Audit: Seaside Heights owes FEMA millions

SEASIDE HEIGHTS – Seaside Heights, whose boardwalk wreckage was one of the lasting images of superstorm Sandy, owes the federal government $2.75 million for excess or misspent disaster aid, according to an audit from the U.S. Department of Homeland Security.

Just over $2 million of the total owed to the Federal Emergency Management Agency is money that remained after projects in the borough came back under estimated costs, most notably the boardwalk that was devastated when the superstorm made landfall in October 2012. The remainder of the bill is referred to as "questionable" costs, such as towing cars out of private driveways and failing to properly document certain expenses.

The results were contained in a 17-page audit report circulated late Thursday afternoon by the DHS's Office of the Inspector General. FEMA is part of the Homeland Security Department.

In the immediate aftermath of Sandy, FEMA provided a total of $16.9 million to Seaside Heights, whose finances were so deflated by the storm and the resulting tourism slump that the town has repeatedly sought millions in aid to balance its annual budgets.

The New Jersey Office of Emergency Management deserves some of the blame, according to the report, because it did not "proactively monitor" how Seaside was spending the aid money.

Leland Moore, a spokesman for the OEM, told the Asbury Park Press that the fate of the $712,657 in questionable costs has not been decided and that the state, the town and FEMA are working together to determine what, if anything, should be returned.

Messages to borough administrator Chris Vaz were not returned, but the audit indicates that the town is disputing some of the findings.

The audit says:

•FEMA provided $8.1 million to restore the boardwalk but $1.6 million was remaining when the work was completed in February 2014. The borough also finished FEMA-sponsored repairs to its electrical infrastructure for $392,000 less than what had been transferred.

•About $340,000 in labor costs, most of it for police personnel, could not be supported in enough detail by documentation.

•In the weeks after Sandy, the borough used $250,000 in FEMA aid to tow cars out of the borough. This included towing from private driveways, which is not an authorized use of the money. The town could not differentiate between what was spent on towing from private driveways and what was spent on removing disabled, potentially fuel-leaking cars from public spaces.

•About $80,000 was used for fuel costs, but it was unclear if the town double-billed FEMA for gas.

•The borough claimed $46,000 was used to cover the cost of vehicle repairs. However, their insurance settlement compensated them for that expense, which the borough acknowledged when DHS auditors pointed it out.

•Seaside did not follow all federal rules on contracting, including not executing a written contract with their prime contractor. The agreement was oral.

Audits of other Jersey Shore towns, including Belmar, Beach Haven and Little Egg Harbor, have resulted in disputed findings of insufficient paperwork.

Russ Zimmer: 732-557-5748, razimmer@app.com