Mississippi is withholding nearly $17 million in federal reimbursement money from its most populous coastal county while authorities probe a "multitude of discrepancies" in bills that contractors submitted for Hurricane Katrina debris removal, according to officials and documents reviewed by The Associated Press.
The state stopped making payments last month to Harrison County — which contains Biloxi and Gulfport — after the Federal Emergency Management Agency began auditing the work being done to clear away storm-damaged trees.
An internal FEMA report, reviewed by The Associated Press, faulted county officials for paying the contractors more than $10 million without checking the work's quality or accuracy.
When FEMA officials inspected more than a dozen of the roads where contractors performed the work, they determined that the majority of the trees they cut weren't eligible for reimbursement, FEMA records show. Many were too small or else inspectors couldn't find stumps to match them.
FEMA debris specialists notified the county on three occasions that the contractors were "not performing their jobs properly resulting in ineligible limbs and trees being cut and billed." The Feb. 18 report said the county "took inadequate steps to correct the problem."
FEMA's report also said the agency found a "multitude of discrepancies" and a "high number of variances" in the project's invoices and other paperwork, including duplicate entries.
The state hasn't reimbursed Harrison County since April 25. Harrison County is eligible to receive up to $54.5 million in federal funding for all Katrina projects, including debris removal. The state is holding up about $16.8 million of that money, most of which is for debris removal, according to the Mississippi Emergency Management Agency.
FEMA spokeswoman Mary Hudak called the audit a routine step for a project of such scope and complexity.
The spokeswoman for the state emergency agency, Lea Stokes, said it's not uncommon for the state to stop payments to local officials so that projects can be reviewed. In one recent case, she said, the state temporarily withheld payments to Jones County, north of Harrison County, because two FEMA officials gave different estimates for the cost of a tree removal project.
The state agency's deputy director, Mike Womack, said the state — which serves as an intermediary between the county and FEMA — halted the payments so the state and federal agencies could review the county's debris removal project.
"There have been no decisions made as to what the exact eligible costs for reimbursement are," he said. "Until the entire process is complete, we won't have a final dollar amount."
Crews in Mississippi have cleared more than 41 million cubic yards of Katrina debris — enough to fill 41 football fields to a height of about 200 yards. An additional 1.7 million cubic yards is yet to be removed.
About 97 percent of the debris has been removed from Harrison County, amounting to 10.8 million cubic yards of trees, sand, cars, building remnants and other materials.
Joe Spraggins, the county's emergency management director, accused FEMA of drawing conclusions based on the "worst-case scenario" before contractors had time to complete the project.
He expressed confidence that the county eventually will be fully reimbursed.
The county hired TCB Construction, based in nearby Pearl River County, to handle removal of trees, and signed a contract with another company, Beck Disaster Recovery, to monitor the project.
TCB Construction project manager Dickie Joe Ladner contended FEMA "got their paperwork and their numbers wrong."
"When the smoke clears, they're going to be embarrassed," he said.
Beck Disaster Recovery project manager Jon Hoyle said FEMA misinterpreted records that the contractor kept for the tree-removal project. "I'm confident that we will work through the problems and get the issues resolved," he said.
Womack, the state official, said debris removal operations are difficult to document, noting that such projects are "being executed by construction workers trying to get as much debris removed as quickly as possible."
"There are certainly areas where people could end up overbilling," he said. "There are also areas where people are honestly trying to do the best they could."
FEMA's report also criticizes the county for using a noncompetitive bid process to award the contracts for tree removal. Instead of soliciting bids publicly or advertising the job, the report said, a county employee contacted six companies by telephone and two of them submitted bids.
In contrast, city officials in Gulfport and Biloxi did use a competitive bid process. Gulfport received four bids and Biloxi got 14, the FEMA report said.