NEW ORLEANS — A private contractor under investigation for the compensation it received to run a grant program for Katrina victims says that, in the rush to deliver aid to homeowners in need, some people got too much. Now it wants to hire a separate company to collect millions in grant overpayments.
The contractor, ICF International of Fairfax, Va., revealed the extent of the overpayments when it issued a March 11 request for bids from companies willing to handle "approximately 1,000 to 5,000 cases that will necessitate collection effort."
The bid invitation said: "The average amount to be collected is estimated to be approximately $35,000, but in some cases may be as high as $100,000 to $150,000."
The biggest grant amount allowed by the Road Home program is $150,000, so ICF believes it paid some recipients the maximum when they should not have received a penny. If ICF's highest estimate of 5,000 collection cases — overpaid by an average of $35,000 — proves to be true, that means applicants will have to pay back a total of $175-million.
One-third of qualified applicants for Road Home help had yet to receive any rebuilding check as of this past week. The program, which has come to symbolize the lurching Katrina recovery effort, has $11-billion in federal funds.
ICF spokeswoman Gentry Brann said in an e-mail Friday that the overpayment recovery effort was made inevitable when insurance and other aid to Katrina victims was eventually measured against what an applicant received from the Road Home program.
Brann said there was a sense of urgency in paying Road Home applicants, and ICF knew applicants might eventually have to return some money.
Brann pointed out that 5,000 collections cases would represent a 4 percent error rate for the Road Home that is "quite good for large federal programs."
Frank Silvestri, co-chairman of the Citizen's Road Home Action Team, a group that formed out of frustrations with ICF, sees it far differently. "They want people to pay for their incompetence and their mistake," he said.
The prospect of Road Home grant collections comes less than two weeks after the Louisiana inspector general and the legislative auditor said they were investigating why former Gov. Kathleen Blanco paid ICF an extra $156-million in her waning days in office to administer the program. With the increase, ICF stands to earn $912-million to run Road Home, a contract that also sweetened its initial public stock offering.