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Huge math error in Katrina supply giveaway

  • Story Highlights
  • Feds miscounted: $18.5 million -- not $85 million -- in supplies were given away
  • Goods were supposed to go to people affected by hurricanes Rita, Katrina
  • After CNN story, some of the surplus property was returned to Louisiana
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From Abbie Boudreau and Scott Zamost
CNN Special Investigations Unit
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(CNN) -- Federal officials vastly overestimated the value of hurricane relief supplies given away earlier this year, the Federal Emergency Management Agency reported Monday.

These items, stored by FEMA, were meant for Katrina victims but were given to state and federal agencies.

Debra Reed lived in a tent after Katrina and says she needed the supplies given away by FEMA.

The General Services Administration, which manages federal property, over-counted cases of toilet paper, plastic sporks and other cutlery, by mistakenly counting a single item as being worth as much as multiple items contained in a package of goods.

The original GSA estimate of $85 million should have been $18.5 million, according to figures released by GSA and FEMA.

The household goods were supposed to go to people whose homes were destroyed by hurricanes Katrina and Rita in 2005. But the items were stored in warehouses in Louisiana, and then Fort Worth, Texas. A recent CNN investigative story exposed that those materials never made it to storm victims.

GSA officials were asked recently to reassess the total cost of donated items in what the agency called a routine audit.

"In doing so, it was determined that some of the unit costs were 'eaches' and others were 'for-case' lots. The final adjustments reveal there was a significant overstatement in the total asset valuation," GSA officials reported to FEMA, which released the findings Monday.

For example, each spork was assigned the value of an entire case, inflating the original estimated value of the supplies a thousandfold to $36 million from $36,000. Packs of toilet paper originally estimated to be worth $1.5 million dropped to about $18,000, and plastic cutlery kits, from $6.3 million to about $25,000.

"The actual total value of the surplus property was determined to be approximately $18.5 [million], and this figure was validated by both FEMA and the GSA Office of Personal Property Management," FEMA told CNN in an e-mail.

GSA spokeswoman Viki Reath said Monday she would investigate whether it is unusual for the agency to make such a large accounting mistake.

The agency told CNN in February that the value of the FEMA items was about $85 million.

FEMA's decision to give the items to states and federal agencies as surplus rankled aid workers and officials in Mississippi and Louisiana. Relief workers in those states are still working to resettle many of people displaced by Katrina.

Members of the House and Senate homeland security committees are scheduled to hold a joint hearing into the give-away Thursday in Washington.

"To hurricane survivors in need, $18.5 million is a huge amount of money," said U.S. Sen. Mary Landrieu, D-Louisiana. "FEMA's mistake in tallying the cost of the household goods it deemed surplus does not change the situation."

A CNN investigation revealed in June that FEMA gave away 121 truckloads of material from the Fort Worth facility. The agency said it was paying about $1 million a year to store the supplies, which were purchased as starter "living kits" for hurricane victims.

Officials in Louisiana originally declined the supplies when FEMA gave them away; the state's surplus property agency told CNN it was unaware of the need. Mississippi distributed items it received to prisons, fire departments, colleges and even the agency that regulates the state's casino industry.

In the wake of the CNN investigation, Landrieu was able to get several truckloads of the surplus property returned to Louisiana, where nonprofit groups will distribute it to Katrina victims.

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