Schumer, on Behalf of Erie County, Led the Fight to Reexamine the OIG Audit that Mistakenly Ruled Erie Owed $48.5 Million in FEMA Funds

In June, Schumer Hosted a Meeting with Erie County Executive Mark Poloncarz, and FEMA Administrator Craig Fugate to Argue Erie County’s Case, Push for Revised Audit

Schumer: Audit Reversal a Huge Win for Erie County – Will Prevent Tax Hikes and Service Cuts that Would Have Been Required to Pay Back the $48.5 million

United States Senator Charles E. Schumer today announced that, after his full court press, the Federal Emergency Management Agency (FEMA) has revised their audit of costs from the cleanup of an October 2006 storm in Erie County, and of the $48.5 million they initially sought to recoup, FEMA is now only requesting the county pay back $705,604.93, or 1.45% of the initial request.  The $48.5 million reimbursement request was based on an audit of Erie Country's response to the storm from the Department of Homeland Security’s Office of the Inspector General (OIG). The revised audit found Erie County’s bid process after the 2006 storm complied with federal standards and will mean that Erie County will not be forced to pay back $48.5 million in Federal disaster aid; a total which Schumer explained could have seriously threatened the county’s fiscal health. Schumer’s efforts to get FEMA to reverse course will prevent tax hikes or service cuts that could have been required if Erie County had been forced to pay back the full $48.5 million.




“Today's decision is a huge win for Erie Country officials and residents who will not have to pay back the great majority of $48.5 million dollars in federal disaster aid, a repayment which could have broken the bank and led to higher taxes and fees," said Schumer. "After the storm, Erie County officials turned to FEMA officials for guidance in the debris removal and cleanup process. FEMA approved the use of local contractors for this work, and then the agency unfairly reversed course to the tune of $48.5 million. Erie County officials worked in good faith with FEMA to respond to the crisis, and today’s announcement vindicates their actions. I am pleased that FEMA Administrator Fugate and the Office of the Inspector General reached a more acceptable solution that will not unjustly slam Erie County taxpayers, and seriously threaten the county’s finances.  Now the county can move forward without this weight on their backs, knowing the correct decision was finally reached.”




An 2006 October snowstorm caused widespread damage and left 80% of the city and 400,000 people countywide without power; Erie County had originally received $55.4 million from FEMA to cover the public cost of recover, primarily for debris removal. But then, after an audit by the Dept. of Homeland Security’s Office of the Inspector General (OIG), FEMA sought to recoup $48.5 million of the given aid seven years after it was approved, because the audit claimed the county did not follow the proper procedures in securing local contractors, among other concerns. In March of this year, in a personal call with FEMA Administrator Fugate, Schumer highlighted that Erie County officials worked closely with FEMA officials to develop a debris removal and cleanup plan. At that time, Schumer noted, FEMA officials were informed of the county’s preference to use local contractors for the work, which was determined an acceptable practice and ultimately approved its project worksheets that paid these local contractors.  Schumer requested a face-to-face meeting with Administrator Fugate and representatives of Erie County in order to present Erie County’s arguments.  In addition, on two separate occasions in the review process, Schumer requested and received an extension to the ruling deadline so that FEMA could more carefully consider Schumer’s and Erie County’s points of argument.




On June 26th, in his Washington D.C. office, Senator Charles E. Schumer hosted a meeting between Federal Emergency Management Agency (FEMA) Administrator Fugate and Erie County Executive Poloncarz in order to address the off-base decision that Erie County owed FEMA $48.5 million in federal disaster aid. Schumer had stated that these findings were unjust, listing the reasons why, and that a new conclusion must be drawn.  Afterwards, FEMA appointed an independent counsel to review the audit in light of Erie County’s explanation, and today found the county complied with almost all of the necessary guidelines and that FEMA would only be seeking $705,000 of the $48.5 million they initially requested. FEMA rejected the OIG’s chief claim that Erie County did not have as competitive a bid process as federal standards require.  FEMA’s report notes that Erie County’s procurement process “reflected a full and open competition, which resulted in a fair and reasonable cost of debris removal at the time of the award.” Schumer explained that $48.5 million represents almost two-thirds of Erie County’s fund balance, and could have significantly impacted their ability to borrow at low interest rates – as well as required a tax hike or service cut – had they been forced to return all the funds.




Schumer applauded the efforts of County Exec. Poloncarz, and thanked Administrator Fugate for his willingness to hear the county’s arguments and revisit the facts of the case, which supported the procedural correctness of Erie County’s actions in the wake of the 2006 snowstorm.