Auditor Says USM Misused Katrina Funds

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A federal auditor says FEMA should demand the return of $5.3 million of Hurricane Katrina reconstruction money from the University of Southern Mississippi.

The Department of Homeland Security's Inspector General says it reviewed $12.2 million of the $41.1 million that USM received to rebuild its Gulf Park campus in Long Beach following the 2005 hurricane.

FEMA officials must decide whether to demand the money's return or discard the finding.

Frances Lucas, USM's vice president for Gulf Park, says the university agrees that it should relinquish claim to $1.44 million it never spent. But she says $3.85 million was mostly spent properly.

She says that some spending immediately following the storm didn't follow federal guidelines on bids. But Lucas says it was impossible to take proper bids right after the storm.