A North Dakota Army National Guard Quick Response Force (QRF) made up of Soldiers of the Wahpeton-based 188th Engineer Company delivers emergency flood protection sandbags to protect civilians and their property in rural Cass County, North Dakota, April 9, 2019. (U.S. National Guard photo by Chief Master Sgt. David H. Lipp)

OIG: FEMA Should Disallow $1.1M in Grant Funds Awarded to Flood-Stricken N.D. County

Richland County received approximately $7 million in Federal grants from the North Dakota Department of Emergency Services for damage from severe flooding that occurred between 2009 and 2013. The Department of Homeland Security Office of Inspector General audit objective was to determine whether the County properly accounted for and expended the funds according to Federal regulations and FEMA guidelines.

Richland County, North Dakota (County) did not always properly account for and expend Federal funds according to Federal regulations and Federal Emergency Management Agency (FEMA) guidelines. As the agency awarding Public Assistance Program grants, FEMA is responsible for holding its grantees accountable for proper grant management. As the grantee, the North Dakota Department of Emergency Services (North Dakota) needed to ensure the County was aware of and followed all Federal procurement regulations when awarding disaster-related contracts.

OIG determined FEMA did not hold North Dakota accountable for fulfilling its grant management responsibilities, and North Dakota did not adequately manage the FEMA grant by monitoring the County to ensure it complied with applicable regulations and guidelines. The County did not follow all Federal procurement regulations when awarding about $1.9 million in disaster-related contracts. The County also did not properly account for and maintain disaster-related cost documents. As a result, there is no assurance the contract costs claimed by the County are reasonable, putting Federal funds and taxpayers’ money at risk of fraud, waste, and abuse.

FEMA should disallow about $1.1 million in grant funds and direct North Dakota to work with the County to verify it complies with all Federal grant requirements and establishes effective accounting systems, OIG recommended.

FEMA officials agreed with OIG’s findings and recommendations.

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