December 28, 2005 DHH Clarifies Refunding FEMA-Funding

Baton Rouge, Louisiana, Dec 28, 2005 -

Baton Rouge – Recent news accounts have reported the Department of Health has been overpaid by FEMA by nearly $340 million, and that LDH has returned that overpayment.

Due to concerns expressed by some health care interests, LDH assures citizens that the agency remains eligible for future reimbursements from the federal government, and will actively pursue these funds at a later date.

Dr. Fred Cerise, LDH Secretary, explains the federal Cash Management Act only allows state agencies such as LDH to get federal reimbursement for actual expenditures, not for anticipated needs.

“In addition, the law says we must pay interest on any and all unexpended amounts,” Cerise said. “Thus, the prudent way to proceed was to only ask for what we spent, but remain eligible for more federal aid when we could justify those expenditures.

Charles Castille, LDH Undersecretary, says DHH’s handling of this overpayment was done with the knowledge and approval of the Louisiana Division of Administrations’ budget office, as well as with the legislative Auditor and the Office of the Inspector General.

Initially, LDH received $352 million from FEMA, but spent only $9.6 million on its special needs shelters that were opened throughout the state, overtime pay and medical supplies. Castille says the agency estimates it will eventually spend in excess of $60 million.

“This is a rough estimate, but as soon as these funds are spent, as well as expenses incurred during Hurricane Rita, we will immediately seek FEMA reimbursement,” Castille said.

He added that LDH never actually received a check from FEMA; that the funds went directly to the Office of Homeland Security and Emergency Preparedness.

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