Where is the money? That seems to be the most-asked question around New Orleans.

Nearly everyone here has heard the federal government allocated around $12 billion to Louisiana. Major charities donated about $2.5 billion. Even foreign countries sent about $1 billion, including $126 million in cash earmarked for Katrina victims.

So where is it? We went to find out, and were told much of it is still in the hands of the federal government.

I met Louisiana Gov. Kathleen Blanco at the governor's mansion to talk about the money trail. She says the state has received and paid out about $2 billion dollars of the $12 billion or so that's been promised by the federal government.

But New Orleans Mayor Ray Nagin says that's not enough. He says the city is broke and wonders why it's only received about $100 million of the nearly $1 billion it has been promised.

Here's one thing that's holding up the money: The federal government's reconstruction fund works as a reimbursement program. The city needs to spend money to get money back. Problem is, the city says it doesn't have the money to spend on the construction projects, so it can't get reimbursed for work it can't get started.

Gov. Blanco says she recently put aside about $500 million to help the city make down payments and get projects started, but will construction companies be willing to do work for a city that's broke and has to get reimbursed to pay them? People here aren't so sure.

In the meantime, many people here will continue to live without a working sewer system, without power in many areas, and without much hope of a speedy recovery fed by a vast infusion of funds.