In the second article in as many days, Texas Tribune reporter Becca Aaronson has disclosed a HUD inspector general’s report that says the State of Texas’ Ike-Dolly disaster recovery program, which is funded by the federal government, is facing a potential $8 million repayment of inflated fees paid to the private contractor hired by the State to run the program.
The U.S. Department of Housing and Urban Development’s inspector general released an audit Thursday recommending that Texas pay back more than $1 million for ineligible or questioned costs and that the state find supportive documentation or repay an additional $7.59 million for what the audit says are inflated labor costs.
The audit targets costs that are associated with contracts with HNTB, a private engineering firm that had been involved in the nonhousing portions of the recovery program. HNTB is still involved with some projects, but its role has been dramatically reduced. …
The state was unable to justify to the federal auditors how it procured the contracts and “could not show that it had performed analyses to ensure that the prices that it would pay were fair and reasonable,” the audit says.
The state told auditors that it was unable to turn over the documents because of high staff turnover. …
The federal auditors examined three invoices from HNTB to the state and found the amount the bill exceeded what the state was allowed to pay contractors by $542,477 — or 23 percent. Therefore, the auditors estimated that out of $35.23 million the state paid HNTB for hourly work, $8.14 million represented inflated costs.
Read the entire story at: Federal Audit Questions $8 Million Paid to HNTB — General Land Office | The Texas Tribune.