2/27/13: Poloncarz Calls Federal Audit Legally Wrong in Seeking Recovery of $48 Million in October 2006 Disaster Relief

Modified: January 23, 2015 3:10pm

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Expresses Disappointment in Federal Auditors’ Oversight of Legally Binding Stafford Act Provision on Local Preference Six Years After Storm Recovery, Calls into Question FEMA’s Understanding of Their Own Rules

ERIE COUNTY, NY— Today, Erie County Executive Mark C. Poloncarz released the following statement in response to an audit performed by the Department of Homeland Security Office of Inspector General (“Federal Auditors”) recommending that the Federal Emergency Management Agency (“FEMA”) should recover $48 million of Public Assistance Grant funds awarded to Erie County in relation to the October 2006 Storm.

“Federal Auditors are legally wrong to recommend the recoupment of $48 million in federal disaster funds based on ‘local preference’ comments made by County Executive Giambra at the time.  Federal law in effect at the time of the October 2006 storm specifically directs that in federally-declared disasters, local officials give explicit preferences for hiring local businesses to perform disaster recovery.  That is precisely what County Executive Giambra and other then-Erie County officials did.  Frankly, we find it shocking that Federal Auditors would completely ignore such a well-known law when trying to justify their findings and recommending penalizing the county for following the law.” 

“There is absolutely no evidence of improper use of these funds.  It has also become clear that the bulk of the funds were spent within the spirit of federal regulations, and County officials at the time did everything with the full knowledge and approval of FEMA and New York State Emergency Management Office (“NYSEMO”) officials without any objections. 

“The fact that after this storm and the storm recovery, after complying with on-scene FEMA and NYSEMO advice and guidance, after numerous NYSEMO and FEMA reviews and approvals, and six years after the storm, the Federal Auditors’ findings bring into serious question the reliability of advice from FEMA to local governments during an emergency event.  

“I would caution our counterparts in New Jersey and the New York City area recovering from Superstorm Sandy to be wary of the advice you are given by Federal officials because even if you do everything based on their guidance, 5 or 10 years later, federal auditors may recommend repayment.  That is not right and it is not fair.

“Along with our federal representatives, Erie County will do everything possible to demonstrate the misinterpretation of the law, flawed methodology used and improper opinions expressed by the federal auditors to stave off a potential new disaster – this time, a financial one – that local taxpayers need not have to bear.”

The Local Community Recovery Act of 2006, (an Act of Congress amending the Stafford Disaster Relief and Emergency Assistance Act passed and signed into law by President George W. Bush on 4/20/2006 as a direct response to Hurricane Katrina) specifically directed that in federally-declared disasters, local officials give explicit preferences for hiring local businesses to perform disaster recovery.  An opinion rendered by the Erie County Department of Law notes that the Stafford Act provisions and the Department of Homeland Security Appropriations Act of 2007 supersede the Code of Federal Regulations (44CFR 13.36(c)(ii)) provision cited by Federal Auditors as justification for the recoupment of federal disaster funding in relation to the October 2006 Storm.

 Copy of the Office of Inspector General Audit

Copy of the Erie County Attorney's Legal Opinion Regarding the Stafford Act

Letter From Congressman Higgins to DHS Deputy Inspector General Charles Edwards

PowerPoint Presentation on Federal Law Dictating Local Preference