Company said to throw party with hurricane aid money

November 13, 1992|By Cox News Service

Federal funds to provide counseling for Hurricane Hugo victims financed a catered Christmas party, Caribbean beach outings, $80 pen sets, movie videos that included "The Godfather" and books with titles such as "Sexual Secrets," "Dirty Words" and "Cartoon Classics."

The expenses were disclosed in a government audit of the $6.6 (( million provided to the Caribbean Behavioral Institute, Inc., a private company incorporated in the U.S. Virgin Islands. The money came from the Federal Emergency Management Agency and from the U.S. Department of Health and Human Services.

The audit, released last week, said the government gave the Neighborhood Support Network, a trade name of the institute, the money to provide "crisis counseling and stress management" to victims of the 1989 Hurricane, which caused $6.9 billion in damage to the U.S. mainland.

The institute "substantially mismanaged $6.6 million of federally funded contracts . . . [and] failed to adequately account for costs," says the audit from the inspector general of the U.S. Department of Interior.

The Interior Department, which oversees U.S. territories, said the audit is among dozens outlining mismanaged federal money in territories.

In the past six years, the inspector general said, his office issued more than 150 audits showing "the territorial governments continue to experience deep-seated, unresolved problems."

"We see a lot of it in the territories. . . . They're existing off federal grants," Inspector General James R. Richards said yesterday. "Financial accountability is not their strong suit."

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