Audit: county owes FEMA $48 million

BUFFALO, N.Y. (WIVB) - Leaders are responding to an audit by the Department of Homeland Security Office of Inspector General Wednesday.

The audit says FEMA should recover $48 million of public assistance grant funds awarded to Erie County in connection to the October 2006 Surprise Storm

  >>  READ: Inspector General Audit saying FEMA should recover millions from Erie County

The audit says the county did not comply with federal grant regulations and FEMA guidelines when awarding more than $39 million in contracts in connection to the storm. In addition, the audit says FEMA reimbursed the county $9 million for inadequately supported costs. The audit says that the county improperly charged more than $33,000. As a result, they are questioning $48,465,416 of unsupported costs claimed by the county.

Erie County Executive Mark Poloncarz addressed the media on the recent audit Wednesday afternoon, calling it legally wrong. He says at this point, it's just a recommendation for FEMA and until FEMA files a claim, the money doesn't have to be returned.

"From what we've been told, someone has an ax to grind against FEMA and the amount of money that has been spent in regards to disasters in a five- to ten-year period," Poloncarz said. "We heard we're just one of other recipients of FEMA dollars that are presently being audited."

Poloncarz added that though FEMA found that the county gave preference to local contractors, limit the competitive pool, two laws that were in place before the storm gave local officials the authority to choose businesses who primarily work in the area affected by storm damage.

Erie County Comptroller Stefan Mychajliw released a letter regarding the audit Wednesday, in part saying, "I will work collaboratively with the Control Board, Legislature, and County Executive to fight for a solution that protects taxpayers and is satisfactory to all parties.  If we need to lobby our federal congressional delegation and FEMA together, then count me in."

At the press conference, Mychajliw added, "We have $45 million cash-in-hand. We have $12.5 million in payroll going out this week. Our undesignated fund balance is $83,489,000 and it would absolutely cripple Erie County government/"

Congressman Brian Higgins says the recent federal audit is unfounded. Higgins released a statement saying in part, "In a letter sent to the Department of Homeland Security Deputy Inspector General on February 8, 2013, Congressman Higgins wrote,” I support the efforts of the various Inspectors General…to root out the misuse of public resources; in this case, however, I must conclude that this attempt to foist this bill on the property-taxpayers of Erie County is misguided, as it is inconsistent with applicable law.”

Joel Giambra, who was county executive at the time of the storm, tells News 4, "I will never apologize for putting WNY jobs first. When the federal government provides aid to localities, I believe it should always be spent with local employers and local workers, to the greatest practical extent. That was my belief then, and it's still my belief today."