Audit says New Orleans group owes $1.8 million in Katrina aid

Because of a failure to follow contract procurement standards, the federal government should seek the return of most of the $1.8 million in rebuilding funds granted to a former inner-city private school that was flooded out of New Orleans by Hurricane Katrina and relocated briefly to Baton Rouge, an audit report released Thursday says.

The money was awarded by the Federal Emergency Management Agency to Desire Street Ministries, a nonprofit organization that operated the schools. Danny Wuerffel, the former college football star and New Orleans Saints quarterback who is executive director of the multistate organization, said Thursday that he disagrees with the report and is optimistic the issues it raises can be resolved quickly.

“It’s very frustrating,” he said. “I just hope the politics and red tape don’t hurt our ability to serve the people of the Upper 9th Ward” in New Orleans.

The report also faulted the Louisiana Governor’s Office of Homeland Security and Emergency Preparedness, the state agency that was the conduit for the money, for its performance in monitoring of the grant.

The organization opened its Christian school, Desire Street Academy, near the Desire Housing Project in New Orleans in 2002, providing very low-cost education to boys from the neighborhood in grades seven through 12. It grew to include nearly 200 students, but the building was inundated with eight feet of water by Katrina in 2005. It relocated as a boarding school to Camp Timpoochee, a camp owned by the University of Florida in Niceville, Florida.

The school moved after a year to 3852 East Brookstown Drive in Baton Rouge, but closed in 2009. That was the same year the nonprofit organization, at the prompting of the Governor’s Office, applied for the FEMA grant.

FEMA approved a total award of $10.1 million, but the organization has so far claimed only $1.8 million of that amount. FEMA recently approved the ministry’s request to change the purpose of the grant from rebuilding the school to building a community wellness center in New Orleans that would include a medical clinic, an early-childhood program and a general-purpose activity center.

The report, by the inspector general of the U.S. Dept. of Homeland Security, said the organization did not follow procurement procedures in awarding contracts totaling just under $1.3 million for project management and architectural and engineering services. It also recommended disallowing less than $3,800 in erroneous overpayments and about $1,600 in sales tax payments to Florida that were not required of the nonprofit.

Wuerffel joined Desire Street Ministries after retiring from football in 2002. His home in New Orleans also was destroyed by Katrina. The organization operates youth and after-school programs and a pediatric clinic in New Orleans, he said, and other programs aimed at revitalizing inner-city neighborhoods in half a dozen cities from Texas to Florida.

Wuerffel won the Heisman Trophy, college football’s highest award, as quarterback at Florida, and he led the team to the 1996 national championship.

Follow Gregory Roberts, of The Advocate Washington bureau, on Twitter, @GregRobertsDC.