Study Says Government Fumbled Katrina-Related Foreign Aid

WASHINGTON – Federal auditors laid out a scenario of omissions, missteps and bureaucratic nightmares that caused the loss of money and other donations sent from abroad to help victims of Hurricane Katrina.

The Government Accountability Office attributed the errors, which involved as many as eight government agencies, to the United States' lack of experience as a recipient of huge amounts of aid from others.

"Given that the U.S. government had never before received such substantial amounts of international disaster assistance, ad hoc procedures were developed to manage the acceptance and distribution of the cash and in-kind assistance," the GAO said in remarks prepared for delivery to a House committee Thursday.

"It is understandable that not all procedures would be in place at the outset."

The agency said $126 million in cash came in from 36 countries after the Aug. 29 hurricane devastated New Orleans and much of the Mississippi Gulf Coast.

Without a plan for dealing with such a large-scale influx, legal restrictions kicked in that required almost half the cash to be held in accounts that paid no interest, resulting in a loss of almost $1 million and diminished buying power for eventual hurricane relief.

Because $400 million more has been pledged but not yet received, the GAO is urging that instructions be put in place quickly to handle the money.

"We want to find out if our government, in effect, looked this generous gift horse of foreign aid in the mouth," Rep. Tom Davis, R-Va., said of the hearing before his House Government Reform Committee. "It does no good to be offered money, or water, or food, or potentially lifesaving medical supplies if we don't get those donations into the hands of the people who need them."

Money was not the only shortcoming of the response to one of the nation's most expensive and deadly natural disasters, which killed almost 1,100 in Louisiana alone and hundreds more elsewhere.

Typical of the misadventures was the failure to enlist government quality-control experts from the Agriculture Department and the Food and Drug Administration.

This resulted in importation of medical items and military food packages that should not have been allowed into the country; because they were, the government had to pay for storing them. One shipment of banned military meals-ready-to-eat was delivered directly to a U.S. base, whose personnel distributed them to hurricane victims.

The report, which will be published later, is the latest of a series of papers that have documented widespread mistakes and incompetence at all levels of government after the storm broke or overran some of the levees on which New Orleans depended for its survival. Wide areas of the city remain unrepaired.