Chairman Enzi Concerned with Excessive Markups on FEMA Hurricane Relief Funds

WASHINGTON D.C. – (RealEstateRama) — Senator Mike Enzi (R-WY), Chairman of the Senate Budget Committee, sent a letter to Federal Emergency Management Administration (FEMA) Administrator Brock Long expressing his concerns about significantly marked-up prices FEMA contractors charged for repairs to homes damaged by Hurricane Maria. Recent news stories report that more than 60 percent of what a FEMA-supported program spends on repairs to homes damaged by Hurricane Maria is spent on overhead and markups, rather than actual repairs.

“I am troubled that federal disaster-relief money intended to help Puerto Rico residents recover from the devastating effects of Hurricane Maria has gone to pay excessive contractor markups and overhead costs,” wrote Chairman Enzi. “While I understand that sending materials to Puerto Rico on tight deadlines and with the island’s infrastructure challenges affects the cost of materials for repairs, I remain concerned that without proper oversight and controls, money intended to assist disaster survivors has and will be wasted.”

Chairman Enzi noted that FEMA has provided $3 billion in housing assistance after Hurricane Maria, and over $1 billion of that money has gone to the Tu Hogar Renace (Your Home Reborn) program run by the Puerto Rico Department of Housing to repair homes damaged by the hurricane. It has been reported that more than 60 percent of what the program spends was used to pay contractors’ overhead and markups, rather than actual home repairs. Reports show that FEMA paid $3,700 for generators that cost contractors $800, $666 for new bathroom sinks that cost contractors $260 to buy and install, and other overly marked-up prices for items such as doors and roofing materials.

Chairman Enzi is specifically asking FEMA about the source of funds provided to Tu Hogar Renace and how the agency conducts oversight of state-run disaster-relief programs that receive funds to ensure they are properly managed. Enzi also wants to know what the Puerto Rico Department of Housing’s guidelines are for awarding contracts and setting prices for equipment and services and how much overhead, profit, and markup FEMA allows in disaster-relief prices.

Read Chairman Enzi’s letter here.

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Source: Senate Budget Committe