Foreign donations for Katrina remain unspent

As we approach the one-year anniversary of Hurricane Katrina that devastated the Gulf coast, it is discouraging to hear that millions of dollars in cash and supplies donated by foreign countries has remained unused. Countries from around the world donated generously for the relief of victims and the reconstruction of their communities. The State Department was unprepared to handle the generosity of the world community and remains unprepared to do so again. Carolyn O'Hara writes in Foreign Policy,

When shocking scenes of devastation unfolded on television screens last
August, the world was incredulous that the sole superpower could get its own
crisis so very wrong. Relief offers poured in from abroad. China chipped in $5
million. Tiny Brunei gave $1 million. Even countries with little to give dug
deep. Bangladesh sent $1 million, Rwanda wired $100,000, and Afghanistan coughed up $99,800. The United Arab Emirates was the biggest donor, doling out more than $99 million. By year’s end, the U.S. State Department had received $126 million from 36 countries and international organizations. (Other countries, such as Canada, India, Kuwait, and Turkey chose to donate directly to the American Red Cross or the Bush-Clinton Hurricane Katrina Fund.)

And it wasn’t just cash that poured in. Other countries sent
planeloads of tents, blankets, and Meals Ready to Eat, but the United States was
ill-prepared to handle the largesse while residents were still trying to
evacuate. Some offers were declined. But oftentimes the government accepted
supplies like bandages, food, and cots and then allowed them to sit for months
in Arkansas warehouses. According to a report by the Government Accountability
Office (GAO) released in April, FEMA and the State Department paid tens of
thousands of dollars in warehouse storage fees in the months after Katrina to
house unused supplies from foreign countries.

The donated cash met a different fate. By late October, the State
Department had allocated $66 million of the $126 million in international
assistance to FEMA, which then granted it to the United Methodist Committee on
Relief (UMCOR), the nonprofit aid arm of the United Methodist Church. With the
funds, UMCOR established Katrina Aid Today, a consortium of nine national aid
agencies dedicated to case-management work for Katrina evacuees. But to date,
only $13 million has actually been disbursed, and it has been allocated almost
exclusively to salaries and training for case workers, not to evacuees.

As for the rest of the funds, some $60 million languished for more
than six months in a non-interest-bearing account at the U.S. Treasury. Had the
money been placed in Treasury securities, the GAO report notes, their value
would have increased by nearly $1 million by the end of February. Instead,
inflation meant the funds actually decreased in value as the government stalled.
In mid-March, the Department of State finally agreed to sign over the remainder
to the Department of Education for teacher salaries, books, and new school
buildings along the Gulf Coast. But the Department of Education has yet to spend
a dime. In response to inquiries from Foreign Policy, a spokesperson said that
an announcement will be made this week regarding how the department intends to use the money.