In the wake of Hurricane Katrina's devastation, the U.S. government failed to take advantage of millions of dollars in foreign aid from its allies, The Washington Post reported Sunday.

The U.S. has collected about $126 million and used just $40 million of the $454 million in cash that was offered, the newspaper reported, citing U.S. officials and contractors.

Some offers were rescinded or redirected to organizations such as the Red Cross. Other offers were tied up in bureaucracy, the paper said.

More than 1,700 people died during the Aug. 29, 2005, hurricane and its aftermath, and many were left homeless. Nearly 20 months later, more than 100,000 households on the Gulf Coast still rely on the U.S. government for housing.

The Post said its report was based on cables, telegraphs and e-mails from U.S. diplomats that were compiled by a public interest group and given to the Post. Citizens for Responsibility and Ethics in Washington received the documents from the government via a Freedom of Information Act request.

Kuwait made the largest offer — $100 million in cash and $400 million in oil, the Post said. The Kuwaitis ended up instead donating $25 million each to the Red Cross and a private Katrina aid group because it seemed to be "the fastest way to get money to the people that needed it," the Kuwaiti ambassador to the United States, Salem Abdullah al-Jaber al-Sabah, told the Post. The oil donation was not collected.

Wasted aid included medical supplies from Italy that spoiled in the elements for weeks after Katrina caused massive flooding and other damage in Louisiana and Mississippi, the report said. "Tell them we blew it," one disgusted State Department official wrote, according to the Post.

Also, the Department of Homeland Security accepted, then later rejected, an offer from Greece to use two cruise ships as hospitals or to house displaced residents for free because the ships could not arrive soon enough, the Post said. The government paid $249 million to use Carnival Cruise Lines vessels.

Secretary of State Condoleezza Rice said that the United States was unused to fielding offers of foreign aid.

"It was a new circumstance, and I would be the last to say that everything was handled perfectly," she said Sunday on a television political program. "But we were very grateful for what countries have done, and to the degree that they delivered on their pledges, I think those pledges were well used."

The U.S. turned down at least 54 of 77 aid offers as of January 2006 from three close allies: Canada, Britain and Israel, according to a State Department document, the Post reported.

U.S. officials also turned down many offers of allied troops and search-and-rescue teams, the Post reported. The usual response was: "sent letter of thanks" and "will keep offer on hand," according to the documents.

The Federal Emergency Management Agency was roundly criticized as being poorly prepared and slow to respond to the disaster, and its director was fired. Audits and investigations that have uncovered waste, fraud and flawed procedures for granting contracts.