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Study details missteps in handling of Katrina aid

WASHINGTON -- Federal auditors laid out a scenario yesterday of omissions, missteps, and bureaucratic nightmares that caused a loss of money and other donations sent from abroad to help victims of Hurricane Katrina.

Lawmakers at a congressional hearing on the subject reacted harshly to a Government Accountability Office report that attributed the errors, which involved as many as eight government agencies, to the United States' lack of experience as a recipient of huge amounts of aid from others.

Representative Henry A. Waxman of California, the House Government Reform Committee's top Democrat, said, ''This is bureaucracy at its worst, and the citizens of the Gulf Coast are suffering for it."

The GAO said in remarks prepared for delivery before the committee, ''Given that the US government had never before received such substantial amounts of international disaster assistance, ad hoc procedures were developed to manage the acceptance and distribution of the cash and in-kind assistance."

Representative Thomas M. Davis, Republican of Virginia, the chairman of the committee, said it ''appears that policies and procedures were lacking, simply because no one in the federal government anticipated needing or receiving this assistance."

The GAO said $126 million in cash came in from 36 countries after the Aug. 29 hurricane devastated the US Gulf Coast.

With no plans for dealing with such a large-scale influx, legal restrictions kicked in that required almost half the cash to be held in accounts that paid no interest, resulting in a loss of almost $1 million and diminished buying power for eventual hurricane relief.

Because $400 million more has been pledged but not yet received, the GAO is urging that instructions be put in place quickly to handle the money.

Davis said, ''It does no good to be offered money, or water, or food, or potentially lifesaving medical supplies if we don't get those donations into the hands of the people who need them."

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