund increased 3.25 times, from $4.7 million in 2004 to over $15.2 million in 2005, while expenses increased only 1.29 times, from $3.9 million to $5.0 million for the same period,” according to the OIG report.
Baldwin County disagrees with the OIG’s allegation that it accrued interest on the money it received from FEMA, according to the OIG report.
After reviewing claims by Baldwin County and the OIG, FEMA sided with the OIG on all issues except tipping fees and interest earned on the fees.
FEMA will pursue a total of $5.8 million in reimbursements, $3.47 million from excessive tipping fees and $656,000 from interest, according to an Aug. 19 letter from FEMA to Baldwin County.
At this time it is not known whether Baldwin County will accept or appeal FEMA’s decision.
This article was originally published in The Auburn Plainsman on 9/9/2009.