CONTINUING DISASTER

With one federal agency too easily handing out money and another canceling needed loans, congressional oversight committees will long be busy reviewing what went wrong during and after Hurricane Katrina. Because the promise of rebuilding the Gulf Coast is far from fulfilled, depriving help to those who need it while millions of dollars disappear to fraud and waste is unacceptable.

Inspectors general and audits, which Sen. Susan Collins ensured were in place, are helpful at uncovering wrongdoing and mistakes. Now that government officials and lawmakers know how mistakes and fraud happen, they need to ensure measures are in place to quickly fix them and prevent them in the next disaster. A bill backed by Sen. Olympia Snowe would help with regard to the Small Business Administration, which is administering billions of dollars of disaster loans.

A recent audit of a loan program run by the SBA found that it canceled nearly 8,000 loans for victims of Hurricanes Katrina, Rita and Wilma within two weeks last fall without notifying borrowers. In some instances, a computer glitch made it look like the borrowers asked to have the loans canceled. The SBA had been criticized for being too slow in processing loan requests, so thousands of loans were unilaterally canceled to reduce the backlog of approved but undispersed funds. Many of the borrowers expected to use the money to rebuild their homes, a process that is now delayed because of the SBA’s actions.

The agency’s inspector general reviewed the situation after two former employees said the SBA canceled loans to improve its numbers, according to the Associated Press. The SBA denies arbitrarily canceling loans.

Meanwhile, the Federal Emergency Management Agency has paid nearly $500 million to thousands of people who should not have gotten aid with federal agents wading through more than 11,000 cases of possible fraud involving the 2005 hurricanes.

Department of Homeland Security inspectors face a large backlog of fraud cases, according to USA Today. According to the paper, the department is pursuing cases involving people lying about where they lived to collect disaster aid, people posing as charity workers to collect donations, people stealing or falsifying Social Security numbers to get aid and contractors overbilling the government for recovery and rebuilding work. About 700 people have been charged so far with 1,700 open fraud cases and thousands of others under review.

After the hurricanes, more than $7 billion in disaster aid was directed to Gulf Coast residents, with billions more going to government contracts for rebuilding.

Another USA Today analysis found that FEMA has recovered less than $16 million of the nearly $500 million that auditors determined was improperly paid to storm victims.

No one doubts that billions of dollars worth of assistance is needed to rebuild the Gulf region. Assuring that money goes to those who need it should be a top priority.