SABINE PASS, Texas (CNN) -- Christmas will be anything but merry this year for Helena Saunders.
Helena Saunders waits for hurricane relief to rebuild her Sabine Pass, Texas, home destroyed by Hurricane Rita.
The 69-year-old grandmother, who's been living inside a cramped FEMA trailer since her home in Sabine Pass, Texas, was devastated more than two years ago by Hurricane Rita, says there isn't enough room for a Christmas tree.
Hurricane Rita slammed into the Texas and Louisiana coast on September 24, 2005, destroying thousands of properties and causing an estimated $9.4 billion in damages -- making it the ninth-costliest storm in U.S. history, according to the Federal Emergency Management Agency.
Saunders, like thousands of other Texans, can't afford to rebuild. They're still waiting on the state to distribute millions of dollars received from the federal government to help homeowners.
According to a state audit, Texas received nearly $500 million in federal funds targeted at housing and infrastructure repair. However, CNN has confirmed that only a fraction of the relief -- $1.1 million -- has been spent on rebuilding homes. That is less than a quarter of a percent.
Saunders believes the state should be doing more to help families.
"I think within two years, something should've been there for us in this little community," Saunders said.
But Texas officials said the state is not to blame.
Officials with the Texas Department of Housing and Community Affairs told CNN the federal government didn't send the bulk of the money to Texas until April of this year.
However, the state received $43 million in May 2006 and has only spent $1.1 million of that money. According to the audit, the largest portion of those funds was spent on administration.
The same audit shows 13 of the 4,300 applicants received homes as of September 2007.
Michael Gerber, executive director of the TDHCA, blamed part of the delay on multiple federal requirements to distribute funds, such as environmental testing and historical preservation clearances.
"There are just sets of rules you have to work through. It's very intensive casework," said Gerber.
Despite the federal hurdles, Gerber said the state has picked up the pace of distribution and has built or bid out as many as 120 homes. However, he said the state has also moved slowly to prevent fraud.
There are also additional problems. Gerber's agency asked local councils to determine eligibility, but the audit found the councils didn't do the job correctly and the state failed to catch their errors. In fact, the audit discovered that some families who were eligible to receive aid were deemed ineligible.
Some of the backlog, according to the audit, is attributed to a personnel shortage and the state's use of part-time employees to manage the process. When asked why part-time employees were handling such a massive caseload, Gerber told CNN, "There are lots of full-time employees that are involved in this."
However, Gerber conceded that many of those full-time employees were handling cases in addition to performing their regular job duties.
At least $12 million in relief has been set aside for Sabine Pass, according to Gerber. He said the state already has the money but hasn't spent any of it.
The news is little consolation for Saunders, who submitted her application for state aid in December 2006. Her son, Adam, said all the family can do now is wait.
"[It's] been over a year since the applications have been done," said Adam Saunders. Even though he lives in one of 13 homes in Sabine Pass that escaped the storm's wrath, he said it's depressing to drive around and still see the devastation nearly 2˝ years after the storm.
"It's really sad. It's a place that's home and you love. And it's still suffering and hasn't come back yet -- [it's] really difficult," said Adam Saunders.
Some residents who lost their homes said they won't find out if they qualify for aid money until spring 2008.
Helena Saunders said she doesn't believe the funding will ever come.
"I feel like I won't get it," she said, "That's a bad feeling." E-mail to a friend