The Imperial Irrigation District (District) received a $10.5 million award of Federal Emergency Management Agency (FEMA) Public Assistance grant funds for damages resulting from an April 2010 earthquake. We audited $7.8 million, or 74 percent of the total award. The District did not always account for and expend FEMA grant funds according to Federal requirements. The District awarded contracts totaling $3.6 million without taking the required affirmative steps to ensure the use of small and minority firms, women’s business enterprises, and labor surplus area firms when possible. As a result, FEMA has no assurance that these types of firms had opportunities to bid on Federal work as Congress intended. The District’s claim also included $45,408 of ineligible contract costs and $1,473 of unsupported equipment costs. In addition, FEMA should deobligate $2.5 million and put those funds to better use because the District completed disaster work and no longer needs those funds.