BUFFALO, N.Y. — The Erie County Executive's staff is working on a response to the Office of the Inspector General.

"I'm fairly confident that when all is said and done and our response is officially reported back to FEMA as well as the IG's office then the county will not be owing $48 million dollars," Mark Poloncarz, (D) Erie County Executive, said.

According to the audit, FEMA should recover disaster assistance received by the county after the October 2006 storm.

"Quick decisions had to be made about removing debris and everything else. I think the county did a very good job efficiently and effectively helping the area recover from an unprecedented storm," Brian Higgins, (D) 26th Congressional District said.

But the IG's office claims more than $39 million should be returned because the county gave preference to local contractors during clean up.

The County Executive said the audit ignores federal disaster law that encourages geographic preference.

"That's what I think is the most aggravating thing about this audit is that Erie County followed the law and now we're being criticized by the department of Homeland Security for not following the law," Poloncarz said.

Another $9 million in costs were unsupported according to the audit.

"We, unfortunately, couldn't find them by the time of the audit," Poloncarz said. "We said we were looking for them and we actually had to get them from Albany."

If held liable, the county could face a cash flow crisis and a drop in its credit rating.

"Even with this incredibly outrageous number, if we had to come up with the money right away, we wouldn't have the cash to begin with," Stefan Mychajliw, (R) Erie County Comptroller, said.

But so far, FEMA has not asked for the money and local leaders expect the county will never have to pay it.

"I have issued a letter to the Inspector General categorically rejecting their conclusions about Erie County owing the federal government $48 million dollars and I'm expecting a response any day now," Higgins said.

The County Executive said he does not believe the audit was requested by anyone locally.