The Federal Emergency Management Agency ("FEMA") did not properly review the Port of Authority of New York and New Jersey's request for public assistance funds for damages the Holland Tunnel sustained from Superstorm Sandy, according to a new report by the Office of Inspector General ("OIG") of the U.S. Department of Homeland Security.

According to the OIG, FEMA did not follow federal regulations or its own guidelines for reviewing cost estimates and documenting its determinations. Moreover, the OIG found, FEMA Region II personnel could not provide documentation to justify changes made to the cost estimates or prove they reviewed the cost estimates adequately, resulting in a lack of assurance the costs obligated were accurate and reasonable.

The OIG said that this occurred because FEMA Region II personnel conveyed the accuracy of estimates was not important because actual costs were determined at project completion, even though this project could take many years to complete. Additionally, according to the OIG, FEMA Region II Recovery branch management did not ensure personnel adhered to policies and procedures required when reviewing costs.