Federal audit recommends Texas pay back millions in overcharges billed by HNTB

A federal audit has found that Texas improperly contracted with the engineering firm HNTB to manage hundreds of millions of dollars worth of hurricane recovery grants, and it recommends the state be required to pay back $9 million in overcharges billed by the firm and paid in federal dollars.

The report by the regional inspector general for the U.S. Department of Housing and Urban Development said the Texas Department of Rural Affairs also acted improperly last year when it more than doubled the size of HNTB's contract from $69 million to $144 million and expanded the scope of its work. Auditors said the state did not adequately monitor the firm and billings that contained "inflated" and "unreasonable" labor costs.

In a series of exclusive articles beginning last fall, the American-Statesman reported that the state had outsourced the public works portion of hurricane recovery to HNTB and focused attention on the high administrative costs of the outsourcing and the lack of oversight of the HNTB contract by the state.

The results of the audit are no surprise to Gary Hagood, deputy commissioner of financial management at the state's General Land Office, which inherited the troubled program from the now-defunct Department of Rural Affairs. HUD has been closely monitoring Texas for more than a year and has expressed concern about the rapid depletion of federal money needed to administer the disaster grants to communities stricken by hurricanes Ike and Dolly, and the slow pace of construction.

http://www.statesman.com/news/statesman-investigates/federal-audit-recommends-texas-pay-back-millions-in-2231811.html

[font color=green]There are also several links in the left sidebar that accompany this article. Of particular interest is the link to "State outsourced allocation of federal disaster recovery funds to firm with ties to Perry" at http://www.statesman.com/news/texas-politics/state-outsourced-allocation-of-federal-disaster-recovery-funds-1893739.html[/font]