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FEMA Should Recover $3.8 Million of Public Assistance Grant Funds Awarded to Kenergy Corporation, Henderson, Kentucky

Executive Summary

Our audit objective was to determine whether Kenergy accounted for and expended Federal Emergency Management Agency (FEMA) grant funds according to Federal regulations and FEMA guidelines. Kenergy received a Public Assistance award totaling $31.2 million from the Kentucky Division of Emergency Management (State), a FEMA grantee, for damages resulting from a severe winter storm, which occurred in January 2009. The award provided 75 percent FEMA funding for debris removal activities, emergency protective measures, and permanent repairs to the electrical distribution system. The award consisted of three large projects and one small project.

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